Arizona Lawmakers Fight Over DCS Funding Transfer in Fiery Partisan Showdown

Concerns over the funding for the Arizona Department of Child Safety (DCS) have been addressed after a bipartisan initiative secured financial support to prevent children from being forced to sleep in agency offices. Legislators from both parties voted to transfer essential funds for the DCS’s congregate care program, which was facing a financial shortfall.

On Thursday, the Joint Legislative Budget Committee (JLBC) unanimously approved a funding transfer just days before DCS was expected to exhaust its resources for the congregate care program. Previous debates marked by political tension highlighted disagreements on the responsibility for the funding crisis, prompting intense discussions about the state of DCS under Governor Katie Hobbs’s leadership.

House Republicans had staged a press conference, labeling the situation as a “financial mismanagement” crisis, claiming DCS would “go bankrupt.” However, DCS clarified that the program in question was set to run out of funds by March 24 and had requested a transfer of unspent money from other programs to bridge the gap.

Democratic members defended the routine nature of line item transfers, recalling similar funding adjustments made during former Governor Doug Ducey’s administration without significant objection. Yet, JLBC Chairman David Livingston, a Republican, emphasized that the last-minute notice from DCS—just 19 days before funds were set to expire—created unnecessary urgency and concern.

The DCS had identified potential budget shortfalls since September. While a deputy director informed lawmakers of the risk early in January, the precise date of the funding crisis became clear only in early March, further complicating responses from the JLBC. In a contentious exchange, Livingston criticized the administration’s communication, particularly regarding what he termed an unprofessional “demand letter” sent to the wrong address.

Ultimately, after extensive deliberation, the committee approved a $6.5 million transfer to sustain the congregate care program for an additional month and allocated an extra $2.5 million to support extended foster care services, which were also facing funding shortages due to rising case numbers.

Moreover, the committee approved a potential $10 million surplus from other DCS budget areas, aimed at extending financial support to congregate care until the end of the fiscal year, June 30. During these discussions, Livingston expressed frustration at his Democratic colleagues, urging them to recognize the implications of the governor’s fiscal strategies.

JLBC Director Richard Stavneak pointed out a systemic issue in the state’s budgeting practices, suggesting that ongoing funding needs are mistakenly treated as one-time expenditures. This has perpetuated a reliance on approximately $20 million intended to compensate for reductions in federal funding since Ducey’s tenure.

Livingston attributed the lack of necessary funds to Hobbs’s inaction and noted her responsibility for ensuring adequate financing for managed departments, which must be resolved before the upcoming fiscal year. The administration has submitted a request for $23 million in ongoing funding for congregate care in the upcoming budget, due for legislative approval.

Hobbs later denounced the critical responses from Republicans following the JLBC meeting, branding them as “shameful political stunts.” A spokesperson for the governor did not address specific accusations raised by Livingston.

In a final statement, both Hobbs and House Minority Leader Oscar De Los Santos asserted that the GOP’s portrayal of the DCS funding situation is misleading, intended to deflect attention from underfunding vital services for individuals with developmental disabilities. They highlighted the urgency of securing $122 million required to prevent interruptions in essential care for vulnerable populations, urging immediate action from Republican legislators.