On April 3, the House Ad Hoc Committee on Executive Budget Mismanagement held its first public hearing. The purpose of that hearing was to find answers regarding recent cost overruns by the Division of Developmental Disabilities (DDD) and more specifically, the Parents Paid as Care Givers (PPCG) program within the DDD.
Those cost overruns amount to $120 Million to continue funding the division through the end of the current budget on June 30.
The Ad Hoc Committee on Executive Budget Mismanagement was recently created by House Speaker Steve Montenegro to address recurring instances of apparent mismanagement by the Hobbs Administration. More specifically, the stated purpose of the committee is:
- To review budget year programs administered by executive agencies
- Analyze the January executive budget proposal
- Provide recommendations to the House pf Representatives on managing cost overruns and preventing agencies from facing bankruptcies
The committee is composed of six Republican members and three Democratic members as follows:
| REPUBLICAN MEMBERS | DEMOCRATIC MEMBERS |
| Matt Gress – LD4 (Chairman) | Nancy Gutierrez – LD18 |
| Justin Olson – LD10 (Vice chairman) | Stephanie Stahl Hamilton – LD21 |
| Michael Way – LD15 | Kevin Volk – LD17 |
| Nick Kupper – LD25 | |
| Neal Carter – LD15 | |
| Selina Bliss – LD1 |
The April 3 hearing was intended to be attended by:
- All members of the committee
- Carmen Heredia, Director of AHCCCS, to answer questions
- Michael Wisehart, Director of DES, also to answer questions
- Megan Blanksmath, former Idaho legislator, to report on how Idaho solved a similar problem.
- A representative of the Joint Legislative Budget Committee (JLBC), to provide a timeline of how we got to the current situation, facing a substantial shortfall and a demand for additional funding of the DDD program.
However, in his opening remarks, Committee Chairman Matt Gress revealed that 15 minutes before the committee convened, he received a communication from Hobbs stating that the two members of her administration will not be attending the hearing. Her stated reason for boycotting the hearing was that it was nothing but a political circus, among other things. Mr. Gress’ response was that legislative oversight is not a political circus but a constitutional function that this house will discharge.
All three Democratic members of the committee also boycotted the hearing.
This also prompted the following post on X by the Arizona House Republicans:
WATCH Chairman @MatthewGress reply: “…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… https://t.co/18GiSxfACt pic.twitter.com/LeHZ9mtixB
— Arizona House Republicans (@AZHouseGOP) April 3, 2025
The hearing consisted of three sections:
- A presentation by the JLBC on the timeline of events that led to the current situation
- Megan Blanksmath’s description of how the Idaho legislature addressed a similar problem
- Consideration of legislative findings that will be forwarded to the full House as they consider responding to the DDD crisis.
JLBC timeline presentation:
- April, 2020 – Because of Covid 19, several states were granted temporary authority from the feds for parents to provide certain services to minor children.
- March, 2021 – Congress approved one-time 100% federal funding for added home and community-based services, which in AZ included state implementation of the Parents Paid Care Givers program (PPCG).
- September, 2023 – On behalf of DES, AHCCCS submitted waiver to continue PPCG after the 100% federal funding expires in March, 2025
- February, 2024 – the federal government approved AZ’s waiver to continue program through September, 2027
- April, 2025 – state will begin to fund 1/3 of program costs
- Waiver required state to cap weekly use of PPCG at 40 hours per child
- January, 2024 – FY225 Executive Budget is published, includes $4 Million General Fund request for state match cost of PPCG
- During the 2024 session, estimated cost of the program increased considerably.
- June, 2024 – The FY25 budget is enacted, but does not include specific funding for PPCG because no agreement was reached between the executive and the legislature.
- October, 2024 – AHCCCS/DES implemented capitation rate increase that incorporates costs of PPCG, which was estimated at $56M General Fund
- December, 2024 – Joint Legislative Budget Committee provided an unfavorable review of the rate changes. An unfavorable review does not block implementation of the rate increase.
- January, 2025 – FY26 Executive Budget includes $109M General Gund supplemental for DD formula costs
- This dollar amount includes both PPCG and non-PPCG costs.
- July, 2025 – DES plans to implement the 40-hour weekly cap on PPCG.
- DES is reviewing the standards for case workers to use in determining when the use of PPCG is appropriate.
- DES plans to revise its coding as to delineate PPCG hours.
The panel had several questions, the answers to which could not be provided because the agencies that would have the knowledge to answer them, DES and AHCCCS were absent as the result of Hobbs’ boycotting of the hearing.
Megan Blanksmath’s Suggestions:
Even though Idaho is a state much more conservative than Arizona, and has a Republican governor, they did have a similar problem of disconnect between the legislature and the executive agencies.
That disconnect was finally resolved by the implementation of legislature to clarify the role of the agencies and to bring them in sync with the mood of the state.
That legislature included three features:
- Report from the administration on federal funds and how they are being used
- Legislative approval if any waivers issued by the federal government created an increase on the moneys to be spent by the state
- Exit strategy for agencies to deal with the situation if federal funds dry up
Legislative Findings
Because of a litany of instances of mismanagement of the PPCG program, the committee is recommending the following actions:
- Require that the executive identify available federal funds in the month of April that may be reallocated to continue the plan.
- The legislature must receive annual reports identifying all federal funds and an exit plan should those federal funds be reduced.
Given the fact that it is so late in the current legislative session, it is not clear whether any legislation concerning this issue may be enacted.
BREAKING: Democrats refuse to attend today’s hearing on Governor Hobbs’ pattern of budget mismanagement.
Chairman @MatthewGress‘s message to Arizona parents: “Rest assured that House Republicans are here on behalf of the families who rely on Arizona’s Developmental… pic.twitter.com/RG3Skfe33T
— Arizona House Republicans (@AZHouseGOP) April 3, 2025
