Political standoff threatens services for thousands of disabled Arizonans

Disability rights advocates gather Feb. 26 at the Arizona Capitol in Phoenix to urge Democratic Gov. Katie Hobbs and Republican legislative leaders to remedy a funding shortfall in the state’s Division of Developmental Disabilities that could leave them suddenly without essential services. Photo by Caitlin Sievers | Arizona Mirror

Phoenix mother Jessica Grace relies on state and federally funded programs to provide vital services for her sons. Now, she could face once-unthinkable choices because of a political fight between the GOP legislature and Democratic governor over funding those programs. 

With the spectre of losing services as early as May looming, Grace told the Arizona Mirror that she and her family are trying to wrap their heads around the worst case scenario of institutionalization. The teens, who have autism and intellectual disabilities, cannot safely be left unsupervised. 

“How are we going to plan for our future?” Grace asked. “How am I going to properly address our needs?”

Gov. Katie Hobbs and the Republicans who control the state legislature have spent weeks trading barbs over who’s at fault for an impending lapse in funding. Meanwhile, people with disabilities who face the possibility of losing vital services are caught in the middle. 

If Hobbs and GOP lawmakers don’t come to an agreement about how to deal with a $122 million deficit in the state’s Division of Developmental Disabilities budget by the end of April, Grace’s family will be among the tens of thousands of Arizonans with disabilities who could suffer the consequences. 

A group of parents, caregivers and people with disabilities made the difficult trek to the Capitol Wednesday to urge lawmakers to view them and their families as people in need of essential services instead of line items in a budget. 

Grace, like many other parents who attended the protest, relies on the Parents as Paid Caregivers Program at the center of the funding debate.

The Parents as Paid Caregivers Program was implemented in Arizona in 2020 during the height of the COVID-19 pandemic when service providers couldn’t find workers willing to go into peoples’ homes to provide caregiving services. 

The program, which was initially completely federally funded, pays parents to provide care to their own children, if their children require “extraordinary care” above and beyond typical parenting tasks. The parents must undergo the same training as professional caregivers to care for their children, of any age, who have cerebral palsy, autism, epilepsy or intellectual or cognitive disabilities. 

The Arizona Health Care Cost Containment System, the state’s Medicaid program, received permission from the federal government in February 2024 to make the program permanent. But going forward, it would require a 35% state match, and Republicans in the Legislature refused to allocate funding specifically for the program in the 2025 fiscal year budget. 

On Jan. 29, Arizona Department of Economic Security Deputy Director Wes Fletcher explained to legislators on the House Appropriations Committee that DDD is facing a $122 million shortfall before the fiscal year ends on June 30. He said the program’s costs were higher than expected largely due to growth in the Parents as Paid Caregivers program, as well as increases in payment amounts to Medicaid providers. 

If the state doesn’t take action on the shortfall, DDD is at risk of defaulting on its contracted payments to service providers. And if that happens, it could put those providers out of business, making what seemed like a temporary problem permanent. 

When the Hobbs administration in January asked legislative appropriators for an additional $122 million to make up the difference, committee Chairman David Livingston, R-Peoria, scoffed at the idea, accusing Hobbs of overstepping her authority by continuing the program after the Legislature refused to fund it. 

Since then, Hobbs and Livingston have sparred publicly, trading barbs in a series of letters and press releases, each blaming the other for the crisis looming over disabled people and their families. 

Meanwhile, parents of disabled people who rely on DDD services and groups that advocate for them are panicking at the prospect of losing the Parents as Paid Caregivers Program — to say nothing of the payments for medical services, occupational therapy and physical therapy that will abruptly end if the department runs out of money in May. 

During the Jan. 29 meeting, Livingston proposed a 25%-50% cut to the Parents as Paid Caregivers Program that he acknowledged was “going to hurt.” Livingston said that the state can’t fund “unlimited growth” in programs no matter how important they are. 

Plus, he said, state leaders need to prepare for the inevitable federal cuts that are coming as President Donald Trump promises to slash funding. 

In a bit of irony, Rep. Matt Gress, R-Scottsdale, in the same meeting accused Hobbs of making the Parents as Paid Caregivers program permanent “without appropriate legislative authority” — the same thing that Trump has done at the federal level when he fired workers and slashed budgets without approval from Congress. 

“Make no mistake about it: Governor Hobbs is responsible and now the Legislature is going to have to clean up her mess,” Gress said. 

On Wednesday, Kathleen Muldoon, one of the leaders of Care 4 Caregivers, told other advocates gathered at the Capitol about her 11-year-old son, who has 42 medical diagnoses. He relies on a team of 20 medical professionals, some provided through DDD and Medicaid, to navigate everyday life. 

“People with disabilities cannot reduce their needs by 25% to 50%,” she said. “Their medical conditions won’t pause, their care requirements won’t shrink. Slashing these services will force thousands into institutions, stripping them of their independence; drive providers out of the workforce, worsening Arizona’s caregiver shortage; and create a ripple effect of increased public spending, higher hospital costs, and put economic strain on families and communities alike.”

Many parents who use the Parents as Paid Caregivers Program, like Grace, can’t work outside the home because they can’t find alternative care for their children, and their children cannot safely be left alone. Those children would still qualify for DDD-funded at-home care even if the Parents as Paid Caregivers was cut, they just likely wouldn’t be able to find anyone to do it. 

If DDD runs out of funding or the parent program ends, Grace said that her family will have to start living on savings that will eventually run out. She built up those savings with the hope that her sons wouldn’t have to be institutionalized after she and her husband die. 

Grace and her 14-year-old son have attended multiple House Appropriations Committee meetings over the past month to advocate for the Legislature to approve the $122 million in supplemental funding. It’s been both heartwarming and soul crushing, Grace said, to see her son empathize with other kids with disabilities who were at the meetings, especially since he has autism, which can make empathy a challenge.  

“This shouldn’t be something my 14-year-old feels he needs to carry on his shoulders,” she said. 

Unintended impact

Brandi Coon, co-founder of the Raising Voices Coalition, which advocates for people with disabilities, told the protesters gathered at the Capitol Wednesday that cutting the Parents as Paid Caregivers Program would actually have the opposite impact than what lawmakers intend.

“Without Parents as Paid Caregivers, many families would face further financial devastation, and be forced to consider institutional placement or relinquish guardianship of their child to the state, which is not only disruptive and heartbreaking, but extremely more expensive for Arizona,” Coon said. 

In 2019, the Government Accountability Office found that Medicaid costs for home-based services for people with disabilities were generally lower than those for institutionalization. 

In 2021, Coon began advocating to make the parent program permanent. The caregiver shortage predated the pandemic and continuity of care had always been a problem because of a high turnover rate for caregivers due to the difficulty of the job coupled with low pay. 

Gabrielle Ficchi, co-founder of Care 4 the Caregivers, told protesters that her parents were advised to institutionalize her when she was 3 years old due to a cerebral palsy diagnosis. 

Now, she’s a therapist with a doctorate, thanks in part to the kinds of services provided by Medicaid that might be cut if the funding gap isn’t addressed. 

“These services are not luxuries,” she said. “They’re what allows disabled people to be contributing, valuable members of their society.” 

Ficchi credited those services with allowing her to reach her full potential. 

“These people want disabled people to stop being a ‘burden on society,’ but then they want to take away the services that allow us to figure out how to be more independent,” she said. 

Solutions

Coon told the Mirror that she had met with several Republican lawmakers in the past few weeks to advocate for the legislature to approve the $122 million in supplemental funding, including Gress, Livingston, Senate President Warren Petersen and Sen. Mark Finchem. 

“I’m hopeful that we can get this gap funding in place and continue the conversations about how to improve DDD and long-term care so that it’s sustainable long term,” Coon said, adding that the legislators said they want to cut waste and improve services. 

Finchem’s Senate Bill 1302, which would put an additional $130 million per year toward caregiver pay increases starting in the 2026 fiscal year, passed through the Senate Appropriations Committee unanimously on Feb. 25. 

Republicans on the House Appropriations Committee already shot down a proposal from Democrats to allocate the $122 million in gap funding, and Livingston has said that he’ll only agree to any supplemental funding through the state’s traditional budget process. 

The Legislature and Hobbs have until June 30 to negotiate a budget. They typically don’t pass their package of budget bills until May or June, and to prevent the DDD funding cliff they would have to do so in April. 

“There’s a lot of public performance within the committees,” Coon said, but she added that Republican legislators have been much more personable and understanding in one-on-one conversations. 

“But words aren’t actions,” she said. 

Livingston and other Republicans have accused Hobbs of refusing to negotiate on the gap funding or the 2026 budget as a whole, while Hobbs accused them of the same. 

During a Wednesday morning press conference, Hobbs claimed that she had started negotiations on the budget simply by sending her proposed budget to Republicans. When asked whether she’d sat down with Republican leaders to talk things through, Hobbs said they needed to send her their proposed budget first or there was nothing to talk about.