By Jason Bedrick |

Arizona lawmakers may soon be summoned back to the Capitol for a special session to consider a “grand bargain” on Empowerment Scholarship Accounts (ESAs). If so, they should put the interests of ESA families first.

Under one version of the deal, the Arizona Education Association (AEA) and its allies would drop their ballot initiative restricting ESAs. In exchange, the legislature would abandon three measures it referred to the ballot this session — protections for military families’ scholarships, payroll reform for teachers’ unions, and a mandate that districts spend 60 percent of their budgets on instruction — and would enact most of the ESA provisions debated this session in House Bill 2142. (There’s one important exception: the unnecessary testing mandate would be dropped.)

A much better deal, proposed by Republican gubernatorial candidate Andy Biggs, would offer “one for one,” with the legislature dropping the payroll ballot measure in return for the AEA dropping its ballot measure. The legislative GOP caucus is behind the Biggs deal—the question is just how desperate the AEA is to avoid going to the ballot. But if the “grand bargain” requires some reforms to the ESA program, legislators should hold out for a better deal than the original proposal.

The AEA-backed initiative is not a modest accountability measure; it is a serious threat to the ESA program, imposing a host of harmful regulations, including a restrictive income cap that would kick tens of thousands of students off the program, blocking parents from buying basic school supplies, and confiscating funds that families had saved for their children’s education. If Democrats balk at the Biggs proposal, trading away three referred measures and a handful of program restrictions to make that threat disappear is a defensible trade.

But as Arizona’s ESA defenders take yes for an answer, they should be honest about what they’re doing and minimize harm to ESA families. The HB2142-based “grand bargain” is not, as the American Federation for Children (AFC) has suggested, a set of “commonsense reforms” that simply tidy up the program. It is a series of concessions — real costs imposed on real families — that ESA supporters are accepting because the alternative is worse. Calling it “commonsense” or a “fix” obscures this. It allows the organization to claim credit for “saving” the ESA program without ever having to explain to the families of more than 100,000 students who rely on it what its own proposed changes will actually do to their accounts.

In the wake of the HB2142-based proposal, I solicited feedback about it on a social network page for ESA families. I received nearly 400 comments from ESA parents who overwhelmingly opposed the proposed regulations. They explained in detail how the supposedly “commonsense” restrictions would hamper their ability to provide their children with an education that works best for them.

Here is what the three central provisions of the HB2142-based proposal would actually do — and why each of them, even if ultimately worth swallowing in some form, makes the program worse for the families it serves.

Capping Rollover Funds

A key feature of ESAs that distinguishes them from a traditional voucher is that families can save unspent funds from year to year rather than being forced to spend a lump sum on a single school by a single deadline. This matters because families spend their own money more efficiently than bureaucrats spend other people’s money. The ability to save and re-deploy funds gives families both the incentive to economize and the flexibility to plan for expenses that don’t arrive on a tidy nine-month school-year schedule. A voucher must be spent now, at one school, or it will be lost. ESA funds can be banked for next year’s therapy bill, a multi-year curriculum purchase, or a future tuition increase.

The deal under discussion would cap how much families can carry forward — $50,000 for students with disabilities, $24,000 for everyone else — with the excess confiscated and deposited into the state general fund each year. That won’t matter for most families who spend close to their full allotment annually. But for the families who most need the flexibility ESAs were designed to provide, particularly families of students with special needs, it will be a bitter pill to swallow.

Families saving toward a multi-year placement at a specialized school, parents stockpiling funds for a major piece of assistive technology, or families anticipating a more expensive placement as a child with a disability ages into more intensive services — these are exactly the families a cap punishes.

The rollover cap is a “solution” in search of a problem. The rollover cap creates a perverse “use it or lose it” incentive that won’t save money; it will only encourage wasteful spending. If lawmakers proceed with a cap, the least they should do is exempt students with disabilities entirely. The case for forced spend-down is weakest exactly where the case for flexibility is strongest: students whose educational and therapeutic needs are least predictable and most expensive over time.

Fingerprinting Mandate

The deal would require fingerprint clearance cards — the same background-check credential used for school district and charter school employees — for individuals providing tutoring or teaching services paid for with ESA funds, as well as for staff at qualified private schools. For an institution — a school, a learning center, a tutoring company with a storefront and rotating staff — this is a reasonable extension of an existing framework, as schools are already required to fingerprint their teachers.

But the bill does not stop at institutions. As drafted, it would also sweep in independent tutors — the retired teacher down the street who tutors a handful of children at a family’s kitchen table, the local college student who helps with algebra twice a week. This is a fundamentally different relationship from a teacher supervising a classroom of other people’s children at an institution. A tutor working in a family’s own home, under that family’s direct supervision and invited in by that family’s own judgment, is not analogous to a stranger left alone with a building full of students.

Parents already vet who comes into their homes; that is what parental choice means. Mandating a state-administered background-check bureaucracy on top of that judgment does not make children safer — it makes it harder and more expensive to find a tutor at all, particularly in the specialized subjects and therapeutic disciplines where the pool of qualified providers is already thin.

The fix here is narrow and obvious: limit the fingerprinting requirement to qualified schools and institutional tutoring providers, and exempt individual tutors providing services in a student’s own home. That preserves the child-safety rationale where it actually applies — institutional settings with unsupervised access to multiple children — without taxing the much more common, much more easily supervised arrangement of one family hiring one tutor.

Spending Restrictions

The deal under consideration also adds a long, explicit list of disallowed expenses. Most of this list is theater. Jewelry, lingerie, hot tubs, bounce houses, and gift cards were never allowable ESA expenses in the first place. Codifying their prohibition changes nothing about what families can actually buy. It exists to give legislators something to point to — a list that sounds tough — rather than to solve an actual problem in the program. That is itself a tell about how this provision came to be.

But a few items on the list are genuinely new restrictions, and those deserve scrutiny on the merits. Barring out-of-state and international museums and excursions, for instance, would forbid spending ESA funds on precisely the kind of experiential, field-based learning that homeschooling and hybrid-schooling families have used for years — a trip to a Civil War battlefield, a national museum in Washington, D.C., a language-immersion excursion across the border. These are not luxuries dressed up as education — for many families building a curriculum outside a traditional classroom, they are the curriculum. Banning them doesn’t close a loophole. It closes off a category of legitimate, well-documented educational practice that happens to be easy to caricature in a press release.

Hotel stays, meals, plane tickets and other travel expenses are already properly forbidden, but there’s no good reason to prevent families from purchasing tickets to a museum outside Arizona that would be allowed if it were in Arizona. Any grand bargain should restore legitimate educational purchases to the allowable-uses list.

Why AFC Is Getting This Wrong

None of these three provisions emerged from a serious conversation with ESA families about what they need. They emerged from a desire to manage headlines. Rather than designing ESA policy in the best interests of ESA families, AFC’s strategy would let school-choice opponents dictate the policy agenda. Chief among them is school-choice opponent Craig Harris at Channel 12, who has spent the better part of a year manufacturing alarm about ESA account balances and fraud rates that bear little resemblance to reality. The Arizona Department of Education has confirmed that flagged fraudulent or egregious spending amounts to roughly 0.3 percent of total ESA spending — a rate that would be the envy of nearly any government program. Harris has claimed fraud rates many times higher, and signature gatherers for the AEA-backed and AFC-backed ballot campaigns alike have been caught on camera spreading those falsehoods to voters.

The right response to false claims is to correct them. Instead, AFC has chosen to give ESA opponents a say in how to regulate the program — an approach that has repeatedly proven disastrous for ESA families. Instead of proposing rollover caps because Harris made an issue of high account balances, school-choice proponents should explain to Arizona voters why families save those balances in the first place — often precisely because they have a child with disabilities whose needs are expensive and unpredictable.

AFC’s approach sets a dangerous precedent: when an activist-journalist manufactures a talking point, AFC’s policy response is to regulate around it rather than to defend the program based on the facts.

Arizona’s ESA families were not asked whether they would trade their ability to save for a child’s future needs, or their ability to hire a trusted neighbor as a tutor, for a quieter news cycle. They deserve a coalition that designs policy around what actually serves them — not one that lets their loudest opponents write the rules by proxy, then dresses up the result as “commonsense.”

The next time AFC or any other organization in this space asks Arizona families to accept a “commonsense reform,” someone should ask the obvious question: commonsense according to whom, and at whose expense? If the goal is just to keep Craig Harris’s headlines at bay, it’s a fool’s errand — he and his ilk will continue manufacturing anti-ESA headlines so long as there’s an ESA program.

“Avoiding bad headlines” is not a serious approach to policymaking and certainly not in the interests of ESA families. Arizona’s ESA families deserve better.

Consider the Deal — With Open Eyes

None of this is an argument against the special-session deal. The AEA-backed initiative would do far more damage to far more families than a rollover cap or a fingerprinting mandate ever could, and trading three referred ballot measures plus some unnecessary or even harmful ESA restrictions to take that threat off the table is a trade worth considering. Dropping the testing mandate from the deal is itself a meaningful win, preserving the central insight of school choice: families, not state-mandated exams, are the accountability mechanism.

Taking the HB2142-based deal might be a necessary evil, but it’s certainly not a victory. At best, it would be a retreat to a more politically defensible position, not a “commonsense” fix or policy advance. If there is a special session, lawmakers who support the ESA should do everything in their power to minimize the harm to ESA families. That would entail supporting the Biggs proposal or, at the very least, holding out for revisions to HB2142 that seriously consider the impact on ESA families.

Jason Bedrick is a Senior Research Fellow at The Heritage Foundation’s Center for Education Policy.