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
936 participating students (2015–16)
12 percent of students eligible statewide
148 participating schools (2015–16)
14 scholarship organizations awarding scholarships (2015–16)
Average scholarship value: $4,696 (2015–16)
Value as a percentage of public school per-student spending: 63 percent
Arizona allows corporations, including stockholders of S-Corporations, to receive tax credits for donating to school tuition organizations (STOs), nonprofits that provide private school scholarships to children with special needs and students who are currently, or have ever been, part of the Arizona foster care system.
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. Individual STOs have discretion to award scholarships of less than the allowed amount.
The total credits claimed cannot exceed $5 million in a given year.
Students are eligible if they (1) have a Multidisciplinary Evaluation Team (MET) or Individualized Education Plan (IEP) from an Arizona public school, (2) have a 504 plan from an Arizona public school or (3) are now or have ever been in the Arizona foster care system.
For Lexie’s Law to improve, lawmakers should increase the $5 million cap on tax credits available to donors. 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. The program avoids unnecessary regulations on participating private schools such as admissions or testing requirements.
Ariz. Rev. Stat. §§ 15-891; 43-1184; 43-1501 through 1507; and 20-224.07
No legal challenges have been filed against the program.
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