Arizona drops regulation of school choice in settlement

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(The Center Square) - Arizona Attorney General Kris Mayes has withdrawn a policy requiring families using the state's school choice program to document every purchase made for “general educational supplemental materials.”

The policy removal comes as Mayes, the Goldwater Institute and the Arizona Department of Education reached an agreement on a settlement in a lawsuit that is being dismissed with prejudice.

The Goldwater Institute filed the lawsuit in 2024 on behalf of families using Empowerment Scholarship Accounts, challenging the policy. Under the ESA program, the money that would have paid for a student's education in a neighborhood public school follows the student to another school of the parents' choice. That includes home schooling.

Jon Riches, an attorney for the Goldwater Institute, told The Center Square on Tuesday that the Phoenix-based nonprofit is “glad to see a settlement that helps restore what the law requires and makes the ESA program as easy as possible for parents and their kids.”

The attorney said Arizona’s school choice program is “structured to make education work for parents and their families. The attorney general’s demand did the opposite. It made it difficult and cumbersome.”

Richie Taylor, communications director for Mayes’ office, said the Democratic attorney general “approved this settlement agreement to stop wasting taxpayer dollars on this lawsuit.”

The Arizona Department of Education “agreed to implement two new processes to assess whether supplementary material purchases are allowable," Taylor told The Center Square, answering questions by email.

 “First, ESA holders must attest that any supplementary materials purchased are for use by the qualified student associated with the account used to make the purchase," he explained. "Second, ESA holders must identify the curriculum or course of study that the supplementary materials will support at the time of purchase."

“ESA holders who purchase supplementary materials using ESA funds must demonstrate that the materials support a curriculum being studied by the specific student associated with the ESA used to make the purchase. That isn't a controversial proposition,” Taylor said.

Taylor also said the settlement allows the state Department of Education to request additional documentation from ESA parents to support purchases of supplementary materials.

“These are important steps toward holding ESA parents accountable for their use of education tax dollars,” he added.

Under the settlement, families who use the school choice program will, when they submit their reimbursements, have to “click a checkbox that they are in fact qualified ESA families and the materials will in fact support their course of study," Riches said.

ESA families will now have an easier time getting the “materials they need to educate their children,” the attorney noted.

When Mayes implemented the policy in 2024, Riches said, it “made it more difficult for ESA families to make simple and obvious purchases to support the education of their kids.”

“Whether it was pencils or books, her demands made it more difficult for those families to get reimbursed for those expenses,” he said.

Superintendent of Public Instruction Tom Horne told The Center Square on Tuesday that Mayes’ original demand was “ridiculous.”

He said it was not an additional burden for the Arizona Department of Education, but it was for ESA parents.

Even though he disagreed with the policy decision, Horne, a Republican, said he could not “refuse an order of the attorney general until a court” says he can.

Now that Mayes has rescinded this requirement, the ESA program will function as it was originally intended, Riches noted.

According to Horne, the state Department of Education attempts to “limit the documentation to whatever is needed to be sure everything is a valid education expense at a reasonable cost.”

Horne said the department has a staffing shortage, noting it still has the same number of staff as when the program had 11,000 students, but now it has over 100,000 students.

The department has “eight people to examine two million requests a year, which is a quarter of a million per person, which is humanly impossible,” Horne said.

Due to the staff shortage, the Arizona Legislature passed the risk-based auditing policy in 2024 for ESA accounts.

Before the policy, families using ESA accounts were not reimbursed between two and six months, Horne said.

The superintendent of public instruction said the Arizona Department of Education has asked the Legislature for an additional $4 million to deal with the staff shortage.

At the end of the session, Horne said, an agreement was in place in the Legislature as part of a larger education package that would have provided the state Department of Education with the requested funds, but the deal fell apart.

Horne said his department will ask for a special appropriation for these funds in January 2027.