Arizona Governor Katie Hobbs Under Fire as $339 Million “Disappears” from State Budget Amid Controversy and Resignations

Arizona Governor Katie Hobbs Under Fire as $339 Million “Disappears” from State Budget Amid Controversy and Resignations Published: February 1, 2025

Arizona’s Democrat Governor Katie Hobbs is facing intense scrutiny after a shocking revelation that $339 million has mysteriously “disappeared” from the state’s budget. The controversy comes on the heels of her budget director’s unexpected resignation, which many are questioning amid the growing allegations of mismanagement.

State Representative Alex Kolodin, a strong critic of Hobbs' administration, took action by sending a letter to her office Thursday, demanding answers about the missing funds. He told The Gateway Pundit, “Maybe somebody’s siphoning off some funds. Maybe it’s a mistake. Who knows? But it doesn’t add up.” Kolodin’s concerns follow a pattern of troubling decisions under Hobbs, including her acceptance of large donations to a dark money group linked to her 2023 inauguration, which seemingly influenced state contract decisions. Notably, Hobbs received $400,000 from a company that later profited immensely from state contracts.

Even former Arizona Attorney General Terry Goddard, a fellow Democrat, has joined the call for a law enforcement investigation into the matter. Both the Democrat Attorney General and the Republican Maricopa County Attorney have opened probes into possible corruption or quid pro quo schemes.

This is not the first time Hobbs has faced questions over fiscal mismanagement. As The Gateway Pundit reported in November, Hobbs’ Office of Tourism awarded a $700,000 contract for a new state logo to a company with close ties to the agency’s director—an issue that raised eyebrows across the state. Much of the controversy centers on Hobbs’ unilateral decision to expand the Arizona Health Care Cost Containment System (AHCCCS), a Medicaid agency, without consulting the legislature during budget negotiations. Kolodin is furious that this expansion was not included in the state budget, and he points to the recent resignation of Hobbs’ budget director as further evidence of potential cover-ups. “Somebody had to take the fall,” Kolodin remarked.

Kolodin, who has been vocal about Hobbs’ handling of the state budget, has expressed concern over whether her administration is capable of competently managing state funds. He questions whether the issues at hand stem from incompetence or something more nefarious. "From talking to colleagues and staff about this year’s budget process, it’s clear that there’s a fine line between malice and incompetence when it comes to Hobbs' administration and its ability to negotiate a budget with us," he said.

Kolodin has raised several critical questions for the governor: Why did Hobbs mislead the legislature about her intentions for state spending? Why did her budget team refuse to properly account for known costs? And perhaps most concerning of all, "Who in your orbit is profiting off Arizona’s children?"

The situation surrounding the AHCCCS expansion has sparked particular outrage. Kolodin explains that Hobbs’ draft budget did not mention the expansion, and the legislature was never informed about the plan. Yet, after the budget passed, the governor moved forward with the expansion, pulling significant funds from the state treasury. “That siphoned off a whole bunch of money that was supposed to go to other things,” Kolodin said.

In light of these revelations, Kolodin is pushing for a formal investigation into the matter, urging a legislative committee to step up and hold Hobbs accountable for her administration’s handling of state finances. "It’s probably time for at least a first step in a more formal investigation," Kolodin emphasized, pointing to the pressing need for transparency in how the state’s budget is managed under Hobbs' leadership.

As the controversy continues to unfold, the pressure on Governor Hobbs to provide answers grows. With millions of dollars unaccounted for and a string of questionable decisions, Arizonans are left wondering just how much more could be at stake.