Hobbs Announces Planned Reforms to Arizona’s School Voucher Program

But legislative Republicans say they’re not interested in making any changes aimed at accountability or transparency.

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Gov. Katie Hobbs is setting her sights on the state’s private school voucher program, announcing a plan Tuesday to reform the program’s oversight and eligibility, less than a week out from the start of the new legislative session.

“Arizonans deserve to know their money is being spent on educating students, not on handouts to unaccountable schools and unvetted vendors for luxury spending,” Hobbs said in a written statement announcing her voucher regulation agenda. “My plan is simple: every school receiving taxpayer dollars must have basic standards to show they’re keeping our students safe and giving Arizona children the education they deserve.”

Arizona’s private school voucher program, known formally as Empowerment Scholarship Accounts, has seen ballooning enrollment rates and costs since Republicans championed a universal expansion in 2022 that allows any student to receive a grant regardless of their public school history. The program, originally meant to benefit public school students attending failing schools or with special education needs, is projected to cost the state nearly $1 billion in the upcoming fiscal year, and is a driving factor in the state’s growing budget shortfall.

A year ago, Hobbs sought to completely repeal the universal portion of the voucher program in her first year as governor, but vehement opposition from Republican lawmakers meant the proposal went nowhere. Now, the Democrat’s strategy to address accountability issues within the program is an admission that scrapping the program is a nonstarter.

But this package of reforms may be just as dead on arrival in the Republican-controlled legislature as last year’s proposed repeal.

Under the plan, which Hobbs said will be part of her 2024 executive budget proposal, private schools who accept voucher money will be required to meet some of the same safety and educational standard requirements that public schools do.

For example, teachers at those private schools would be required to pass fingerprint background checks and meet minimum education requirements before teaching ESA students. And private schools would be responsible for providing accommodations and services to students with disabilities in accordance with their Individualized Learning Plans or Section 504 plans. Hobbs’ proposal also aims to empower the state auditor general to monitor and report on how ESA money is being spent in private schools, similar to how spending in public schools is monitored.

The voucher program has faced increasing criticism for facilitating luxury expenses, including ski passes and piano purchases. Hobbs’ plan seeks to eliminate such expenses by requiring review and manual approval of purchases greater than $500 to “ensure purchases are utilized for an academic purpose”.

In an emailed statement, Superintendent of Public Instruction Tom Horne, whose office oversees the ESA program, said that safeguard is already in place.

“My office already reviews all expense requests regardless of amount,” he said. “In 2023, we rejected several thousand ESA applications for lack of adequate documentation and suspended almost 2,200 accounts totaling $21 million because the student was enrolled in a public school. We’ve also rejected more than 12,000 ESA purchase order requests.”

Hobbs’ plan would also prevent price gouging by prohibiting private schools receiving ESA money from increasing tuition at a rate higher than inflation. And she wants to require the state education department to track absenteeism and graduation rates, and inform parents what parental and student rights are being given up when leaving the public school system.

While Hobbs stopped short of calling for a full repeal of the universal portion of the ESA program, her new plan would guarantee that voucher recipients have at least some public school history by requiring recipients to have attended a public school for at least 100 days before becoming eligible for a voucher. When the universal portion first went into effect in September of 2022, 75% of the new wave of applicants had never stepped foot in a public school and by June of 2023, about half of ESA recipients continued to be students with no public school history.

“The ESA program lacks accountability and transparency,” Hobbs said. “With this plan, we can keep students safe, protect taxpayer dollars, and give parents and students the information they need to make an informed choice about their education.”

Democratic lawmakers lauded Hobbs’ plan as a commonsense solution and denounced the Republican-led universal expansion for its deleterious impact on the state budget.

“With all the issues and pressing needs we have as a state, Republicans knew that an unaccountable subsidy for private schools was more than our taxpayers can afford,” said House Democratic Leader Lupe Contreras. “This plan provides common-sense guardrails and fiscal responsibility that this program — that any taxpayer-funded program — should have.”

“The Republican expansion of government to universal ESA vouchers has put our state’s financial security at risk, and our students at risk without any safeguards,” echoed Senate Democratic Leader Mitzi Epstein. “These safeguard policies are common sense and vitally important to help children learn and to keep children safe.”

But legislative Republicans, who hold a majority in each chamber, threw cold water on Hobbs’ proposed reforms.

“Empowerment Scholarship Accounts are wildly popular with Arizona parents because they leverage private sector solutions to offer the best educational opportunities for their children,” said House Speaker Ben Toma, a Peoria Republican who sponsored the universal expansion. “Meanwhile, Governor Hobbs and Democratic Party legislators now seek to strangle ESAs and private education with bureaucracy and regulation. I won’t allow that to happen.”

Senate Education Committee Chairman Ken Bennett, R-Prescott, said that while he would be open to addressing student safety and helping to protect students with disabilities, he is opposed to adding more hurdles for families seeking school choice.

“I do believe there are some common sense improvements that can be made to the program to ensure student safety, protect the rights of students with disabilities, and level the playing field between public, charter and private schools,” he said, in an emailed statement. “I’m looking forward to working with my colleagues this session to provide transparency and accountability, but we will not add layers of bureaucratic red tape, as some of the Governor’s proposals suggest, or discourage parents from participating in ESAs.”

Arizona Mirror is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Arizona Mirror maintains editorial independence. Contact Editor Jim Small for questions: info@azmirror.com. Follow Arizona Mirror on Facebook and Twitter.

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