Republican lawmakers are investigating Arizona Governor Katie Hobbs for allegedly securing a unique rate increase from the Arizona Department of Child Safety (DCS) for one of her top donors, Sunshine Residential Homes, a group home operator.
Sunshine Residential Homes, its CEO Simon Kottoor, and his wife Elizabeth contributed more than $500,000 to Hobbs and the Arizona Democratic Party.
Attorney General Kris Mayes cleared Hobbs of wrongdoing last month.
Arizona State Senator Jake Hoffman (R-LD15) has called on Mayes to release the documents from her investigation.
Arizona Senate Republicans claim that “the underlying evidence remains hidden” in Hobbs’ case.
Hoffman said that the evidence presented so far has created a clear appearance of pay-to-play corruption. Hoffman accused Mayes of having a political alliance with Hobbs that compelled her to decline to charge the governor of wrongdoing.
“The money, the favors, and the secrecy form a pattern that cannot be ignored,” said Hoffman. “The confluence of events here renders these allegations extremely credible and worth investigating.”
Lawmakers have subpoenaed materials concerning donations to Hobbs’ inaugural or legal defense funds by Sunshine Residential Homes, the Kottoors, or any executive of the group home operator.
Sunshine Residential Homes and both Kottoors were also subpoenaed, along with Abi Saifi, the director of programs at Sunshine Residential Homes.
They also requested materials concerning contracts or agreements between any state agency and Sunshine Residential Homes, and changes to compensation or reimbursement rates, formulas, or amounts paid by any state agency to Sunshine Residential Homes.
The U.S. Consumer Price Index rose 0.4% in August, accelerating from July’s 0.1% increase, while annual inflation remained at 3.4%, according to the latest release from the Bureau of Labor Statistics. Gasoline prices accounted for more than one-third of the monthly increase.
In the Phoenix-Mesa-Scottsdale area, consumer prices increased 2.5% over the year ending in August, below the national rate, but eased back from June’s 2.8%. Local energy prices rose 19.1% over that period, including a 32.5% increase in gasoline prices.
Nationally, gasoline prices increased 3.9% during August, and the broader energy index rose 2.1%. Shelter costs increased 0.3%, while food prices rose 0.1%. Grocery prices were unchanged for the month, and food away from home increased 0.3%.
CPI-U increased by 0.40% in August & rose to 3.40% over the past year. Core CPI, which excludes food & energy, +0.29% in Aug & +2.45% over the past year. Energy inflation +2.10% in Aug & +16.28% over the past year. Food inflation +0.12% in Aug & +2.67% over the past year.…
— Joint Economic Committee Republicans (@JECRepublicans) September 11, 2026
Core inflation, which excludes food and energy, increased 0.3% in August following a 0.2% rise in July. Over the preceding 12 months, core prices increased 2.4%, energy prices rose 16.3%, and food prices increased 2.7%.
The national monthly figures are seasonally adjusted. The annual changes are measured before seasonal adjustment.
The Joint Economic Committee (JEC) Republicans’ August inflation update, released this month, provided calculations to two decimal places. It reported monthly headline inflation of 0.40% and core inflation of 0.29%, compared with Cleveland Federal Reserve forecasts of 0.36% and 0.20%, respectively.
The committee’s calculations placed annual headline inflation at 3.40% and annual core inflation at 2.45%. Its report notes that differences in change figures can result from rounding.
Across the four regions identified in the committee’s accompanying release, annual inflation was highest in the Northeast at 3.9%, followed by the Midwest at 3.6%, the West at 3.2%, and the South at 3.1%. In its release accompanying the update, JEC Republicans reported annual inflation of 3.9% in the Northeast, 3.6% in the Midwest, 3.2% in the West, and 3.1% in the South.
Phoenix-area prices increased 0.5% over the two months ending in August. During that period, local energy prices increased 4.6%, food prices declined 1.6%, and prices excluding food and energy rose 0.5%. The local BLS figures are not seasonally adjusted and cover a two-month period.
Over the year, Phoenix-area food prices increased 1.7%, including a 1.0% increase in grocery prices and a 2.5% increase in food away from home. Local core inflation was 1.3%, while shelter prices declined 0.3%.
Inflation-adjusted earnings were mostly steady in August. Real average weekly earnings for employees on private nonfarm payrolls increased 0.16%, while real average hourly earnings declined 0.09%. Over the year, real hourly earnings declined 0.3% and real weekly earnings increased 0.3%.
Chandler Unified School District (CUSD) narrowly approved a land acknowledgment statement for Native Americans during its regular meeting last week.
The board approved the land acknowledgment statement 3-2. The governing board will read a land acknowledgment statement at every meeting and at all graduation ceremony programs.
Board President Patti Serrano, donned in a pro-Palestine keffiyeh scarf and MEChA t-shirt, joined Member Claudia Mendoza and Vice President Barb Mozden in voting to require the land acknowledgment statement. Members Kurt Rohrs and Ryan Heap voted against the measure.
Serrano said this land acknowledgement statement was necessary to make Native American students feel “safe” to show up and learn at CUSD schools.
Serrano also claimed that a land acknowledgment statement did not mean that the district would be required to accept requests for acknowledgments for other identity groups.
CUSD has posted a land acknowledgment statement and accompanying video on its Indigenous Education Program page since 2025.
That land acknowledgment statement reads that the district exists on lands previously occupied by the Piipaash, Akimel O’odham, Gila River, Salt River, Pima, Maricopa, and Yaqui tribes.
Board member Rohrs questioned whether there would be future efforts to expand the requirement to read a land acknowledgment statement throughout other aspects of district activities, such as student functions like football games, CUSD staff meetings, and the beginning of classes.
Rohrs also said that land acknowledgement statements signaled bias and favoritism toward certain groups. He warned that the board’s approval would lead to demands by countless other identity groups: Holocaust recognition for Jewish students, acknowledgments for the various religious groups, or commemorations of veterans for students in military families.
Rohrs contended that the statement was rooted in “identity politics” that would further cause division in the CUSD community.
“Despite denials, this is clearly a political statement that reveals a preferential and exclusive bias towards a certain point of view of a certain identity group. The district must remain neutral in these matters,” said Rohrs. “For practical matters, this unnecessarily politicizes our board meetings. It has no real purpose in addressing our primary mission of improving academic performance for our students. This statement is an empty performance gesture of wokeness which really doesn’t accomplish anything and distracts from our core mission.”
Board member Heap remarked that the district faces much more pressing matters concerning student outcomes, citing an example of two more students who left the district for homeschooling due to the district ignoring or dismissing requests to curtail teacher and student usage of vulgar language. Heap also remarked that reading scores have declined to the lower 50th percentile.
Heap expressed doubt that the lack of a land acknowledgment statement was having negative impacts on the district, especially the current pressing issues of declining enrollment. According to the board, less than 2% of students will be directly impacted by the land acknowledgement statement.
Heap questioned why there were acknowledgments for certain identity groups but not others, which prompted laughter from the pro-land acknowledgment statement audience in attendance.
“Any time when we choose to highlight a group of students only based on their identity, nationality, heritage, we indirectly eschew — that means, you ignore — other people. We have a Hispanic heritage month. Do we have an Irish month? Do we have an Anglo-Saxon month?” asked Heap. “I don’t think that it’s appropriate for us to engage in that activity, either, because we are now wandering in areas that even if it’s right or wrong, I believe this statement ends up [having] a political connotation. Anytime you do that, you show bias, and that’s going to end up driving away students.”
Mendoza said that the statement was necessary for respecting diversity and belonging.
“By doing this, we are demonstrating that every story matters and every voice has value,” said Mendoza.
Mozden predicted the statement would improve Native American students’ academic performance.
“We have to start somewhere to try to raise our academic performance for some of our subgroups,” said Mozden.
The land acknowledgment incited some community members to call on Serrano to step down from the board, since Serrano led on the effort of its adoption.
Serrano has been accused of imposing a land acknowledgment without board concurrence at board meetings and graduation ceremonies.
Serrano has historically declined to participate in recitation of the Pledge of Allegiance, and took her oath of office on a fiction book written by Arizona State University professor David Boyle describing the gay sexual fantasies of a boy and his peers and the boy’s rejection of the values held by his conservative, Christian parents.
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The federal government may withhold Medicaid payments toArizona for failure to comply with annual audit requirements.
Arizona failed to file its Fiscal Year 2025 Single Audit Report by the March 31 due date. As of this report, the audit report has yet to be filed.
The Department of Health & Human Services (HHS) sent a letter toGov. Katie Hobbs in mid-July notifying her of the state’s noncompliance.
As mentioned by HHS Assistant Secretary for Financial Resources Gustav Chiarello in that notification letter, Arizona has failed every year under the Hobbsadministrationto file its annual audits on time. The fiscal year 2024 report was filed more than a year late, and the fiscal year 2023 and 2022 reports were both filed nearly nine months late.
“These substantially late submissions leave Arizona’s Federally funded programs with significant gaps in oversight, heightening the risks to program integrity and to the individuals and families who depend on these critical health and human services programs,” stated Chiarello.
HHS gave Hobbs until July 31 to either provide proof of the audit report submission or a proposed corrective action plan. The latter would require HHS approval in order for the agency to release payments.
The Arizona Health Care Cost Containment System (AHCCCS) manages Medicaid in the state. AHCCCS has operated without stable leadership since Hobbstook office. Hobbs appointed Carmen Heredia to serve as director shortly after she took office, but Heredia resigned in April 2025 amid legislative dispute over her appointment.
Lawmakers accused Heredia of mismanaging AHCCCS regarding Medicaid contracts. Hobbs maintained that Heredia’s directorship was a success, citing nearly $1 billion in Medicaid fraud recoveries in addition to years of cost savings.
Hobbs appointed Virginia “Ginny” Rountree late last September, but Rountree resigned just five months later in early February of this year.
AHCCCS is led currently by interim director Roberta Harrison.
AHCCCS has undergone intense scrutiny by lawmakers regarding Medicaid waste, fraud, and abuse, as well as testimonies of program disruptions impacting providers and services since Hobbstook office.
State Sen. Janae Shamp, former senate majority leader who has focused heavily on oversight of Arizona’s Medicaid program, questioned the history of audit report delays under Hobbs and whether the governor had submitted an acceptable action plan to HHS.
@HHSGov just put it in writing: Arizona is NOT compliant on the FY25 Single Audit. Due March 31. Not filed. Why? Hiding something?
@katiehobbs@GovernorHobbs what is your action plan to ensure vulnerable, innocent Arizonas do not suffer from your administration's incompetence? pic.twitter.com/wZhOweLqnB
— Former Majority Leader of the AZ State Senate (@AZSenatorShamp) September 12, 2026
Shamp hosted a press conference last summer warning of Medicaid waste, fraud, and abuse under the Hobbsadministration. Shamp revealed that only 23% of enrollees in recent years underwent proper eligibility vetting. One-third of that 23% failed verification, and more than 49,000 enrollees were also enrolled in other states’ programs.
“More than three-quarters of Arizonans enrolled toreceive this public benefit did not get the necessary review to determine if they were qualified toreceive it,” said Shamp.
Why did Arizona check only 23% of Medicaid enrollees for assets?
Over a third of Medicaid enrollees were too rich to qualify.
— Former Majority Leader of the AZ State Senate (@AZSenatorShamp) June 17, 2025
In a statement, Shamp said that her three years of Medicaid scrutiny relating to the state budget have only incurred ire from the Ninth Floor.
“Last time I pressed it during budget discussions, I was accused of trying to sabotage the budget process even though a whistleblower confirmed billions in improper payments in the same programs these audits are supposed to oversee,” said Shamp.
Last week, Treasury Secretary Scott Bessent announced that its Financial Crimes Enforcement Network had identified approximately $17.5 billion in potential healthcare fraud spanning all 50 states as well as Puerto Rico, Guam, and the Virgin Islands.
The U.S. House of Representatives passed Kayleigh’s Law in late August, introduced in April by Rep. Abe Hamadeh (R-AZ-08). The Senate Judiciary Committee has not yet scheduled action on the measure.
H.R. 8481, the Kayleigh’s Law Act of 2026, passed the House by voice vote on Aug. 31; no individual vote tally was recorded. Reps. Andy Biggs (R-AZ-05), Eli Crane (R-AZ-02), Paul Gosar (R-AZ-09), Juan Ciscomani (R-AZ-06), and David Schweikert (R-AZ-01) were original cosponsors.
🇺🇸WATCH🇺🇸
"Mr. Speaker, I rise today as a former prosecutor and as an Arizonan who has seen what happens when the system prioritizes a criminal over the victim."
Congressman Hamadeh takes the House floor to champion his bill, H.R. 8481, the Kayleigh’s Law Act of 2026. pic.twitter.com/Yq4fy8PuHH
— Office of Congressman Abe Hamadeh (@RepAbeHamadeh) August 31, 2026
The Senate companion, S. 5372, was introduced Aug. 7 by Sen. Mike Lee (R-UT) and referred to the Senate Judiciary Committee. No hearing or markup date has been posted.
The bill is named for Kayleigh Kozak, an Arizona mother of five who was sexually abused as a child by her soccer coach. In 2020, 13 years after the offender’s conviction, Kozak was brought back to court when her attacker sought to end his lifetime probation.
🇺🇸WATCH🇺🇸
Congressman Hamadeh promised @kayleigh_kozak that if he got to Congress, he would pass federal Kayleigh’s Law, the lifetime no-contact protection Arizona enacted in her honor.
He introduced it. He pushed it. Yesterday, he brought Kayleigh and her family to the… pic.twitter.com/xYjFyGiQt6
— Office of Congressman Abe Hamadeh (@RepAbeHamadeh) September 1, 2026
Arizona enacted its state version of Kayleigh’s Law through Senate Bill 1653 in 2022. The federal bill would require a court at sentencing to issue a lifetime no-contact order when a victim—or the government with the victim’s consent—requests one following a conviction for a qualifying federal violent felony or sex offense. The order could be suspended or terminated only under limited circumstances specified in the bill. Victims could not be charged a fee for its issuance.
Lee said in August that victims “often have to face their abusers in court over and over again.” Kozak said the harm caused by sexual assault is lifelong and its protections should be as well.
Like too many other abuse victims, @kayleigh_kozak was forced to repeatedly face the soccer coach who assaulted her as a child, just to get courts to keep him away.
Victims deserve protection, not more fear for their safety.
Hamadeh called the House vote “promise made, promise kept.”
In a post on X, Biggs wrote, “The U.S. House did its job to protect victims of certain violent crimes in passing Kayleigh’s Law this week. Now, the U.S. Senate must act before the clock runs out on us in January. We cannot fail these victims. We must send Kayleigh’s Law to the President’s desk.”
The U.S. House did its job to protect victims of certain violent crimes in passing Kayleigh’s Law this week.
Now, the U.S. Senate must act before the clock runs out on us in January.
We cannot fail these victims. We must send Kayleigh's Law to the President's desk.
In a post quoting Biggs, Lee wrote, “Proud to have introduced Kayleigh’s Law in the Senate. Victims should not suffer years of unwanted contact with their abusers. And @RepAndyBiggsAZ is right: as with a large number of important House bills, we need to stop sitting around and PASS IT to President Trump’s desk!”
Proud to have introduced Kayleigh’s Law in the Senate. Victims should not suffer years of unwanted contact with their abusers.
And @RepAndyBiggsAZ is right: as with a large number of important House bills, we need to stop sitting around and PASS IT to President Trump’s desk! https://t.co/mRum5DDMgN
Legislation that does not become law before the 119th Congress ends in January would have to be introduced again in the next Congress.
AZ Free News contacted Lee’s office seeking a timeline for Senate Judiciary Committee consideration. No response was received by the time of publication.
Republicans hold the majority on the Judiciary Committee, which is chaired by Sen. Chuck Grassley (R-IA). The House passed the measure without recorded opposition. Its next potential steps include a committee hearing or markup on S. 5372, or Senate consideration of the House-passed bill.
Until the Senate acts, the Arizona-born proposal remains legislation and has not reached the president.
The U.S. Small Business Administration (SBA) announced last week that it will prioritize applications from small businesses in defense-critical manufacturing industries for its 8(a) Business Development Program as revised eligibility requirements take effect for individually owned firms. The new guidance also calls for restoring financial and business document reviews of applicants.
The priority industries include missile and space vehicle manufacturing, aircraft parts, navigation and guidance systems, electronic components, ammunition, and machine shops. Arizona’s aerospace and defense supply chain includes more than 1,250 companies.
The Trump SBA recognizes that American battle readiness depends on Main Street small businesses. That’s why we are now prioritizing processing for 8(a) applicants in defense-critical industries.
This change will strengthen domestic supply chains by fast-tracking defense-critical… pic.twitter.com/14cAgbdJtb
“Arizona is a leader in the aerospace and defense industry and a hub for missiles, space, avionics, navigation, electronics, precision manufacturing, and aircraft-related production, with a supply chain of more than 1,250 aerospace and defense companies,” said SBA Pacific Regional Administrator Steven Snow. “By prioritizing qualified 8(a) applicants in defense-critical industries, SBA is helping Arizona small businesses compete for federal contracts, expand production capacity, strengthen domestic supply chains, and deliver the components and capabilities that support America’s military readiness.”
The 8(a) program provides federal contracting opportunities and business development assistance to qualifying small businesses. The SBA’s certification portal lists benefits including access to sole-source and competitive set-aside contracts, assistance from federal procurement experts, and support from business opportunity specialists.
Under the guidance, the SBA will prioritize application review and processing for businesses operating in 10 designated North American Industry Classification System categories. Along with aerospace, electronics, and ammunition manufacturers, the list includes iron and steel mills, ferroalloy manufacturing, miscellaneous fabricated metal products, and shipbuilding and repair. The priority applies to processing applications for program admission. The SBA’s announcement identifies the eligible industry codes.
“Under President Trump’s leadership and our partnership with Secretary Hegseth on the Smaller War Plants Commission, the SBA is leveraging the 8(a) Program to reindustrialize America and build out the network of small manufacturers and suppliers that equip our warfighters,” SBA Administrator Kelly Loeffler said.
The guidance supports the Smaller War Plants Commission, which the SBA and the Department of War announced August 25 as an effort to strengthen defense industrial production capacity.
A separate final rule published in August removes the regulatory presumption that members of certain racial and ethnic groups are socially disadvantaged. It establishes revised standards for individual applicants to demonstrate disadvantage.
Under the revised standards, applicants must provide evidence of discrimination, bias, or favoritism affecting a racial, ethnic, or cultural group and self-certify that they belonged to the affected group and suffered material harm. The regulation defines material harm as lost access to, or diminished opportunities for, economic advancement.
The rule applies to individually owned applicants. It does not change eligibility for businesses owned by tribes, Alaska Native corporations, Native Hawaiian organizations, or community development corporations. The final rule details those distinctions.
The SBA also said it is restoring “potential for success” reviews, including comprehensive evaluations of financial records and business documents intended to assess whether applicants can perform federal contracts. The agency has posted guidance on those reviews through MySBA Certifications.
The agency will return pending applications from individually owned businesses through its “Return to Business” system so applicants can address the revised requirements and provide updated financial records. Applicants will have 45 calendar days to complete the updates and resubmit their applications, the agency said.
