Arizona was the first state to enact an education savings account program, the newest school choice mechanism. The passage and launch of the Empowerment Scholarship Accounts program in 2011 opened the door to new learning opportunities for students with special needs and circumstances. Learn more about how the program works on this page, including eligibility, funding, regulations and more.
Arizona was the first state to enact an education savings account, the newest type of school choice program. The passage and launch of the Empowerment Scholarship Accounts program in 2011 opened the door to new learning opportunities for students with special needs and circumstances. Learn more about how the program works on this page, including eligibility, funding, regulations and more.
Students in households that earn up to 250 percent of poverty ($64,375 for a family of four in 2019–20) will receive ESAs funded at 100 percent of the base for whichever school type the student previously attended (charter or district). For all other students, ESAs are funded at 90 percent of the same per-student base funding. ESAs were worth about $5,600 for students who do not have special needs in 2016–17. Students with special needs receive additional funding, and those amounts vary depending on the services the student’s disability requires. Because nearly six in 10 ESA students have special needs, the average ESA in 2018–19 was $12,808.
ESA funds are deposited on debit cards for parents quarterly to be used for qualified educational purchases. Theprogram currently has a cap on enrollment growth of about 5,000 additional students per year. Beginning in 2019–20, there will be no total cap on the number of accounts approved.
Students must have previously attended public school for at least 100 days of the prior fiscal year and met one of the following characteristics: (1) received a scholarship from a school tuition organization (STO) under Lexie’s Law, (2) attended a “D” or “F” letter-grade school or school district, (3) been adopted from the state’s foster care system, (4) is already an ESA recipient or (5) live on a Native American reservation. Students eligible to attend kindergarten are also eligible provided they meet one of the above criteria. Additionally, children of active-duty military members stationed in Arizona, children whose parents were killed in the line of duty, children of parents who are legally blind, deaf or hard of hearing, and siblings of current or previous ESA recipients are also eligible. Children of active-duty members of the military or whose parents were killed in the line of duty are not required to attend a public school prior to applying for an ESA. Finally, preschool children with special needs are also eligible and are not required to have attended a public preschool program prior to applying.
Arizona’s ESA program is relatively strong on its funding power, as 90 percent of the charter or district school per-student base funding amount is deposited in each participant’s ESA. Arizona’s ESA program also excels in that it avoids unnecessary regulations and empowers families to hold education providers accountable. ESA-using parents must sign an agreement to provide an education that includes reading and grammar, math, social studies and science, and participating private schools or service providers must not discriminate.
Arizona could improve its ESA by expanding it to serve all students. Additionally, the requirement for most students to first be enrolled in a public school for 100 days of the prior school year sets an arbitrary limit that may inhibit a parent’s choice of education for at least one school year.
Finally, the program’s implementation has often left much to be desired. Policymakers could improve the implementation of the program—making it easier for families to use and raising the level of financial accountability—by following Florida’s lead and outsourcing the administration to third-parties that have greater expertise managing large numbers of flexible spending accounts. The relevant government agency would then provide oversight rather than attempt to administer the program directly.
Parent must sign an agreement to:
Ariz. Rev. Stat. §§ 15-2401 through 2404
On March 21, 2014, the Arizona Supreme Court declined to review a Court of Appeals’ ruling upholding the state’s education savings accounts (ESA) program. The Arizona Court of Appeals ruled that ESAs are neutral toward religion. Also, although a prior 2009 decision by the Arizona Supreme Court in Cain v. Horne, 202 P.3d 1178 (Ariz. 2009) (en banc) found vouchers to be unconstitutional in Arizona, the appellate court distinguished ESAs, said they did not violate the state constitution because funding can be used for a variety of educational resources in addition to private school tuition. Niehaus v. Huppenthal, 310 P.3d 983 (Ariz. App. 2013).
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