Former Arizona Governor Doug Ducey sharply rebuked Gov. Katie Hobbs’ announcement of her 2026 reelection campaign, accusing her of fiscal mismanagement that turned a $2.5 billion surplus into a $1.4 billion deficit.
Hobbs launched her bid for a second term on Wednesday in a two-minute video posted to X, where she emphasized her administration’s focus on education, public safety, and housing affordability.
“Arizona is a place of hard work, hope and determination,” Hobbs said. “That’s why I’m running for reelection — to continue putting your family first.”
Ducey, a Republican who preceded Hobbs in office, responded hours later on X, quoting Hobbs’ video and writing: “This dishonesty isn’t surprising given the current struggles on the 9th floor. When I left office, I turned over a $2.5B SURPLUS to Katie Hobbs. She blew it all AND created that $1.4B deficit in only a year. AZ didn’t have a revenue problem, Hobbs had a spending problem.”
This dishonesty isn’t surprising given the current struggles on the 9th floor.
When I left office, I turned over a $2.5B SURPLUS to Katie Hobbs. She blew it all AND created that $1.4B deficit in only a year. AZ didn’t have a revenue problem, Hobbs had a spending problem. https://t.co/VXpovqDp2M
The exchange between the former and current governors highlights Arizona’s ongoing budget tensions. Hobbs inherited the surplus from Ducey in January 2023, but the state faced a projected $1.4 billion shortfall for fiscal year 2025. According to a report from the Common Sense Institute of Arizona (CSI), that shortfall was mainly driven by increased spending and not the state’s adoption of a flat income tax rate of 2.5% or the Empowerment Scholarship Account (ESA) program.
A new report from CSI sets the record straight on Arizona’s budget—and takes aim at the myths surrounding the 2.5% flat tax.
FICTION: The flat tax caused Arizona’s budget deficit. FACT: Since adopting the flat tax, Arizona’s General Fund revenues grew by $3.3 billion—but at its… pic.twitter.com/UvYV0tLsNX
— Common Sense Institute Arizona (@CSInstituteAZ) June 13, 2025
The GOP-led Arizona legislature approved a $16.1 billion budget in June 2024, following a major budget battle that addressed the deficit by incorporating spending cuts and one-time adjustments. Hobbs signed the measure, though Republican critics, including House Speaker Ben Toma, have described her fiscal approach as unsustainable.
Reactions to Ducey’s post were polarized. A few users defended Hobbs, claiming Ducey’s tax cuts and ESA expansions as root causes of the shortfall. Others echoed his criticisms. A few, urged Ducey to support GOP challengers in the 2026 gubernatorial race, like U.S. Rep. Andy Biggs. The vast majority offered critiques of the former Governor.
A new report on Arizona’s Empowerment Scholarship Account (ESA) from the Common Sense Institute (CSI) shows a robust jump in ESA enrollment of nearly 15,000 students since last year.
According to the detailed report, the school choice program has reached a milestone with 92,362 students enrolled as of September 15, 2025. Projections indicate that ESA numbers will reach 103,000 this fiscal year.
The report from CSI is released on a quarterly basis to address “a lack of reliable and consistent data about who is using the program and how.” CSI noted, “Applying scrutiny to hundreds of thousands of individual transactions on an almost real-time basis has made the program vulnerable to exaggeration, misinformation, and mischaracterization. No comparable program is subject to this kind of examination.”
The quarterly findings indicate the program is maturing from an initial stage of rapid growth to a more steady-state. Universal eligibility, rolled out in 2022, has fueled the fire, but the real story now is “switchers”—57% of new enrollees ditching public schools for tailored options like private academies, therapies, or homeschooling setups. The report underscores how shrinking school-age cohorts (down 20,241 since 2021) aren’t slowing the momentum.
Glenn Farley, Director of Policy & Research at CSI and the report’s author, explained, “Arizona’s ESA program is reaching a point of steady participation. The rapid expansion is behind us, and future growth will be shaped more by broader demographic trends and the choices families make across an increasingly competitive K–12 landscape.”
The key questions that CSI seeks to address include the ultimate cost of the program at full expansion, the steady-state count of how many people are using the ESA program, its ultimate extent, the demographic characteristics of its users, and the efficiency and good operation of the program.
CSI found that total ESA costs are on track to reach $1.0369 billion in FY 2026, with an average award of $10,349 per student. Notably, 88% of funds have already been spent, the highest percentage ever recorded. Administrative approval rates are at a peak of 88.8%, and reimbursements are processed in just 13 days on average, with a whopping 455,142 orders handled in the last quarter alone.
As far as budgetary impact is concerned, a common complaint from opponents like Governor Katie Hobbs, the CSI projects that “state K–12 Basic State Aid costs will exceed appropriations by $35 million in FY 2026, due largely to higher ESA participation and lower-than-expected district enrollment.”
The report also offers a firm, authoritative rebuke to allegations that the program is most used by “the wealthy.”
“Nearly 57% of ESA recipients live in ZIP Codes with a median family income of between $75,000 and $150,000 – up slightly since our last report. A quarter of ESA users may be lower-income, 13% reside in rural areas, and nearly 20% are estimated to be nonwhite,” the report states.
Farley concluded the CSI report’s findings, writing, “Administrative reform throughout 2025 by the Department of Education has improved various high-level metrics: the Department is approving purchases faster and at greater volume and embracing its statutory authority (risk-based auditing, Handbook language noting use-tests for technology purchases and not limiting the purchases directly, etc.). However, the ESA environment often remains narrative rather than fact driven. We remind users: ESA enrollment costs are offset by reduced enrollment in other K-12 programs; ESA misuse rates are lower than comparable programs; ESA growth is slowing and increasingly driven by students switching from traditional public options.”
School bureaucrats who have mismanaged their finances are hoping that voters will blame a convenient scapegoat: families using Empowerment Scholarship Accounts (ESAs) to educate their children. As usual, their allies in the legacy media are trying hard to help them shift the blame—but the numbers don’t lie.
Channel 12 recently ran a story titled “Deer Valley teachers self-fund or rely on classroom wish lists for basics, while ESA parents buy luxury items with state tax dollars.” Most of the article reads like a press release from Deer Valley Unified School District Superintendent Curtis Finch, who claims that the ESA program has “zero accountability,” “no oversight,” and is “out of control.” Meanwhile, the article quotes teachers in Deer Valley who are spending hundreds of dollars from their own pockets to cover school supplies for their students.
The implication is clear: district schools are financially starved while ESA families waste money on frivolous luxuries. But the reality is exactly the opposite.
Misuse of the ESA program is vanishingly small. The Arizona Department of Education’s internal audit had turned up $622,000 in ESA funds that are “possible fraud or misuse.” That’s approximately 0.05% of total ESA spending over the past two years.
Misuse of funds in the ESA or any other public program must be detected, deterred, and punished. This is in fact happening in the ESA program, as the Arizona Department of Education had already found the misuse, suspended accounts of those responsible, and reports that it is “in the process of collecting more than $600,000” in improper spending. All of this makes the ESA program far more transparent and accountable than Arizona school districts, which do not post their purchases.
And while Deer Valley teachers may indeed purchase their own school supplies, it has nothing to do with the ESA program and everything to do with misplaced district priorities.
One of the oldest tricks in the school district advocate playbook involves pretending that teachers must buy their own classroom supplies because of a lack of funding. The Channel 12 story cites a Deer Valley biology teacher who said she “spends at least $500 of her own money every summer for her classroom.”
Days after the report aired, former Deer Valley school board candidate Tiffany Hawkins revealed that Deer Valley Unified had spent $560,407 to send students and staff on trips to Disneyland, Knott’s Berry Farm, Sea World, Universal Studios, and other destinations in Arizona, California, Hawaii, Indiana, and Texas. Apparently, the district leadership decided that these trips took precedence over classroom supplies for Deer Valley teachers.
Don’t hold your breath waiting for Channel 12 to cover that. Deer Valley Superintendent Finch—who recently faced charges of stonewalling public records requests and illegal electioneering on school grounds—attacked the ESA program for “out of control” spending with “zero accountability.” But his critiques of the ESA program much more accurately describe spending in his own district.
The Arizona Auditor General reports that Deer Valley spends $13,717 per pupil, meaning that a classroom of 25 students thus generates over $340,000 in total revenue. Where did this money go? Mainly not to teachers.
The Auditor General reports that Deer Valley average teacher pay is $2,163 below the state average. If Deer Valley is not prioritizing teachers, what is it prioritizing instead? The Auditor General report helpfully provides an answer: “high” and “very high” spending on administration and transportation, respectively, compared to a group of peer school districts.
The Goldwater Institute recently published a study of Arizona school superintendent compensation. Goldwater needed to use the open-records law to obtain this information, as districts compensate their superintendents in a variety of creative ways outside of their base salary, including providing either vehicles or “car allowances,” extra retirement benefits, and other perks.
The Goldwater Institute found that Deer Valley provides a total compensation package for their Superintendent of $290,505, including a car allowance of $10,000. This car allowance alone could have provided 20 teachers with $500 each for classroom supplies.
Even if one were to take the highly perverse view that students were the indentured servants of the school districts in which they reside, it would still be absurd for Deer Valley Unified officials to blame their problems on the ESA program. Arizona Department of Education reports show that 10,966 students lived within the boundaries of Deer Valley Unified but attended other public schools in 2024.
Deer Valley Unified meanwhile “drained” almost 3,000 students and their funding from other public schools. At the end of 2024, only 709 students had left a Deer Valley school to participate in the ESA program. Four different public schools outside Deer Valley Unified each have enrolled more students who reside in the district than the ESA program. Moreover 217 total public schools outside the district enroll Deer Valley Unified resident students.
Luckily, Arizona policymakers have decided that Arizona children are not merely funding units for their local school districts. Arizona families can use ESAs to choose the schools that are the best fit for the interests and aspirations of their children.
Arizona school districts have never had as much money as they have now, enough apparently to prioritize trips to California and perks for superintendents. If Deer Valley Unified officials hope to gain the enrollment of the thousands of resident students who have chosen to pursue their education elsewhere, a clear path forward would be to prioritize their funding.
Purchasing classroom supplies for teachers would be a great first step.
Matthew Ladner is a Senior Advisor for education policy implementation and Jason Bedrick is a Research Fellow at the Heritage Foundation’s Center for Education Policy.
Arizona AG Kris Mayes’ Communications Director Richie Taylor deleted his X, Bluesky, and LinkedIn accounts after screenshots of his alleged posts surfaced on “groypers” and “violence on the right.”
Corey A. DeAngelis, a Senior Advisor with Americans For Fair Treatment, shared a screenshot allegedly taken from Taylor’s X account, which read, “Lots of people learning about groyper’s tonight because of violence on the right in this country.”
The post appeared to advance the unsubstantiated theory that Charlie Kirk’s assassin, Tyler Robinson, is a member of online commentator Nick Fuentes’ fan base, known as “groypers,” who have rhetorically feuded with Kirk and Turning Point USA over the years.
— Corey A. DeAngelis, school choice evangelist (@DeAngelisCorey) September 17, 2025
As reported by the Associated Press, Utah County Attorney Jeff Gray revealed Tuesday that evidence, including a text confession and a note, shows the suspect targeted Charlie Kirk, stating, “I had enough of his hatred. Some hate can’t be negotiated out,” and “I had the opportunity to take out Charlie Kirk and I’m going to take it.”
The comments would seem to preclude the assassin from views that could be “on the right,” as Taylor’s alleged post suggested. Gray declined to address whether Kirk was targeted due to his views on transgenderism on Tuesday, telling reporters, “That is for a jury to decide.”
Last month, Taylor came under public scrutiny for “vicious ad hominem attacks” against Jenny Clark, founder of Love Your School, a nonprofit that advocates for parental rights, school choice, and resources for Empowerment Scholarship Accounts (ESA) and special education students.
🚨Update: the Head of Communications for @AZAGMayes , @richietaylor – has deleted posts against me which were extremely aggressive, untrue, unprovoked and vicious ad hominem attacks.
I make policy arguments supported by available facts, they prefer to personally attack people. pic.twitter.com/qkeXlqG9KU
Following the incident, Clark posted an update saying, “Update: the Head of Communications for @AZAGMayes, @richietaylor – has deleted posts against me which were extremely aggressive, untrue, unprovoked and vicious ad hominem attacks. I make policy arguments supported by available facts, they prefer to personally attack people.”
Arizona is one of the nation’s leading states in offering families education choice—and families are loving it.
Three out of four parents support the state’s Empowerment Scholarship Accounts program, which enables families to choose the learning environments that work best for their children. Parents can use these funds to pay for private school tuition, tutoring, textbooks, homeschool curricula, online courses, special needs therapy, and more.
The typical student in this program receives about $7,500 per year, less than half the $15,300 per pupil at Arizona’s district schools.
But Democrat Attorney General Kris Mayes wants to put a stop to even that.
Yet again, Mayes is waging lawfare against the more than 90,000 students using the state’s education choice program.
Earlier this year, Mayes ordered the Arizona Department of Education to adopt an extra-statutory regulation—one she invented from thin air—that undermined the ability of the department to approve education savings account expense requests in a timely manner. Now, she’s using exaggerated concerns over misspending to achieve the same end: throwing sand in the program’s gears.
Late last month, Mayes sent a letter to Arizona Superintendent of Public Instruction Tom Horne ordering him to cease automatically approving account purchases under $2,000, a practice Mayes argued “has led to ESA [Empowerment Scholarship Account] holders purchasing prohibited items […] with taxpayer funds.”
Horne, a former attorney general, responded that Mayes’s issue lies not with him but with the state Legislature, which modified the program’s statute last year to require the education department to adopt “risk-based auditing procedures” for the program. The revision was signed into law by Gov. Katie Hobbs, a Democrat.
The risk-based auditing provision seems like a boring, in-the-weeds detail. But such details can make or break a program like the Empowerment Scholarship Accounts—and Mayes knows it.
Before the Legislature revised the statute, the Arizona Department of Education was manually approving every single account purchase or reimbursement request. This “review every penny” approach was causing massive backlogs and delays.
There were nearly 11,000 transactions in Quarter 3 of this year alone. It’s impossible for the department’s small staff to review each transaction in a timely manner. Instead, families were forced to wait over two months to purchase things like books or curricular materials.
But families can’t wait months just to buy a textbook or pay their child’s tutor or school. Those who couldn’t wait had to pay out of pocket—and it took nearly five months to be reimbursed.
The delays caused families considerable frustration. A survey of families using the accounts found that two-thirds were dissatisfied with how the program was being administered, and about 8 in 10 were frustrated by long wait times for expense approvals and reimbursements.
It wasn’t supposed to be this way. ClassWallet, the vendor that operates the program, promised in its 2023 contract with the state “to automate the approval of platform transactions and reduce the [department’s] reliance on manual reviews of platform purchases,” claiming that the artificial intelligence it was developing “provides the State a path to a zero-approval queue, minimizing staffing and costs.”
Unfortunately, ClassWallet has thus far failed to deliver on that promise. And while artificial intelligence might one day allow parents to instantly access their funds while reducing fraud to zero, it’s not there yet.
In the meantime, the department needed a practical solution that simultaneously maximized user-friendliness while minimizing fraud.
That’s where risk-based auditing comes in. In response to parental frustration with the manual review process, the legislature modified the statute, ordering the Arizona Department of Education to adopt a risk-based auditing approach.
To comply with legislative intent, the department decided to automatically approve spending requests below $2,000, then audit accounts on the back end.
The new approach has been a stunning success. Parents can get most items immediately, and wait times for purchase requests above $2,000 dropped from two months to just three or four days. And the risk-based auditing system produced a high degree of financial accountability.
Unfortunately, though, the media seized upon the tiny percentage of ESA holders who are taking advantage of the looser rules. Sensationalist “journalists” with a long history of factually challenged attacks on school choice programs breathlessly reported that account holders purchased a variety of ineligible expenses, including diamond rings and necklaces, flights and hotel stays, and even lingerie.
What they neglected to report was the scale of the misspending.
Last month, the Arizona Department of Education revealed that its internal audit of two years’ worth of ESA spending had turned up $622,000 in ESA funds that are “possible fraud or misuse.” That’s less than 0.05% of total ESA spending from 0.4% of account holders.
More than that, anyone engaged in misspending will be forced to pay the money back and could face prosecution. The department reports that it is “in the process of collecting more than $600,000” in improper spending, and it’s already suspended 400 accounts. Some have been referred some to the attorney general for further investigation and prosecution.
One would think that the attorney general would be impressed by this high level of accountability. But instead, she’s demanding that the Education Department abandon risk-based auditing in favor of the failed manual-review process that produced months-long wait times.
Clearly, accountability is not the goal here. Arizona’s attorney general is using misspending as a pretext. If accountability were her real concern, she’d be raising alarms about all the waste, fraud, and abuse in the district school system—such as the $12 billion worth of unused and underutilized buildings that Arizona school districts are sitting on, or the record $7.8 billion they’re holding in cash reserves.
Mayes says she is concerned with stopping the 0.4% of account holders committing fraud. But her demands would make the program unworkable for the over 99% of families who are just trying to do right by their children.
Punishing fraud is necessary. Every government program has some amount of fraud and abuse, and public officials have a duty to implement rules that keep fraud to a bare minimum. But undermining a program’s effectiveness does not serve the public interest, especially when that program is helping kids get access to a better education and a brighter future.
The attorney general’s demands are unreasonable and pretextual. Acceding to her demands would not fix the state’s education choice program—it would break it. Horne was right to tell the attorney general to go pound sand.
Jason Bedrick is a Research Fellow at The Heritage Foundation’s Center for Education Policy.
