PHOENIX — Republicans in Arizona’s House proposed a bill Monday to solve a budget-busting $122-million shortfall in the state’s disability-services program.
The Division of Developmental Disabilities runs out of money at the end of the month, two months before Arizona’s budget ends, endangering services for more than 59,000 Arizonans with disabilities.
House Bill 2945 would fully cover the $122 million budget hole, put limits on one of DDD’s programs, and strengthen legislative oversight over how the state spends federal dollars.
“What we’re doing today is stepping up with a responsible, fully funded solution that protects families, restores order, and keeps this from happening again,” House Speaker Steven Montenegro said in a statement Monday.
What's in the bill
Sponsored by a House lawmaker who leads budget talks, HB 2945 would shift money from other parts of Gov. Katie Hobbs’ budget to fully fund DDD through June 30, the end of the state’s budget year:
- $10 million from the Arizona Commerce Authority Competes Fund
- $38 million from the Housing Trust Fund
- $74 million from the Prescription Drug Rebate Fund
In addition to the funding, State Rep. David Livington’s bill would put a 40-hour weekly cap on DDD’s Parents as Paid Caregivers Program when the new budget year begins on July 1. That cap would be cut in half to 20 hours per week on Oct. 1, the start of the federal government’s new budget year. The Legislature also would need to reauthorize the parental caregivers program in 2027.
HB 2945 would also direct state agencies to tell lawmakers how they plan to use federal funds and develop contingency plans for what happens if that money ends, as well as require legislative approval before the state can submit a waiver request to Medicaid.
Families caught in the middle
Caregivers and families of Arizonans with disabilities have been pushing for a solution to the budget woes for more than two months. Advocates such as Brandi Coon, the founder of the Raising Voices Coalition, say the uncertainty is adding stress to families and jeopardizing Arizona’s fragile provider system.
“We need to ensure that we are taking care of our disabled individuals and our children with disabilities in their homes, where they belong,” she told ABC15 last week.
Coon has pressed lawmakers to pass a “clean supplemental” – a bill that covers the budget hole without other measures – and then work with families and Arizonans with disabilities on DDD reforms.
“In order to make policy and law that correctly reflects the need and balances the budget, we have to be part of that conversation,” she said.
But Livingston and other Republican lawmakers, while vowing to address the shortfall before DDD runs out of money, made it clear they won’t pass legislation without reforms.
Democrats have proposed legislation to allocate money from the state’s general fund to DDD, but the bill never got a hearing, and Republicans blocked an effort last month to advance the measure.
Hobbs has said her request for supplemental funding to cover the shortfall is a routine part of the budgeting process, pointing to other requests that lawmakers approved during former Republican Gov. Doug Ducey’s administration.
DDD's Parents as Paid Caregivers Program under scrutiny
Republican lawmakers have blamed Hobbs for the funding gap, saying she funded DDD’s Parents as Paid Caregivers Program even though money for it was not in the budget passed last year.
GOP lawmakers on a special panel formed to investigate "executive budget mismanagement" scrutinized the program at a hearing last week on DDD's shortfall. Hobbs instructed her agency directors not to participate, and the Democrats named to the panel also boycotted the proceedings.
Hobbs, who used federal money to pay for the parents program, has said the program’s rising costs are due to caseload growth and were not unapproved spending.
Parents like Coon tell ABC15 the program keeps families out of poverty – and helps keep people with disabilities in their homes instead of institutions.
“This program is here for a reason, and it's working, and our children are having better health outcomes,” she said. “They're making progress. ... Some of them are going to be able to work when they're adults, and that is going to better our society. But they need the support when they're children, when they're young, when they're transitioning to adulthood, in order to become who they're capable of being.”
DDD, a part of the Arizona Department of Economic Security, has also seen increased enrollment, more families using the services they are approved for, and shifts in funding to the state as federal money ends.
The agency told ABC15 last week it will not be able to pay claims in May or June if a funding fix is not passed.
HB 2945 is expected to be heard in the Arizona House next week.
