Hobbs Directs Agency Heads to Skip Budget Mismanagement Hearing

By Matthew Holloway |

This week, Governor Katie Hobbs instructed her agency directors to refrain from attending the inaugural hearing of the Arizona House Ad Hoc Committee on Executive Budget Mismanagement. This directive arrived just 15 minutes before the meeting commenced. In a related development, Democratic members of the committee chose not to participate as well.

Committee Chairman Matt Gress (R-LD4) stated that leaders from the Arizona Health Care Cost Containment System (AHCCCS) and the Department of Economic Security (DES), both of whom are implicated in a $122 million shortfall in the state’s Developmental Disabilities program, were set to testify. Their absence raised concerns over oversight of the program, which is critical for Arizona families.

Gress criticized the governor, asserting, “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… What she calls a ‘political stunt’ is actually legislative oversight—a constitutional duty we will carry out.”

In the press release referenced by Gress, Hobbs, along with Democratic House Assistant Leader Nancy Gutierrez, dismissed the Ad Hoc committee as a “waste of time” and a “sham,” urging for a supplemental budget bill to address the shortfall instead.

Despite the absence of Democratic committee members, the hearing proceeded, allowing Republican members to examine budget data and listen to testimony from the Joint Legislative Budget Committee and former Idaho House Majority Leader Megan Blanksma. Her state faced a similar funding crisis, highlighting the severity of Arizona’s situation.

The committee produced formal findings, holding the Hobbs administration responsible for several issues, including:

• Without legislative approval, the administration significantly expanded the Developmental Disability program by making permanent a temporary COVID-era initiative.
• Changes to the DD program led to significant unfunded liabilities, creating a substantial budget deficit for FY2025.
• AHCCCS instigated a Corrective Action Plan that risked legal threats for DES, which would increase state costs under a program expanding parental hours for care.
• Implementation delays on cost control measures extended beyond 18 months, contributing to unrealistic expectations for families relying on the program.

The committee emphasized the need for federal funds to sustain the Developmental Disabilities program, urging the executive branch to identify available resources promptly. They also recommended annual reports from the executive administration detailing federal funds received and a contingency plan should those funds be terminated.

Following the hearing, Gress addressed the lack of Democratic representation and criticized Hobbs’ last-minute directive. He stated, “Fifteen minutes before the committee hearing began, I received a letter from Governor Hobbs criticizing legislative intent. This is a pattern of deflection from her, failing to acknowledge responsibility for the problem.”

Gress asserted that the committee remains undeterred, reaffirming their commitment to accountability and the necessity for fiscal reforms to protect families relying on the DD services. “We demand accountability and transparency, and it’s going to happen soon,” he promised.

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.