AZ Legislative Update

State Budget RECAP

On June 15, $16.1B budget was passed by Legislature. Then signed by Governor Hobbs on June 18, but the State still has a 1.3B deficit. Due to this, there are about $600M in cuts. All legislation goes into effect 90 days later, giving time for agencies to proceed forward with these new implemented bills.

Although there were cuts, there was also an investment of $12 million in childcare assistance. First Things First, expressed their gratitude over this new investment. They stated, “The First Things First Board would like to express gratitude for the Arizona Legislature’s investment of $12 million in childcare assistance through the Arizona Department of Economic Security. We’d also like to thank Gov. Katie Hobbs for her leadership and vision in prioritizing the childcare investment in her proposed budget.” Read the Full Statement here

The budget items listed below may impact early childhood systems: 

Department of Economic Security (DES)

The department provides an array of services for low-income households and others in need. These services are provided through the following divisions: Administration, Developmental Disabilities; Benefits Division of Child Care and Medical Eligibility, Child Support Enforcement, Aging and Adult Services; and Employment and Rehabilitation Services

• Child Care Network Funding 
  • Amount: FY25 $12M *GF (Received One-time funding)
  • Purpose: To Improve access and quality of childcare for families
  • Other notes: At least 10% must go to childcare providers located outside Maricopa, Pima, and Pinal County
• Arizona Early Intervention Program (AzEIP) 
  • Amount: $2M *GF (reduced from $4.4M)
  • Purpose: AzEIP provides screening and intervention services for children aged 0 to 3 with developmental delays or disabilities.
• Child Care Assistance Program
  • Amount: $131M *FF
  • Purpose: To provide childcare assistance for low-income working families, Temporary Assistance for Needy Families (TANF) recipients, and those transitioning out of TANF, ensuring children receive quality care while their parents work or pursue education.

Some locally based projects that received funding include:

• Navajo Nation Youth Program 
  • Amount: $500,000 *GF
  • Purpose: To provide services and support to children and young adults within the Navajo Nation community.
• Low-Income Food Services for Tribal Reservations
  • Amount: $250,000 *GF (One-time funding)
  • Purpose: To support food services for low-income individuals on tribal reservations.
• Navajo Nation Women’s Shelter and Social Services
  • Amount: $500,000 *GF (One-time funding)
  • Purpose: To provide shelter and social services for women in the Navajo Nation.
• Nutrition, Housing, and Rental Assistance Programs in Pinal County
  • Amount: $500,000 *GF (One-time funding)
  • Purpose: To fund essential services in Pinal County to support nutrition, housing, and rental assistance.
• Pascua Yaqui Tribe Social Services Program
  • Amount: $1,000,000 *GF (One-time funding)
  • Purpose: To support social services for the Pascua Yaqui Tribe.
• Food Distribution for Low-Income Individuals in Cochise County
  • Amount: $1,000,000 *GF (One-time funding)
  • Purpose: To ensure food security for low-income individuals in Cochise County.

Department of Child Safety (DCS)

The department investigates reports of child abuse and neglect, promotes the safety of a child in a stable family or other out-of-home placement in response to allegations of abuse or neglect, works with law enforcement regarding reports that include criminal conduct allegations, and coordinates services to achieve and maintain permanency on behalf of children in the child welfare system.

• Children and Family Supports Contract Increase:
  • Amount: $5,500,000
  • Purpose: To enhance contracts supporting children and family services, improving service quality and availability.
• Permanent Guardianship Caseload Increase:
  • Amount: $4,288,700
  • Purpose: To address the increased caseload in permanent guardianship services.
• Healthy Families Expansion:
  • Amount: $2,500,000 (Funded with federal funds)
  • Purpose: Expansion of the Healthy Families program to support at-risk families and prevent child abuse and neglect
• Community-Based Child Abuse Prevention Grant State Match:
  • Amount: $264,400
  • Purpose: State match for federal community-based child abuse prevention grants.
• Kinship Care Line-Item Surplus:
  • Amount: $(4,226,600)
  • Impact: Reduction due to surplus in the kinship care line item.
• Foster Care Line-Item Surplus:
  • Amount: $(11,409,200)
  • Impact: Reduction due to surplus in the foster care line item.

Department of Health Services (DHS)

The Department of Health Services (DHS) is responsible for the provision of most public health programs not administered by the Arizona Health Care Cost Containment System (AHCCCS), the Arizona State Hospital (ASH), emergency medical services, state laboratory support, vital records maintenance, disease control, epidemiological monitoring, and radiation regulation.

• Nurse-Family Partnership Program:
  • Amount Decreased: $(2,500,000) Removal of one-time program funding
  • Purpose: Previously funded Nurse-Family Partnership programs which are home visiting programs pairing nurses with low-income, first-time mothers during pregnancy and the first 2 years of the children’s lives. Services included care coordination, case management, assessments and screenings, preventive education, referrals to health and human services, and job development resources​
• Newborn Screening Program:
  • Amount: $12,369,800
  • Purpose: Funds centralized testing of all newborns in the state for a standard set of 61 disorders. In FY 2023, the program provided screening for 78,801 newborns and follow-up counseling for the parents of affected newborns​​.
• High-Risk Perinatal Services:
  • Amount: $2,343,400
  • Purpose: Provides contracted transport services for high-risk perinatal care, hospital services, inpatient physician follow-up services, and community health nurse visits for newborns who spent at least 5 days in a neonatal intensive care unit. These visits aim to identify developmental issues and provide early intervention services to ensure school readiness by age 5.
• Counseling Services for Parents of Deceased Children:
  • Amount: $500,000
  • Purpose: To offer counseling services to parents who have lost children

Other Budget Items 

Arizona Department of Administration (ADOA)

• Early Literacy Funding:
  • Amount Decreased: FY24 $(250,000) Remove One-Time
  • Purpose: FY24 budget included a footnote specifying that the funding shall be distributed to a literacy program that places young adult role models in high-need preschool classrooms and childcare centers, where they deliver targeted early literacy interventions to children who may otherwise never have young adult role models.

Arizona Department of Education (ADE) 

Early Literacy Programs: 

• Amount: $17,380,000
• Purpose: To improve early literacy outcomes for young children, providing resources and support to enhance reading and literacy skills.

Arizona Health Care Cost Containment System (AHCCCS)

• KidsCare: 
  • Amount:  $32,052,500 ($28,847,000 *FF & $3,205,500 *GF)

Purpose: State funds allocated to supplement the federal funding for KidsCare, ensuring the program’s sustainability and reach.

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