by Staff Reporter | Mar 16, 2026 | Education, News
By Staff Reporter |
The Arizona Department of Education (ADE) accused a major media outlet of misrepresenting the amount of fraud that occurs within the state’s school choice program.
Per ADE, 12News claimed the Empowerment Scholarship Account (ESA) Program had fraud totaling 20 percent. ADE said this figure was false, and that the true fraud rate sits at 0.3 percent.
The 20 percent claim originated from a risk-based audit — an audit of limited scope — which targeted specific higher-risk participants and accounts. It does not account for the entire ESA Program population, says ADE.
ADE presented the 0.3 percent figure from a study by Stanford PhD on a random sample to obtain a more accurate assessment of the entire ESA population. That study, which reviewed 3,000 random ESA orders between July 2025 and February 2026, also concluded that unallowable spending amounted to less than two percent of the total.
ADE Superintendent Tom Horne demanded 12News issue a retraction.
“A ridiculous figure of 20 percent fraud has been circulating concerning ESA purchases which resulted from a total misinterpretation of data provided to Channel 12. The 20 percent figure represented program participants that ADE had selected for risk-based auditing,” said Horne in a press release. “Continued use of the 20% fraud allegation is an outrageous misrepresentation to the public that must stop.”
By comparison, Horne noted, other government programs have higher rates of improper spending: Medicaid totals over seven percent, food stamps total over nine percent, and unemployment insurance totals over 14 percent.
Horne clarified that the unallowable purchases rate doesn’t constitute fraud necessarily. The superintendent said “most” of those purchases were confirmed as “innocent mistakes” such as improper form completions or viewing certain unpermitted educational items as permitted, like backpacks or lunch boxes.
Horne said ADE promptly recovers misspent funds, and has recovered over $1.2 million.
The disputed 20 percent figure was mentioned in multiple articles by 12News, including one of the latest pieces of coverage published on Wednesday.
“According to state records obtained by 12News Investigates, nearly 20% of ESA parents or at least 18,000 ESA account holders, have misused voucher funds,” read Wednesday’s article.
The original 20 percent figure by 12News stemmed from a report on public records reviewed by the outlet which estimated that misspending “could” amount to 20 percent of all purchases in the ESA Program. The report stated that over 18,600 out of the 102,000 ESA account holders had at least one unallowable purchase over the course of a year.
Horne said at the time that the percentage provided wasn’t totally representative of fraud; rather, the superintendent said “most of it” was attributable to mistakes by the parents.
While critics of the program highlight the millions ADE is forced to recover, mainly from misspending and marginally from fraud, supporters of the program highlight the millions saved by children entering the ESA Program rather than their designated public district school system.
Goldwater Institute director of education policy, Matt Beienburg, said in a press release that wrongful spending occurs just as much, if not more, in the public school district system.
“It’s also worth observing that just 52 cents of every dollar sent to Arizona district schools now makes it to classroom instruction according to the state auditor general,” said Beienburg. “Among the many uses of those funds outside the classroom: a $500,000 trip to Las Vegas by a school district that promptly cut bus services for students; a district spending $4,000 per person to send staff to Napa, California for a conference featuring wine tastings, a district spending $18,500 on ‘membership dues and for staff to attend golf tournaments,’ and more.”
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by Matthew Holloway | Mar 4, 2026 | News
By Matthew Holloway |
The Arizona Court of Appeals has ruled that prevailing wage ordinances enacted by the cities of Phoenix and Tucson violate state law, ruling in favor of the Associated Minority Contractors of Arizona, represented by the Goldwater Institute in a lawsuit challenging those laws.
The decision holds that local ordinances requiring contractors on certain public works projects to pay “prevailing wages” are prohibited under a 1984 state statute, A.R.S. § 34-321(B), that forbids cities from imposing prevailing wage requirements. The appellate court affirmed the lower court’s judgment that the ordinances conflict with state law.
Goldwater’s lawsuit was brought on behalf of the Associated Minority Contractors of Arizona, the Arizona Builders Alliance, and the Arizona Chapter of the Associated General Contractors of America, who argued that the ordinances exceeded cities’ authority under Arizona statute.
In a statement, Timothy Sandefur, Vice President for Legal Affairs at the Goldwater Institute, said, “The real winners in today’s ruling are Arizona taxpayers—as the court itself made clear.”
Sandefur then quoted the court’s language, writing: “The Cities’ interpretation would grant the Cities broad power. With that power, the Cities could dictate how much any employer pays any employee anytime an employer contracts or subcontracts with the Cities. Put differently, the Cities by ordinance could dictate pay whenever an employee works under a public contract, regardless of the contract’s value or the nature of the work performed.”
He added, “That, of course, would cost taxpayers more—reducing their freedom of choice and their ability to invest in their own futures—all for the benefit of politicians and politically well-connected lobbyists.”
In a post to X, he wrote, “The decision’s an important victory for taxpayers throughout the state, who’d otherwise be forced to pay inflated prices for public works projects even though a state law approved by voters abolished ‘prevailing wages’ over 40 yrs ago.”
Prevailing wage laws, distinct from minimum wage laws, require employers on public contracts to pay workers based on wage rates calculated by formula, often higher than standard minimum wages. The 1984 state law expressly prohibits cities from requiring public works contracts to include prevailing wage provisions.
In the case before the appellate court, Phoenix and Tucson had passed ordinances applying prevailing wage rates to city contracts exceeding defined monetary thresholds, $4 million for Phoenix and $2 million in Tucson, and set wage requirements by reference to federal Davis-Bacon Act wage schedules.
Attorneys for the cities had argued that subsequent voter-approved minimum wage measures, including the 2006 voter-approved Minimum Wage Act and subsequent amendments, allowed local governments to regulate minimum wages and thus could support prevailing wage requirements. The court rejected that interpretation, finding that the statutory authority for cities to regulate minimum wage does not extend to prevailing wage mandates.
In its ruling, the appellate panel wrote that prevailing wage provisions do not qualify as “minimum wages” under the relevant Arizona statutes, noting that prevailing wage requirements apply only to a subset of workers on specific public contracts, whereas minimum wage laws apply generally to all employees once employed.
“Section 34-321(B) prohibits political subdivisions from requiring contractors or subcontractors to pay the prevailing rate of wages on public works contracts,” the court wrote. The panel further held that Phoenix’s and Tucson’s ordinances “conflict with § 34-321(B) and are therefore invalid.”
The court concluded that the 1984 prohibition on prevailing wage requirements remains in effect and was not repealed by later minimum wage laws, determining that the newer statutes and the prevailing wage prohibition can coexist without conflict.
“The Local Permission Provision authorizes regulation of minimum wages,” the court wrote, referring to § 23-364(I). “Prevailing wages are not minimum wages.”
Prevailing wage ordinances have been the subject of multiple legal challenges in Arizona. In 2024, a Maricopa County Superior Court judge similarly ruled against prevailing wage ordinances in Phoenix and Tucson, finding they violated the same state prohibition.
The appellate decision affects not only Phoenix and Tucson but also any Arizona city considering similar prevailing wage mandates under state law, consistent with the court’s interpretation of A.R.S. § 34-321(B) on municipal wage-setting authority for public works contracts.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Feb 20, 2026 | News
By Matthew Holloway |
Attorneys with the Goldwater Institute are scheduled to appear in Maricopa County Superior Court at 10 a.m. Friday for a hearing in their lawsuit challenging water policy changes implemented by the administration of Katie Hobbs.
The case, filed in January 2025 on behalf of the Home Builders Association of Central Arizona, contests new requirements adopted by the Arizona Department of Water Resources (ADWR) affecting groundwater supply determinations in parts of Maricopa County.
The Goldwater Institute said the policy changes have halted approvals for new housing developments in certain areas of the Phoenix metropolitan region, including portions of Queen Creek and Buckeye.
Under Arizona law, homebuilders in designated Active Management Areas must obtain a certificate demonstrating a 100-year assured water supply before beginning construction.
Goldwater’s lawsuit challenges a policy change announced by ADWR in November 2024. It contends that the department adopted a new framework based on what it describes as “unmet demand,” which it says is not referenced in Arizona statute.
Goldwater penned a letter to the ADWR one month later, urging the agency to reconsider its “AMA Wide Unmet Demand Rule,” asserting that the new rule was in violation of the law, having been imposed without legislative approval or via the required rulemaking process.
ADWR has defended its authority to interpret and apply groundwater modeling within the state’s assured water supply program. The department has not publicly characterized the policy as a formal rulemaking.
The Maricopa County Superior Court previously denied ADWR’s motion to dismiss the case, allowing the lawsuit to proceed.
During Friday’s hearing, attorneys for Goldwater are expected to ask Judge Scott Blaney to enter judgment in favor of the Home Builders Association of Central Arizona.
The case is being heard at the Maricopa County Superior Court, East Building, located at 101 W. Jefferson Street in Phoenix.
In a statement, Goldwater Institute Vice President for Litigation Jon Riches said: “Decisions on vital statewide concerns like the availability of affordable housing and the responsible stewardship of our natural resources should be made through a transparent, democratic process—not imposed by executive fiat.”
Additional information about the case is available on the Goldwater Institute’s website. No ruling is expected at the time of the hearing.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Feb 6, 2026 | Education, News
By Matthew Holloway |
Arizona State University (ASU) professor Dr. Owen Anderson has asked the Arizona Supreme Court to hear his case challenging mandatory diversity, equity, and inclusion (DEI) training after a lower court dismissed his lawsuit, according to a petition filed this week by the Goldwater Institute.
Anderson, a philosophy and religious studies professor at ASU, originally filed the lawsuit in 2024 against the Arizona Board of Regents. He argued that the university’s required “Inclusive Communities” DEI training violated an Arizona statute that prohibits public agencies from making employees participate in training that “presents any form of blame or judgment on the basis of race, ethnicity, or sex.” Arizona Senate President Warren Petersen (R-LD14) and then-House Speaker Ben Toma (R-LD27) filed an amicus brief in support of Dr. Anderson’s lawsuit.
According to the Goldwater Institute’s petition, Anderson objects to the DEI training materials, saying they include concepts about race and identity that he believes are unlawful under state statute.
“No one should be forced to participate in divisive DEI training or endorse race-based ideology as a condition for holding a government job. That’s exactly why Arizona lawmakers banned mandatory trainings that teach discriminatory ideas about race, ethnicity, or sex. But a law without enforcement is no law at all,” Goldwater attorney Stacy Skankey explained. “We’re asking the Arizona Supreme Court to correct the lower court’s error and restore Arizonans’ right to hold government agencies accountable when they violate the law.”
Goldwater stated in a press release, “There’s no way around it—a law is meaningless if it can’t be enforced. If allowed to stand, the error by the Arizona Court of Appeals would eliminate an essential civil-rights safeguard for public employees and taxpayers. The ruling changes how Arizona laws are enforced by removing the ability of an ordinary Arizonan to ensure government officials obey the law.”
In its February filing, Goldwater said the Arizona Court of Appeals ruled that Anderson could not sue because it concluded the relevant law does not expressly provide an avenue for individuals to challenge such training in court.
The petition filed by the Goldwater Institute argues that allowing the Court of Appeals’ decision to stand would leave public employees without a means to enforce the statute and hold government employers accountable. It asks the Arizona Supreme Court to recognize an implied private right of action under the law, allowing employees to challenge alleged unlawful training mandates.
The case highlights a broader debate over DEI programs at public institutions. The previous lawsuit filed by the Goldwater Institute in March 2024 similarly challenged ASU’s DEI training and sought a court order preventing the Board of Regents from imposing or using public funds for the training, citing the same Arizona statute.
ASU has previously contested the Goldwater Institute’s claims, with university officials stating that its training reflects its commitment to inclusiveness and does not violate state law. However, as AZ Free News has previously covered, ASU lost 27 grants from the National Science Foundation (NSF) in 2025, worth approximately $28.5 million, in line with the NSF policy that ensures grants don’t prioritize certain groups or individuals.
Speaking of the ongoing lawsuit, Professor Anderson said in a statement, “Arizona State leaders broke the law when they forced me and every other employee to take part in an ideological training that taught that it’s okay to judge people on their race, ethnicity, religion, and sex. I simply refuse to do that. Ultimately, the question before the Arizona Supreme Court isn’t a left or right issue—it’s about whether a state employee has the right to hold their employer accountable when it violates the law.”
There is currently no set timeline for the Arizona Supreme Court to decide whether it will grant review of Anderson’s petition.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Feb 4, 2026 | Economy, News
By Matthew Holloway |
Arizona’s growing role as a national hub for data centers could be undermined by municipal regulations driven by concerns over water use, electricity demand, and land use, according to a new policy report released by the Goldwater Institute. The report, Data Centers: A Free Market Model for the Digital Future, argues that Arizona’s success in attracting data center investment stems from long-standing policy choices that favor predictable regulation, private property rights, and a stable legal environment.
The authors note that “artificial intelligence has dramatically accelerated these trends. Demand for data has increased exponentially. How communities, businesses, and policymakers respond to this transformation will shape economic competitiveness for decades to come.”
The report also cautions that a rise in local-level restrictions could threaten the state’s competitive position in the digital infrastructure sector.
William Beard, municipal affairs liaison at the Goldwater Institute and a co-author of the report, explained, “Data centers are the physical backbone of cloud computing, artificial intelligence, digital commerce, and national security. They are core infrastructure, no different in principle from transportation networks, energy production, or large-scale agriculture built to meet the demands of a particular era.”
Beard added that Arizona’s emergence as a leader in data center development has already produced economic benefits for the state. “Arizona is thriving as a leader in data centers, the state is reaping the economic benefits, and policymakers must take steps to ensure that continues,” he said.
According to the report, the Greater Phoenix region has become one of the top data center markets in the United States, with capacity projected to exceed 5,000 megawatts—an expansion of more than 500 percent. Goldwater attributes the dramatic growth to regulatory predictability and policies that encourage investment rather than discourage it, as well as “affordable land; reliable energy; and a legal environment anchored in strong private property rights.”
However, the report also warns, “Continued growth is no guarantee, especially as local governments threaten data centers with restrictive policies.”
Data center developments, such as the 290-acre data center Project Blue in Pima County and Project Baccara in Surprise, have sparked heated controversy at the municipal and county levels.
Citing growing municipal resistance to data center projects, Jen Springman, coalitions manager at the Goldwater Institute and a co-author of the report, said opposition is often rooted in misunderstandings about the impacts of infrastructure.
“Arizona’s advantage is increasingly threatened by a growing municipal-level regulatory backlash, often driven by misconceptions about water use and electricity demand,” Springman said.
Regarding water consumption, Springman said, “Modern data centers are among the most water-efficient industrial facilities ever built.”
The report further challenges claims that data center development is responsible for rising electricity prices. “Electricity prices, meanwhile, are not a data center problem; they are a policy outcome,” Springman said.
She added that misdirecting blame can lead to ineffective policy responses. “Blaming infrastructure for political energy choices obscures the real cause—and produces the wrong solutions,” Springman said.
Goldwater’s report argues that local restrictions do not reduce demand for digital services, but instead risk shifting investment to other states while increasing costs for consumers and businesses.
In a summary of the report’s conclusions posted to X, Goldwater stated, “The question is not whether data centers will exist, but whether Arizona will continue to lead—or retreat in the face of the future.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
