Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program
- Tax-Credit Scholarship
- Enacted 2009
- Launched 2009
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. Depending on eligibility, students are able to receive more than one scholarship from STOs in a given year. Learn more about how the program works on this page, including eligibility, funding, regulations and more.
We do not administer this program.
Scholarships Awarded (2019–20)
of Students Eligible Statewide
Participating Schools (2019–20)
Scholarship Organizations Awarding Scholarships (2019–20)
Average Scholarship Value (2019–20)
Value as a Percentage of Public School Per-student Spending
Arizona’s Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program Participation
STOs may award scholarships 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. The total credits claimed cannot exceed $6 million in a given year.
Students are eligible if they (1) have a Multidisciplinary Evaluation Team (MET) or Individualized Education Plan from an Arizona public school district, (2) have a 504 plan from an Arizona public school district or (3) are now or have ever been in the Arizona foster care system.
EdChoice Expert Feedback
Arizona’s tax-credit scholarship program for disabled and displaced students helps thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.
Students with special needs and foster kids are eligible to receive a tax-credit scholarship. Slightly more than 10 percent of Arizona students are eligible to receive a scholarship via this program, and all students are eligible to receive a scholarship via the individual-donor scholarship program. Statewide, less than 10 percent of students participate in one of Arizona’s private educational choice options (including the universal-eligibility Original Individual-Donor Tax-Credit Scholarship Program, the Low-Income Corporate-Donor Tax-Credit Scholarship Program, “Switcher” Tax-Credit Scholarship Program, and the Empowerment Scholarship Account Program). This is the highest EdChoice share in the nation.
The average scholarship size is about $5,000, which is about 59 percent of the average expenditure per student at Arizona’s district schools. There is no cap on scholarship values and students may receive more than one scholarship. Students from low-income families and those who have switched from the public school system can also receive scholarships via the other tax-credit scholarship programs in addition to the original scholarship program that is available to all students. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, but only $6 million in tax credits are available annually, which is equivalent to only 0.06% of Arizona’s total K–12 revenue.
In order to expand access to educational choice, Arizona policymakers should significantly increase the amount of available tax credits.
Arizona’s scholarship program generally avoids unnecessary and counterproductive regulations.
Rules and Regulations
- Income Limit: None
- Prior Year Public School Requirement: None
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: 90 percent State Funding
- Testing Mandates: None
- Credit Value: 100 percent
- Per Donor Credit Cap: None
- Total Tax Credit Cap: $6 million
- *Limited to students with special needs and students in foster care
- Use at least 90 percent of contributions for scholarships
- Make scholarships available for more than one school
- Allow the state to verify that scholarships have been awarded to students attending a qualified school
- Annually report to the state: Data on accepted contributions, grants awarded, and the amount of money being held for identified student scholarships in future years
- a list of participating schools with the number and dollar amount of scholarship awards received
- the salary of the STO’s top three officials for the fiscal year and proof of independent review of financial statements by a certified public accountant
No legal challenges have been filed against the program.
Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program State Groups
That Support School Choice
Love Your School is a great resource for Arizona families looking for the best schooling options for their children. They also share the latest happenings in AZ education, families’ personal stories and more.
Empowered Arizona Families exists to give a public voice to families that utilize the Empowerment Scholarship Account program in Arizona. This organization is operated by ESA families, for ESA families.
Arizona’s Association of School Tuition Organizations (ASTOA) is the only membership organization that works solely on behalf of and provides a unified voice for Arizona’s school tuition organizations (STOs).
The Arizona Department of Revenue has approved this list of school tuition organizations to receive donations through the state’s tax-credit scholarship programs. These organizations provide private school scholarships to eligible students.