PHOENIX — State lawmakers approved a budget Band-Aid on Thursday for Arizona's child welfare agency, a funding shortfall that Republicans have used to raise questions about Gov. Katie Hobbs’ administration.
Department of Child Safety money to house children in group homes was set to run out Monday. The Joint Legislative Budget Committee voted to allow DCS to cover the shortfall through the end of the fiscal year with surpluses in other parts of the agency's budget.
"We did more than what the governor originally asked for to solve the problem, for a longer period of time, and that's a good olive branch,” State Rep. David Livingston said. “Hopefully we carry over to when we do the budget and try to do all that, too.”
The agency asked for approval to shift around money in its budget to cover the shortfall for one month in a letter dated March 5, just 19 days before the money ran out.
Livingston, a Republican representing Legislative District 28 who chairs the panel that reviewed DCS’ request, said it was frustrating to be asked to fix mistakes lawmakers didn’t cause.
“I truly believe in my heart that the governor's executive staff made tremendous mistakes, and they should have come to us sooner, and they should have had private meetings with us so we didn’t publicly have to do this,” he told ABC15 after the vote.
The agency had warned legislators in their March 5 letter that kids in state care would have to sleep in welcome centers or DCS offices if money for group homes ran out. Approximately 1,500 children are in group homes.
“This was a manufactured crisis that didn’t have to happen, that kids didn’t have to be threatened with sleeping in DCS offices,” said Rep. Matt Gress, R-Legislative District 4.
Routine budget matter vs. financial mismanagement
During Thursday’s JLBC hearing, lawmakers wrangled for more than an hour over why the group-home program’s budget hole wasn’t dealt with sooner. Gress, who was budget director for former Gov. Doug Ducey, said the extra funding had been needed for years and should have been in the budget to begin with. And Livingston said Hobbs could have used federal American Rescue Plan Act money in December to pay for foster kids' group homes.
State Sen. Brian Fernandez, a senator from Legislative District 23 who sits on the JLBC, told ABC15 after the meeting that a lot of it was theatrics.
“It was the majority party trying to blame others,” he said. “But really, this was just, I think, mostly normal set of business.”
Both Democrats and Hobbs’ office have characterized the DCS request as common, noting that the agency has had similar transfers every year since 2016.
“Republicans are manufacturing outrage over a 100% normal and routine procedure that happens countless times under both Republican and Democratic governors,” House Minority Leader Oscar De Los Santos said a in statement.
House Republicans have said the DCS shortfall is an example of financial mismanagement, with the House speaker announcing a panel to investigate this and other budget issues.
No fix in sight for budget hole threatening state's disability services
De Los Santos, a Democrat representing Legislative District 11, said Republicans are using the group-home shortfall as a distraction from the lack of progress in solving a much bigger budget hole in the state’s Division of Developmental Disabilities.
“They should be making life better for disabled kids instead of playing political games,” he said.
DDD is expected to run out of money next month, two months before the end of the state’s fiscal year. Republican lawmakers blocked a bill Tuesday to fund the program’s $122 million deficit.
That budget hole is seven times the size of what lawmakers fixed Thursday for DCS.
“That’s a $100 million-plus problem,” Livingston told ABC15. “With today, we fixed the $17 million. Seventeen is a lot easier to fix than 100 plus million.”
Livingston has told ABC15 a funding plan for DDD must include reforms. Otherwise, money to cover the shortfall will be included in the state’s main budget, he said.
But it's unclear if such a budget deal will be reached before DDD runs out of money.
