Montenegro Mulls Funding Redirect for Second Child-Related Agency

Flanked by members of the Arizona House, minus Freedom Caucus members, Arizona House Speaker Steve Montenegro exposed what he described as another financial crisis created by Governor Katie Hobbs. In a news conference on March 17, 2025, Montenegro reported that just “a few days ago,” he was notified via a routine email that the Department of Child Safety’s Congregate Care program was set to go bankrupt.

Expressing concerns that the funding shortfall would leave Arizona’s most vulnerable children at risk, the Speaker asked, “Madam Governor- Do you have a phone?” He continued, “This is not a simple oversight—it is gross financial mismanagement at the highest level,” adding, “Governor Hobbs has made a habit of overspending, ignoring reality, and then sounding the alarm only when disaster strikes. The difference here is that Arizona’s children will be the ones to suffer for her failures. That’s why I’m taking immediate action.”

Montenegro continued, “This is a pattern. Congregate Care is set to go bankrupt next week. The Governor’s mismanaged Developmental Disabilities program will collapse by the end of April. Her administration failed to budget for formula growth in AHCCCS for two years straight—racking up hundreds of millions in unaccounted costs. The list goes on.” He concluded, “This is not leadership. This is incompetence.”

You can read the Globe’s reporting on the Division of Developmental Disability budget shortfall here and on the AHCCCS financial failures here.

Majority Leader Michael Carbone, Majority Whip Julie Willoughby, Speaker Pro Tempore Neal Carter, and members of the House Republican Majority joined the Speaker, each condemning Hobbs’ mismanagement.

Montenegro subsequently directed the Chairman of the Joint Legislative Budget Committee to convene the committee and instruct the Hobbs administration to redirect other existing funds to prevent harm to children receiving program care from the Department of Child Safety (DCS). The Speaker stressed that this is not a bailout but a call to Hobbs’ administration to fix the situation stemming from its failure to spend wisely.

Montenegro also announced the creation of a House Ad Hoc Committee on Executive Budget Mismanagement to investigate the Hobbs administration’s repeated fiscal failures. This is a developing story.