Hobbs should opt Arizona in to scholarships for 1.1 million students

Gov. Katie Hobbs should opt Arizona into the Education Freedom Tax Credit now, because Arizona families cannot access it unless the state opts in¹. Riley Gaines posted the warning on Oct. 16:

The American Federation for Children, a school-choice group that says it has passed more than 200 laws across 32 states, says those 1.1 million eligible students can receive scholarships only if Arizona opts in². On Oct. 14, Kelly called the program “a bad idea,” said it “drains resources from schools and benefits the wealthy,” and wrote, “I'm fighting to stop it so we can keep improving our public schools”; KTAR reports he is co-sponsoring the Keep Public Funds in Public Schools Act to repeal the credit. KJZZ reporter Wayne Schutsky explained that the credit is “not taking money directly away from public school funding. It's taking it just from private donors who decide that they want to lower their tax liability.”

1.1 million

The credit can serve public school students

The credit gives taxpayers a dollar-for-dollar federal credit of up to $1,700, or $3,400 for married couples filing jointly, for gifts to scholarship granting organizations. Treasury says it launches Jan. 1, 2027, and that the scholarships can pay for tutoring, special-needs services, books, supplies and computers as well as private-school tuition¹.

Chad Wilson, superintendent of the East Valley Institute of Technology in Mesa, said its students now pay for costly program supplies themselves: “our students have to come out of pocket for those dollars so they can be part of the program.”³

$1,700

Treasury has issued the rules Hobbs awaited

Hobbs vetoed Senate Bill 1142, which would have opted Arizona in, and wrote that “It is irresponsible to sign this bill before the federal government has released any regulatory guidance.”⁴ Her spokesman, Christian Slater, told KJZZ the governor had no position yet: “The administration is waiting for the federal government to share implementation guidelines on the program.”³

On Oct. 1, Treasury and the IRS issued proposed regulations and companion temporary regulations setting procedures for states and scholarship organizations¹; the federal guidance Hobbs cited is now public.

Hobbs's veto letter also asked for “guardrails.”⁴ The Treasury rules include annual reporting and audits for scholarship organizations, unique donor numbers, and procedures for removing organizations that fail the requirements¹.

Scottsdale Unified Superintendent Scott Menzel said of the rules, “Let's see the rules in September and if the rules are such that we can truly benefit and our students can benefit from this, then I would hope that the state would move forward and opt in.”³ The rules are out, so what is the governor still waiting for?

Private donations can support public school students

Treasury describes the credit as “the first federal tax credit supporting private contributions for K-12 scholarships,” so the money comes from donors, not from a district's budget line¹. Menzel told KJZZ the credit could take pressure off school budgets for tutoring, after-school programs, books and supplies, and estimated his Scottsdale district could raise $3 million just by getting its own employees to opt in³.

The American Federation for Children estimates 2,607,265 Arizona tax filers, 74.6 percent, are eligible to donate and claim it². KJZZ reports that 30 states are participating, including Democratic-run New York and Colorado³. If their governors can take the program, why should Arizona parents be denied it?

Hobbs should opt Arizona in before year-end

The calendar is short: the credit starts Jan. 1, 2027, and a Department of Education fact sheet says participating states must provide a list of qualified scholarship granting organizations by Jan. 1³. At an Aug. 25 event in Mesa, Congressman Andy Biggs criticized Hobbs for not joining, saying, “families and students will not have the opportunity to take advantage of these dollars to help fund a better education for their kids.”

The American Federation for Children estimates that if 10 percent of Arizona taxpayers participate, the credit could generate $554.8 million in scholarships every year². That is tutoring for a struggling reader, services for a child with special needs, and supplies a family no longer pays for alone.

Hobbs should opt Arizona in before the year ends so eligible Arizona students can receive scholarships when the credit launches Jan. 1.

Sources

1. The Trump Administration Advances the Establishment of America’s First Nationwide School Choice Program | U.S. Department of the Treasury
2. The Education Freedom Tax Credit: Arizona
3. Arizona public school advocates are split over Trump's $1,700 'Big, Beautiful' school voucher
4. Federal education tax credit opposed by top Arizona Democrats - KTAR.com