The Arizona legislature enacted “Lexie’s Law” in 2009. The program, a tax-credit scholarship for students with special needs, launched in the same year. Learn more about how the program works on this page, including eligibility, funding, regulations, and more.
America’s first tax-credit scholarship program for students with special needs
349 participating students (2013–14)
12 percent of students eligible statewide
91 participating schools (2013–14)
8 scholarship organizations awarding scholarships (2013–14)
Average scholarship value: $4,648 (2013–14)
Value as a percentage of public school per-student spending: 64 percent
Arizona offers tax credits to businesses and stockholders supporting School Tuition Organizations (STOs), nonprofits that provide private school scholarships to students with special needs and those in foster care.
Scholarship amounts may be awarded up to the lesser of the private school tuition or 90 percent of the state funding that otherwise would go to that pupil had he or she remained in public school. That amount varies depending on the services the student’s disability requires. Individual STOs have discretion to award scholarships of less than the allowed amount.
The total credits claimed by businesses and stockholders of S-Corporations cannot exceed $5 million in a given year.
Students are eligible if they have been identified by a school district as having a disability under the Individuals with Disabilities Education Act or Section 504 of the Rehabilitation Act, or if they are now, or have ever been, in the Arizona foster care system. Students must also either be an enrollee in a kindergarten or prekindergarten private school program for students with disabilities, a public school student for the prior semester of the current school year or at least 90 days in the previous year, or a dependent of an active-duty member of the military stationed in Arizona.
For Lexie’s Law to improve, the $5 million cap on tax credits available to donors should be increased. As for funding power, the possibility of receiving 90 percent of state funding is generous; however, the actual average scholarship amount is far less than per-pupil funding in Arizona public schools for all students, not even taking into account the larger amounts usually spent to serve students with special needs. Additionally, the public school attendance requirement prohibits newly diagnosed private school students from accessing scholarships without first un-enrolling from their private school and spending at least 90 days in public school. The program is strong in that it places no special admissions or testing requirements on participating private schools.
Ariz. Rev. Stat. §§ 15-891; 43-1184; 43-1501 through 1507; and 20-224.07
No legal challenges have been filed against the program.