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.
Richie Taylor, Communications Director for Arizona Attorney General Kris Mayes, was called out on social media earlier this week. The Democrat staffer allegedly launched “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.
Clark sat on the State Board of Education, appointed by former Gov. Doug Ducey in 2022, as a public member known for her advocacy for ESAs and School Tuition Organizations (STOs), and for vocally opposing Governor Katie Hobbs on both topics. She was ousted from the role by Hobbs in March after her term expired.
Following an August 27th segment on KTAR’s Outspoken, which featured Clark, AZGOP Chairwoman Gina Swoboda, and KTAR Legal Analyst Barry Markson, a terse exchange between Taylor and Clark began.
More from ESA Debate on @OutspokenKTAR:@ClarkRimsza provides important context that more than 99.9% of ESA purchases are proper educational spending.@BarryMarkson1: I think 99% of the parents using the program probably are using it right. I absolutely agree with you! pic.twitter.com/zfpLMTfDlO
The disagreement appeared to arise when Taylor referred to Clark as a “grifter” and put her name in quotation marks, which led Clark to point out Taylor’s collaboration with her during his time as Communications Director for the Arizona Department of Education. She wrote, “Why is my name in quotes, Richie! How weird! Remember when you were at the AZ Dept. of Ed. and we partnered to get flyers out about the ESA program in 2021? Here’s a screenshot for reference! Feel free to keep attacking the Arizona ESA program – right into 2026, please!”
Why is my name in quotes, Richie! How weird! Remember when you were at the AZ Dept. of Ed. and we partnered to get flyers out about the ESA program in 2021?
The exchange escalated with Taylor posting, “lol indeed. You caught me acting in good faith. Wow impressive. Again, you had a dem superintendent wanting to work with you and you f***ed it over at every turn because it would have ruined your grift.”
Why is the Head of Communications for @AZAGMayes posting in my X account, totally unprovoked, and cussing me out?
We have had cordial exchanges before when he was at ADE and I worked to get flyers out for them on ESAs (which I shared in screenshots).
In response, Clark shared the post and asked: “Why is the Head of Communications for @AZAGMayes posting in my X account, totally unprovoked, and cussing me out? We have had cordial exchanges before when he was at ADE and I worked to get flyers out for them on ESAs (which I shared in screenshots). Inappropriate and odd.”
Responding to another now-deleted post, she asked, “Why is the Head of Communications for an elected Attorney General @AZAGMayes personally attacking a working mom, who started a non-profit on school choice, and is helping families? I mean, is this the type of class and leadership we have come to expect from democrats? Odd!”
She replied to the post, writing, “It’s such an abrupt and unprofessional personal attack. I’m not sure what prompted it! I’ve never had issues with @richietaylor before, all of a sudden today they’re attacking me personally on my X threads. It’s actually very concerning, on a few different privacy levels, too.”
Taylor then doubled down replying “Cry more and get used to it.”
In the most recent post in the social media clash, Clark shared a screenshot of the now-deleted post in which Taylor allegedly wrote to her, “lol. You make so much money off the program and you know it[.] Why don’t you tell people how much? And you also know you torpedoed any real reform because you were trying to get your preferred vendor the contract to manage it.”
According to ProPublica, citing public tax records, Clark drew a salary of $102,000 in her role as Executive Director of Love Your School. No public record of her applying for “preferred vendor status” was found in the State Board of Education’s available online records.
In her post, Clark wrote, “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.”
Responding to a letter issued by Arizona Democrat Attorney General Kris Mayes, Arizona Superintendent of Public Instruction Tom Horne issued a statement that Mayes is “misleading the public with claims she has leveled at the management of the Empowerment Scholarship Account (ESA) program.” In an 8-page letter with 12 pages of testimony from the Arizona Department of Education’s John Ward in the case of Velia Aguirre v. State of Arizona, Mayes outlined an investigation from her office, making allegations regarding the Department of Education’s use of a risk-based audit approach, which echoes a similar exchange between Horne and Governor Katie Hobbs in December 2024.
Mayes directly critiqued Horne and the ADE writing in part:
“Your failure to appropriately monitor ESA spending has created an untenable situation. Again, I do not want to disrupt the process for ESA holders who are following the law, but this cannot continue. Accordingly, you must act immediately to develop and implement appropriately rigorous purchase review standards and risk-based audit procedures so that ESA families may access their funds in a timely manner and public funds are not spent illegally. The Department’s purchase review and audit standards should employ appropriate controls to safeguard public funds. These controls, and any automatic payment thresholds, should consider the level of risk associated with different categories of expenses, vendors, methods of payment, and individual ESA holders.”
Mayes went on to cite a 12 News report that “the Department has automatically approved [$]1.2 million ESA purchases since the automatic approval policy took effect in December 2024.”
As Matt Beienburg wrote in an op-ed for AZ Free News, the Arizona Capitol Times issued a retraction of its initial report that “Education department under fire for approving $124M in improper ESA [education savings account] purchases,” clarifying with a formal correction that “an inaccurate dollar amount,” was reported. However, no similar retraction has been issued by 12 News as of this report.
"Facts don't lie, even if the media does."
Here are two MAJOR lies 12News "reported" in its bogus ESA attack 👇
❌ Dollar amounts were exaggerated up to 100 times!
Beienburg notes that blatantly inappropriate purchases such as iPhones, televisions, and other non-educational items “haven’t been approved, as the State Board of Education’s ESA Handbook—ratified by members appointed by both former Gov. Doug Ducey and Gov. Katie Hobbs—makes clear. The document expressly states that while families’ ESA purchases under $2,000 are promptly reimbursed by the state, these items ‘are not deemed ‘approved’ by the Department, until they are audited OR the timeframe to audit the orders has passed [2 fiscal years].’ Just like their tax returns filed with the IRS, these families’ ESA purchases are processed up front and subject to enforcement afterwards.”
For immediate release: August 29, 2025 Horne calls out AG Mayes for misleading attack on ESA program AG sent letter to Superintendent today Link: : https://t.co/ul3JSKLudp Contact: Communications@azed.gov pic.twitter.com/xGEPdsrHqB
— Arizona Department of Education (@azedschools) August 29, 2025
In a lengthy statement, Horne addressed the allegations raised by Mayes and accused the AG of making false statements:
“In your letter today, and in a recent television interview, you misled the public by stating that improper ESA purchases had been approved, without any reference to the fact that under risk-based auditing dictated by the legislature the money has been recovered or is in the process of being recovered. We have collected or are in the process of collecting more than $600,000 that was paid out for improper purchases. You also criticize risk-based auditing. Risk-based auditing is a very common and appropriate practice used by auditors, and the ESA Director has more than 16 years’ experience as an auditor. The risk-based approach involves not approving purchases prior to review, but paying amounts under $2,000 subject to later review, which is how we were able to collect or be in the process of collecting more than $600,000.”
He went on to chide Mayes writing, “You state that this is not partisan. That is disproved by all the false statements you made on the television interview.”
Horne continued, “Your argument is not with me but with the legislature. The legislature recently passed ARS section 15–2403B. It provides in part: ‘The department, in consultation with the office of the auditor general, shall develop risk-based auditing procedures for audits conducted pursuing to this subsection.’
“The statute was passed because the department is operating with the same number of people to check purchases as had been given by the legislature when the program was 1/7th as large. The most recent House budget included an appropriation for more people to check purchases, but it had to drop that provision when the governor said that if it did not do so, she would veto the entire budget. The limit on personnel had meant delays for reimbursement or more than two months, which was an unbearable burden for parents who had already paid the money and needed reimbursement. This explains why the legislature wanted to add more staff to serve parents.
“Again, you misled the public in your interview by stating that these improper items have been approved. They were not approved, and as to all the items you mentioned, the accounts have already been frozen. This is as egregious as ignoring the recovery of over $600,000, not to mention your failure to state that this procedure was dictated to us by the legislature and the ESA parent committee that you referred to set the limit at $2,000 pursuant to the legislative command to adopt risk-based auditing. It has been made clear to ESA users in multiple communications that payments of under $2,000 do not imply approval, which can be obtained only after the risk-based auditing dictated by the legislature.
“You referred to a July 21 meeting of the legislative audit committee. Within four days we consulted with the auditor general. Some have erroneously interpreted the word ‘consultation’ to mean that the auditor general has the right to dictate terms to us. That is incorrect. The normal English language use of the word consultation is that we have a discussion, which we have done, and then proceed. However, we have agreed to have further consultations with the auditor general and will do so.
“We will provide at a later date further responses to your long-winded letter of seven pages single space. We are responding now to the main points so you will have no further excuse to mislead the public.”
The legacy media seem to be on a mission: tear down Arizona’s groundbreaking school choice program with false accusations and inaccurate reporting.
Fortunately, facts don’t lie, even if the media does.
The Arizona Capitol Times declared this week in astonishing terms, “Education department under fire for approving $124M in improper ESA [education savings account] purchases.”
Such astronomical levels of fraud would seem to threaten the very foundations of the historic school choice revolution that has swept the nation. There was just one problem, the headline was completely false.
Not only were the supposed dollar amounts exaggerated up to 100 times greater than the amounts of improper spending actually reported by the department, but these purchases weren’t even approved in the first place.
Here’s the story the media won’t tell: Arizona’s 2022 adoption of a fully universal ESA program has been a nation-leading success, allowing parents across the state to give their children an education best suited to their needs.
To its credit, the Times quickly retracted its original headline and issued a formal correction admitting “an inaccurate dollar amount” in its first draft and eliminating the suggestion that the purchases were “approved.” Unfortunately, such journalistic ethics appear not to be shared by the Times’ more ideological media counterparts in Arizona, particularly those of the teachers’ union-aligned 12News team, who have resolutely declined to correct or retract their false reporting.
12News’ Craig Harris, for instance, has repeatedly and falsely declared that the state has “approved” ESA purchases for iPhones, televisions, and other non-educational items over the past year.
But all those purchases haven’t been approved, as the State Board of Education’s ESA Handbook—ratified by members appointed by both former Gov. Doug Ducey and Gov. Katie Hobbs—makes clear. The document expressly states that while families’ ESA purchases under $2,000 are promptly reimbursed by the state, these items “are not deemed ‘approved’ by the Department, until they are audited OR the timeframe to audit the orders has passed [2 fiscal years].” Just like their tax returns filed with the IRS, these families’ ESA purchases are processed up front and subject to enforcement afterwards.
Yet, 12News either knowingly misrepresented the status of these orders or else incompetently failed to perform basic due diligence to learn how the program operates.
By 12News’ anti-ESA logic, the IRS should apparently also withhold refunds to taxpayers until their tax returns have been audited potentially years later, rather than promptly when the returns are filed.
Unfortunately, this is not the first time that 12News’ anti-school choice reporters have been exposed in such light. In 2018, Harris (then with the Arizona Republic) falsely reported that Arizona charter schools produced worse student graduation rates and worse outcomes on the state A-F letter grade system than district schools. Both claims turned out to have been fabricated results stemming from a faulty, agenda-driven data analysis by Harris’ team.
In 2024, 12News’ Joe Dana likewise doubled down on false claims that ESAs cost state taxpayers more than the public school system per student by conveniently ignoring major sources of public school funding. The state’s Classroom Site Fund, for example, allocates over $1,000 for every public school student in the state and gives not a penny to ESA families.
Undeterred by journalistic standards, Dana’s 12News team also went further, deceptively extracting a fragment of a statement given by the state’s budget director (given in response to a completely different question) to suggest the ESA program had created unprecedented strain on the state budget.
The Heritage Foundation’s Matt Ladner and Jason Bedrick have already exposed a litany of deceptive claims flowing from outlets like 12News, while more prestigious national news organizations like The Washington Post have seen their recent anti-ESA narratives similarly debunked. Yet none of these outlets have expressed any contrition for their deceptive coverage.
Indeed, in perhaps the richest of ironies, Harris’ 12News team recently attacked ESAs for “hurting” high-performing schools like Arizona charter network BASIS by competing with it for students. Never mind that Harris previously attacked BASIS for its alleged poor stewardship of taxpayer funds. Now that it is clear he and the media were on the wrong side of that school choice debate as well, they have simply shifted to a new enemy in their war on parents.
Looking at the whole of Arizona’s education landscape, there is no question that those who seek to defraud the state—whether via the traditional public school system or its competitors—should be prosecuted to the full extent of the law. But if there is a scandal in our education system, it is the dishonest reporting by journalists who are more disturbed by parental empowerment than by the tens of billions of dollars squandered year after year in chronically poor performing public schools.
Matt Beienburg is the Director of Education Policy at the Goldwater Institute.
Channel 12 continued its clumsy crusade against school choice this week with a breathless report about fraudsters abusing Empowerment Scholarship Accounts to buy diamond rings and necklaces, flights and hotel stays, and even lingerie.
It paints a picture of a program rife with abuse. But is it?
The Arizona Department of Education gave Channel 12 the records for more than 1.2 million ESA requests. Yet when askedrepeatedly what percentage of those requests were fraudulent, Channel 12’s reporter refused to comment.
Why? Because the truth undermines the anti-ESA narrative.
The salacious report is intended to persuade policymakers who support ESAs to impose regulations that would undermine the ESA program. It goes without saying that anyone engaged in fraud should be prosecuted to the fullest extent of the law, and the Arizona Department of Education is appropriately cracking down on fraudsters. But before policymakers rush to amend the ESA program, they should know the context that Channel 12 left out.
ESA Misspending Is a Tiny Fraction of Total ESA Spending
The ESA program currently serves about 90,000 students at a projected cost of $882 million this year and $939 million next year, or about 6.7% of the $14 billion spent on Arizona’s district schools. Families can use ESAs to purchase a wide variety of educational expenses to customize their child’s education.
The typical ESA student receives about $7,500 per year, compared with more than $15,300 per pupil at Arizona’s district schools. Students with special needs—who account for more than 19% of ESA students, compared with 14% of district school students—can receive more funding, although the accounts are still worth 90% of what the state spends on similarly situated students at public schools. According to the Common Sense Institute, “a disproportionate share of middle-income households use an ESA.”
On Tuesday, the Arizona Department of Education revealed that their internal audit had turned up $622,000 in ESA funds that are “possible fraud or misuse.”
That’s less than one-tenth of 1% of total ESA spending.
Ignoring Mountains, Covering Molehills
Meanwhile, there are 30 school districts that the Arizona Auditor General currently deems to be non-compliant with state reporting requirements or that have internal control deficiencies. The total spending in those districts is more than $1.4 billion, more than the total spending of the ESA program. Yet aside from its coverage of the disastrous overspending in the Isaac Elementary School District, Channel 12 has barely covered it at all.
For that matter, Channel 12 has ignored the $7.8 billion that Arizona school districts are holding in cash reserves. That’s about $7,000 per pupil. The reserves have grown $2 billion in two years, yet Channel 12 doesn’t evince even the slightest curiosity about why.
Nor is anyone at Channel 12 interested in the $12 billion worth of unused and underutilized buildings that districts are sitting on, often just to prevent private or charter schools from buying them.
Channel 12 found space in the aforementioned ESA exposé to mention that a judge recently ruled that the state supposedly “isn’t properly funding capital needs for its public schools,” but the station had no space to mention that school districts are sitting on $20 billion in cash reserves and underutilized buildings.
Indeed, Channel 12 has barely covered any of these facts even as they pump out multiple anti-ESA stories each week, despite the fact that the ESA program is dwarfed by the spending at non-compliant districts, district school cash reserves, and underutilized buildings.
School-choice opponents and their media allies are hyper-focused on ESA misspending because they want to pressure lawmakers to undermine the program via regulation.
The Arizona Department of Education adopted its risk-based auditing strategy—automatically approving ESA spending requests below $2,000, then auditing accounts on the back end—because Superintendent Tom Horne’s previous “review every penny” approach was causing massive backlogs and delays in approving expense requests and reimbursements.
There were nearly 11,000 transactions in quarter 3 of this year alone. It’s impossible for the department’s staff to review each transaction in a timely manner, but parents trying to teach their kids can’t wait months just to buy a textbook or pay their child’s tutor or school.
To Horne’s credit, he listened to parents and made some incremental improvements that make it easier for parents to use the program. Now a tiny percentage of ESA holders are taking advantage of the looser rules, but they will be forced to pay the money back and could face prosecution.
The Arizona Department of Education has suspended 400 accounts due to improper spending —just 0.4% of the total accounts—and has referred some to the Attorney General for further investigation and prosecution.
Punishing fraudsters is necessary. Every government program is subject to some amount of fraud and abuse, and it’s incumbent upon public officials to implement rules that keep fraud as close to zero as possible. But it is not in the public interest to undermine a program’s effectiveness, especially when that program is helping kids get access to a better education and a brighter future.
School-choice opponents are using misspending as a pretext. If that was their real concern, they’d be raising alarms about all the waste, fraud, and abuse in the district school system. They’re not really concerned with stopping the 0.4% of ESA holders committing fraud, they just don’t want the program to work for 99+% of families just trying to do right by their kids.
Supporters of education freedom and opportunity should ignore the manufactured outrage and work to ensure that the ESA program works well for the families it serves.
Jason Bedrick is a Research Fellow at The Heritage Foundation’s Center for Education Policy.
