Arizona School Vouchers: Funds Spent on Ads vs. Staffing – A $10M Dispute

PHOENIX – Arizona lawmakers are considering a $3.7 million investment to bolster staffing at the Arizona Department of Education as it struggles to administer the state’s rapidly expanding school voucher program, officially known as Empowerment Scholarship Accounts (ESAs). However, Democrats are questioning whether the department is prioritizing program oversight or simply promoting its growth, pointing to a previous allocation of funds that was used for advertising.

The Arizona House of Representatives passed two bills on Monday, allocating $1 million this year and $2.6 million next year to hire additional staff. Representative Matt Gress (R-Phoenix) argued the funding is crucial to address the program’s explosive growth, which has seen enrollment jump from approximately 10,000 students in 2021 to nearly 102,000 today.

“But did we increase the ability to administer this program at the rate that we needed to? We did not,” Gress said. “I think it caught government by surprise, and we are working to ensure that parents and families can get access to these funds that they are entitled to.”

Arizona Superintendent Tom Horne has repeatedly stated the department lacks sufficient staff to thoroughly review every voucher purchase in a timely manner. In 2024, he implemented a policy to automatically approve any voucher expense under $2,000 without initial review to address mounting backlogs and ensure families received reimbursements, which had been delayed for months in some cases.

Democrats have consistently raised concerns about a lack of oversight within the ESA program, which now costs the state over $1 billion annually. They highlighted Horne’s automatic approval policy and reporting by 12News suggesting the rate of inappropriate purchases by voucher families may be significantly higher than the department acknowledges.

Gress countered that Democratic support for the bills would provide the necessary resources to enhance program monitoring. “Haven’t we heard from a lot of folks that we need more eyes on these purchases?” he asked.

However, Democratic lawmakers argue the state previously provided the department with $10 million specifically for hiring additional staff three years ago, but the funds were instead used for advertising the ESA program.

“And instead of administering that, hiring more people, looking at how to explore waste, fraud, and abuse and prevent it, they decided to advertise the program,” said Representative Nancy Gutierrez (D-Tucson).

Gutierrez referenced a series of television commercials featuring Horne that began airing in 2023, encouraging Arizona residents to enroll in the ESA program. John Ward, the department’s ESA program director, told lawmakers in a committee hearing earlier this month that the legislature had designated the $10 million for the commercials.

“The $10 million that was given to the Department of Education — my understanding was that it primarily was to market the program and for advertising,” Ward said.

According to department spokesman Doug Nick, the funding originated from a budget deal in 2023 where Republican legislative leaders allowed individual lawmakers to earmark $10 million for specific projects. Senator Janae Shamp (R-Surprise) used a portion of her allocation to fund ESA marketing campaigns, a detail confirmed by Horne in statements to the Arizona Republic in 2023.

“The Democrats’ claim is false,” Nick said. “In 2023, when lawmakers were each allowed to earmark $10 million as part of the budget deal, Sen. Shamp made it very clear to Supt. Horne that her $10 million was intended for ESA advertising.” Nick provided emails showing the department updating Shamp on the television spots purchased with the funds in August 2023, to which Shamp responded, “Thank you for sending.”

Gutierrez, however, contends that lawmakers were misled about the intended use of the funds, pointing to legislative budget documents that describe the $10 million as an “administration funding increase” for operating expenses, with no mention of advertising or marketing.

“So they spent $10 million on advertising the program to get more people using the program without ever taking time to explore how people might abuse this program,” Gutierrez said.

Any additional funding for the Arizona Department of Education’s voucher program, including the bills proposed by Gress, will require the approval of Democratic Governor Katie Hobbs. The governor’s office has indicated she will not support additional funding unless it is coupled with broader voucher reforms favored by Democrats. Earlier this year, the governor’s office stated Hobbs would not approve new money for Horne’s office unless it was attached to other, broader voucher reforms backed by Democrats.