Arizona House Moves to Secure Funding for Developmental Disabilities Program
In a last-minute effort to secure vital services, the Arizona House of Representatives reached a bipartisan agreement to allocate emergency funds to a program supporting residents with developmental disabilities. This move comes just before the program faced potential funding exhaustion.
The Division of Developmental Disabilities, part of the Department of Economic Security, faced a $122 million shortfall that threatened to disrupt Medicaid-funded long-term care for those with developmental disabilities in Arizona.
For weeks, legislators were deadlocked over the funding approach, with Republicans demanding new fiscal controls and Democrats insisting on an unconditional funding package. However, a resolution seemed distant until recent negotiations prompted a breakthrough.
The Arizona Senate initially passed a funding bill without Democratic support. However, it faced rejection in the House when both Democrats and some Republicans voted it down. Further negotiations led to the approval of a revised bipartisan bill that omitted some contentious elements of the original proposal.
Rep. Matt Gress (R-Phoenix) remarked, “We didn’t get everything that we would like to have seen in this bill … but I believe that there were some major accomplishments that ensure that what happened to DDD will never happen again.”
In response to Governor Katie Hobbs’ veto threats, the House bill sought to balance Republican demands for fiscal oversight with Democratic priorities. The legislation includes provisions granting the Legislature veto power over future Medicaid waivers proposed by the Arizona Health Care Cost Containment System (AHCCCS).
Republicans have criticized Governor Hobbs’ administration, attributing the funding crisis to her decision to extend a program allowing parents to be paid as caregivers without legislative approval. Rep. Gress noted, “While the intent of continuing PPCG (Parents as Paid Caregivers) was humane, bypassing the Legislature and constitutional process has placed these families and the entire Division of Developmental Disabilities at great risk.”
Originally introduced during the COVID pandemic under Gov. Doug Ducey, the parent caregiver program has been essential for families lacking alternative care options. Parent Rachel Lack expressed the challenges faced, stating, “There’s a lot of parents that have kids that are 24/7 care, and they left their job. … They can’t go get a job, because there’s no one to take care of their kids.”
With the expiration of initial federal funding, the state needs to cover approximately a third of the program’s costs. The House bill proposes using the prescription drug rebate fund, which holds over $300 million, to cover the $122 million shortfall.
Democrats, including Rep. Nancy Gutierrez (D-Tucson), celebrated the funding approach as a victory for bipartisan cooperation. “This is a bipartisan plan, and it will protect care and lifesaving services for our most vulnerable Arizonans with disabilities, and it does it without harmful effects to other folks or taking away from homelessness or affordable housing,” Gutierrez remarked.
Gov. Hobbs had previously criticized the Senate’s plan to divert $38 million from the state’s Housing Trust Fund, stating, “While housing affordability remains one of the top issues facing our state, Republican lawmakers insist on making our housing crisis worse.” The House bill instead utilizes the prescription drug fund, aligning with Hobbs’ preference.
The revised legislation also includes measures to prevent billing for routine parental activities and sets a 40-hour-per-week limit on the parent caregiver program, a reform widely supported by stakeholders.
The House bill now awaits approval from the Arizona Senate before reaching Governor Hobbs, who has indicated her support for the negotiated solution. She stated, “This deal ensures critical services for disabled Arizonans will continue, delivers reasonable guardrails for the Parents as Paid Caregivers Program, and protects funding to respond to Arizonans’ housing needs.”
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