Arizona Senate President Pro Tem T.J. Shope is requesting updates from state prosecutors following the release of internal documents that raise questions about a rate increase approved for a group home provider that has donated to Governor Katie Hobbs' campaigns.
The issue centers on a 30% rate hike given to Sunshine Residential Homes by the Department of Child Safety (DCS). Records show the company has been a significant donor to Hobbs and Democratic political organizations.
According to internal messages, DCS employees expressed concerns about the provider's political connections. Staff members noted Sunshine Residential's relationship with the governor and described the situation as putting state leadership in an "uncomfortable position" due to the company's political contributions.
"These revelations are deeply disturbing," Shope said. "When senior agency officials feel pressured because a provider has given hundreds of thousands of dollars to the Governor, and that provider then threatens to pull critical beds unless it gets a massive rate increase, the integrity of government decision-making is called into question."
The Documents
Sunshine Residential told DCS it would move its services to the federal system unless it received a substantial rate increase. Agency leadership approved the increase despite staff warnings that it would add to a projected $13 million budget shortfall.
The company cited financial losses to support its request, but financial records show $440,000 in operating income. Additional outside accounting experts noted the reported deficit did not match the company's actual economic performance.
In a letter sent to Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell, Shope requested confirmation that investigations into potential improper influence are ongoing and status updates.
"This is not a partisan issue – it's a public trust issue," Shope said. "If political donations influenced decisions inside DCS, especially decisions involving vulnerable children, that is unacceptable. We intend to get to the bottom of this. Arizonans must be confident that their state government is not for sale."
