By Matthew Holloway |

This week, Governor Katie Hobbs issued a directive to all of her agency directors not to appear or testify at the inaugural hearing of the Arizona House Ad Hoc Committee on Executive Budget Mismanagement. Hobbs issued the directive 15 minutes prior to the start of the meeting. Democrats on the committee also refused to attend.

According to Committee Chairman Matt Gress (R-LD4), agency leaders from AHCCCS and the Department of Economic Security (DES), who share responsibility for the $122 million shortfall in Arizona’s Developmental Disabilities (DD) program, were scheduled to appear before the committee and answer for the program’s massive cost overruns that have threatened to disrupt critical services for Arizona families.

Gress said in a statement, “The Governor pulled her directors because she can’t defend the damage she’s done. If she had a plan, she would have sent her team to explain it. Instead, she’s hiding behind a press release while Arizona families face the consequences of her financial mismanagement. This Legislature asked for answers. The Governor responded with a tantrum. What she calls a ‘political stunt’ is actually legislative oversight—a constitutional duty that we will carry out whether she likes it or not.”

In the press release referred to by Gress, Hobbs and Democratic House Assistant Leader Nancy Gutierrez claimed the “Ad Hoc committee is a waste of time and a shameless political stunt,” and derided it as a “sham,” demanding instead that the legislature issue a supplemental budget bill to cover the shortfall.

Despite the conspicuous absence of Democrat members of the committee, the hearing went forward with the Republican members reviewing budgetary data, testimony from the Joint Legislative Budget committee, and expert testimony from former Idaho House Majority Leader Megan Blanksma, whose state suffered what Gress’ office called “a near-identical funding crisis.”

The committee issued its formally adopted findings, naming the Hobbs administration accountable for:

• • “Without approval from the Legislature or specific appropriation authority, dramatically expanded its Developmental Disability program by making permanent a temporary, COVID-era program to pay parents to provide attendant and habilitative care to their minor children.”

  • “The programmatic and scope changes of the DD program adopted by AHCCCS and implemented by DES led to dramatic unfunded liabilities, threatening the entire DD program and leaving the state with at least a $122 million budget deficit in FY2025.”

  • “Through its Medicaid agency at AHCCCS, put the Department of Economic Security under legal threat with a November 2023 Corrective Action Plan, which aimed to grant parents 2 additional hours for care under the PPCG program, which was at odds with the ’extraordinary care’ standards and dramatically expanded costs to the state.”

  • “AHCCCS delayed implementation of guardrails on the PPCG program by over 18 months, despite its original plan submitted to the Federal CMS in August 2023, causing considerable cost overruns and unrealistic expectations for families.”

The committee further found that “The critical nature of the Developmental Disabilities program and its pending exhaustion of funds requires that the Executive identify available federal funds, and the Legislature will work to identify transfers of other available funds, in the month of April, to continue the program.”

It also added that “the State Legislature must receive annual reports from the executive administration identifying all federal funds received and an exit plan should those federal funds be eliminated.”

In a statement following the hearing, Gress addressed the Democrats’ absence and Hobbs’ order for her agency directors not to attend.

“Fifteen minutes before the committee hearing began, I received a letter from Governor Hobbs criticizing legislative intent on providing oversight and learning exactly what happened. Now this is a pattern and a practice of Governor Hobbs. She fails to even acknowledge who’s responsible for this problem. Instead, it’s deflection and trying to scare families who rely on the DD services for their loved ones.

“We will not be deterred. Her unhinged, chaotic letter falls far below the standard that Arizonans expect of their leaders. We will continue to find the facts. We will be the adults in the room to provide a supplemental appropriation, and we will ensure that there are guardrails put in place so that this never happens again.

“Let me be very clear, we will not pass a financially irresponsible supplemental. It will include the reforms necessary to protect families who rely on DD for their loved ones. We demand accountability and transparency, and it’s going to happen soon.”

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.