Key Points: 

• Competing ballot measures propose reforms to ESA program

• Disputes center on eligibility, oversight and program administration

• Parents, advocates clash as scrutiny, misspending concerns grow

Dueling ballot measures from public school groups and school choice advocates are both angling to reform the Empowerment Scholarship Account program. 

The two proposals intersect on some broad policy points but differ in their approaches to eligibility and operation. And whatever the case, a sect of ESA parents stands ready to oppose any effort to regulate the program. 

All the while, a microscope stays fixed above the state’s school choice program. 

Audits and reviews return lists of noneducational and luxury items purchased with program dollars, while the attorney general mulls legal action in an ongoing public monies investigation into the Arizona Department of Education. 

“We welcome more people to this fight,” Marisol Garcia, president of the Arizona Education Association, said. “We can all agree now that waste, fraud and review abuse are rampant.” 

After a spike in enrollment with universal expansion, a now $1 billion price tag and unanswered calls for legislative reform, the Arizona Education Association and Save Our Schools Arizona introduced the Protect Education Act. 

Key provisions include a $150,000 income cap, fingerprint cards for tutors, private school teachers and service providers, mandated testing or accreditation for ESA-funded schools, bans on purchasing noneducational and luxury items and a provision directing 90% of unspent ESA funds to public schools. 

The proposal largely applies to students enrolled under universal eligibility and exempts students with disabilities from the income cap and testing requirement.

The Arizona Education Association and Save Our Schools Arizona finalized the language with the Arizona Legislative Council and officially filed it on March 11. 

Less than a week later, a new political action committee, Fortify AZ, filed a second ballot measure aiming at ESA reform. They have been backed by a major national school choice advocacy group, the American Federation for Children. 

Tommy Schultz, chief operating officer of the American Federation for Children, claimed the initiative from AEA and SOSAZ would “gut school choice,” while the alternate ballot initiative would make the program “durable for generations to come.” 

The proposal, dubbed the Arizona Empowerment Scholarship Accounts Reform and Accountability Act, aligns with some provisions in the Protect Education Act. For one, the measure requires fingerprint clearance cards for tutors and service providers who spend unsupervised time with children. 

On the education front, it requires an “approved examination” for students enrolled in a private school and those learning at home or in alternative education settings.

It prohibits the purchase of noneducational and luxury items, permanently bans accountholders who defraud the program and requires a quarterly report on vendor payments, disqualifications and recovered funds to the attorney general.

Unlike the Protect Education Act, the measure includes no income cap, does not direct unspent ESA funds to public schools and adds some novel provisions on curriculum and operation and administration of the program. 

Under the act, the Arizona Department of Education would be required to maintain a list of approved curricula and supplemental material.

And, finally, it adds a requirement for an online marketplace payment system to centralize all expenditures in the ESA program, with specific mandatory functions like fraud detection. 

The last provision comes as the state’s contract with current ESA financial vendor ClassWallet comes closer to an end. The company initially won the state’s contract to run the program in 2019, and again in 2023. Per the latest agreement with the state, ClassWallet would operate for three years, with two opportunities to extend the contract by a year. 

Ahead of its lapse, state Treasurer Kimberly Yee put out a request for information, opening the door for new vendors to submit proposals. 

“The goal of this RFI is to identify the platform best suited to serve the 102,000 Arizona families currently benefiting from one of the nation’s premier ESA programs,” Yee said in a statement. “If there is a financial platform, or updates to the current platform that can provide families ESA program funds efficiently and identify any misspending or misuse, then Arizona taxpayers deserve to use that system.”

Her office clarified ClassWallet would be able to fully participate in the request for information and request for proposal process. 

As the state mulls vendors, the new ballot measure is still subject to a 30-day legislative council review before finalized language can be presented to voters in a petition. 

“Staying on the sidelines is not an option as one of America’s oldest school choice programs faces an existential threat – we are taking the fight to the unions’ turf and, more importantly, to the voters who are clearly on our side,” Schultz said. “We will do what it takes to bring this critical measure to the ballot.”

Garcia took the rival ballot measure in stride. 

“It is clear nationally, we are an embarrassment that a billion dollars is being spent on things that do not educate our communities,” Garcia said. “We are excited that more people want to join this fight, and we’re excited to make the table bigger and have broader conversations about the waste, fraud and abuse of this program.”

The Protect Education, Accountability Now committee as a whole, though, seems a tad skeptical at the outset. 

In a statement, the committee said, “We’re still analyzing this proposal, but it appears to be missing some key reforms that are necessary to prevent out-of-control spending. We welcome all the voices joining our call for common-sense reforms to Arizona’s billion-dollar voucher mess.”

It continues, “Unfortunately, given the reporting that this initiative is backed by a well-funded national special interest pro-voucher group, this does not appear to be a genuine push for voucher reform.”

Meanwhile, AZ Loves ESA, the political action committee originally formed to oppose the Protect Education Act, plans to grow its network to oppose both efforts. 

“We will oppose all ballot measures that attempt to regulate or restrict our current wildly successful and incredibly accountable ESA program,” chair Jenny Clark said.