The Goldwater Institute sent a letter to the Arizona Department of Education today regarding the Department’s worsening failures in administering the state’s Empowerment Scholarship Account (ESA) program. These failures—and outright violations of the law—have reached a crisis point for scores of families across Arizona who depend on the ESA program for the education of their kids, many of whom have special needs. So we’ve asked the Department to rectify these problems immediately, or face legal action.

The ESA program allows certain groups of students—particularly including special-needs kids, children of military families, and kids living on Indian reservations—the opportunity to use funding that would otherwise have gone to a government-run school to fund other options, instead, including one-on-one tutoring or home-schooling. But in recent months, the Department has failed to provide parents the funding they’re entitled to under the program, or has paid days or weeks late—in violation of the law and in violation of parents’ contractual rights. This harms parents and kids—among Arizona’s most vulnerable—by forcing them either to pay bills out of their own savings instead of with their ESAs (and they’re not allowed to subsequently reimburse their savings if they do that), or to actually withdraw from the tutoring services they were getting. 

Much of this results from the Department’s policy of withholding ESA funds until it reviews and approves prior quarterly expense reports that the Department orders parents to file. Yet the Department has no legal authority to do that. It’s allowed to audit parents under some circumstances, but not to withhold funding pending its review of reports—which often takes an extraordinarily long time, and which the Department reserves the right to reverse at any time. That means that even if a parent gets approval for the previous quarter, and receives her ESA funds, the Department can come back at any time in the future, revoke its previous approval, and shut down the parent’s ESA account.

The Department also continues to use its ESA Handbook, which contains a set of rules that the Department issued without following the proper legal procedures. Whenever any government agency creates rules, it must follow a process that includes input from the public and other things—but the Department never did that when it created its Handbook. Even the Arizona Attorney General has acknowledged that the Handbook should therefore not be considered a binding rule—yet the Department continues to use it and to tell parents they must follow it. That’s a problem because the Handbook contains all sorts of requirements and deadlines that simply have no legal basis. The Department just made them up.

The Department’s procedure for helping parents has further aggravated families’ difficulties. Phone calls to their helpline regularly lead to wait-times that exceed three hours. Not long ago, I myself was forced to call the line when the Department refused to reply to our letters—and remained on hold for three solid hours, before being hung up on at 4:30, because that’s when the office closes.

A few weeks ago, the Goldwater Institute sent the Department a letter voicing these concerns, and shortly afterwards, our friends at the Liberty Justice Center sent the Department a demand on behalf of a parent who had not received her funding. The Department replied by insisting that they had paid her…a week late! That, of course, is still illegal. And, in the meantime, we’ve been contacted by well over 100 families who have experienced similar difficulties. The Department’s behavior is hindering the ESA program and hurting Arizona families who are just trying to get the best schooling for their children. 

We’ve asked the Department to cease relying on (or telling parents to rely on) the unlawful ESA Handbook,to cease withholding funds pending the review of quarterly expense reports, and to take other steps to ensure that this program is legally and promptly applied to accomplish the good it was meant to accomplish. You can read our demand letter here.

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