By Howard Fischer
Capitol Media Services
MESA -- The nation's top education official came to Arizona Tuesday to prod Gov. Katie Hobbs to allow Arizona parents and students have access to an additional source of free education funds.
At an event with partisan overtones, Education Secretary Linda McMahon said a provision of the "One Big Beautiful Bill'' approved by the Republican-controlled Congress last year allows individuals to contribute up to $1,700 a year -- double that for married couples -- to organizations that would grant scholarships that could be used at both public and private schools. Donors get a dollar-for-dollar credit against any federal taxes owed.
Only thing is, the law requires the governor of each state to opt-in to what are known as Education Freedom Tax Credits. Without that, Arizona students will be ineligible for the scholarships that begin in January.
And to date, Hobbs has refused. In fact, she actually vetoed legislation more than once seeking to force her to join.
"It is irresponsible to sign this bill before the federal government has released any regulatory guidance,'' Hobbs wrote in one veto message. "We have seen what happens when these types of programs lack accountability, transparency, and oversight.''
The Democratic governor said she wants to be sure there are "much-needed guardrails,'' the kind she said that are missing in the state's own Empowerment Scholarship Accounts. There have been multiple reports about abuse of that program which provides at least $7,500 a year for students to attend private and parochial schools, including purchases of non-educational items like trips to theme parks, kitchen appliances and even jewelry.
"It can pay for tutoring in Florida, but it can't pay for tutoring in Flagstaff,'' said House Speaker Steve Montenegro who also was at the event. "It can support a student with special needs in Utah but it can't in Yuma,'' said the Goodyear Republican.
McMahon said there will be oversight, though the U.S. Treasury and the Internal Revenue Service, which are charged with coming up with guidance, has yet to issue its final rules. Those are due at the end of September.
But the education secretary said there's really no reason for Hobbs to balk.
She pointed out that 30 states already have decided to participate. That includes Colorado which, like Arizona, has a Democratic governor.
Even New York's Democratic Gov. Kathy Hochul announced she plans to have her state join the program, though the final papers have not yet been signed. That would make 31 states.
Gubernatorial press aide Christian Slater said what is happening elsewhere is not relevant to Hobbs balking.
"She's not paying attention to other governors,'' he said. "She wants to see how the federal government will administer the program.''
But McMahon pointed out the program set to start at the first of the year. Any delay in the governor penning her approval translates to time that Arizonans don't have access to the dollars.
Anyway, she said, if Hobbs is unhappy with the program, any decision she makes is not forever.
"You're not signing on for life,'' the secretary said. "You can sign off and opt out of the program if it's not working for you.''
And there's something else.
McMahon noted that the program involves no state dollars at all. Nor does any money spent on these scholarships mean less money for public schools in Arizona.
Put simply, she said, there's no reason for Hobbs to balk.
Slater refused to respond.
"We're sticking with our original statement,'' he said.
The other side of all this is what the state -- or at least its students -- have to lose if Arizona does not join.
As approved by Congress, the program is not just about private and parochial school students, though the dollars can be used for that.
Students in public schools also can take advantage of scholarship funds for everything from hiring tutors to books and equipment that isn't covered by the state.
That point was driven home by Chad Wilson, superintendent of the East Valley Institute of Technology which offers career and technical education to students from area school districts.
In most cases, he said the state pays the tuition. But not all students qualify, including adults who have graduated from high school and and upgrading skills or changing careers.
But that's just part of it.
"All of our programs carry with it supplies,'' Wilson said.
"And in some programs those supplies are significantly pricey because the industry requires them to be pricey,'' he said. "And our students have to come out of pocket for those dollars so they can be part of the program.''
Wilson said that having scholarship funds available to pick up the costs can be crucial.
"Because, at the end of the day, the pathway to the American dream isn't just through college,'' he said. "It can be through one of the 52 programs we have here.''
The law starts with those $1,700 donations -- $3,400 for couples filing jointly -- that can go to any one of what are expected to be multiple "scholarship granting organizations'' that can be set up in each state.
Each of these SGOs must be set up as a charity, has to be approved by the governor and each must give out at least 90% of what they collect. Funds have to be given out to 10 or more students who do not attend the same school. And donations cannot be earmarked for specific students.
Eligibility is limited to students from households with income that does not exceed 300% of the area median household income, a figure that varies from county to county.
According to 2024 figures from the Census bureau, that median is $80,266. It's higher elsewhere, like $89,300 in Maricopa County and lower in places like $72,966 in Coconino, $62,876 in Yuma, Pima at $70,315, $69,613 in Yavapai, and $57,684 in Mohave.
Strictly speaking, Arizona taxpayers can contribute to an SGO -- and get that federal tax credit -- even if Hobbs does not opt in. But those dollars would go to an SGO in another state, meaning none of the money donated by Arizonans would go to Arizona students.
"It can pay for tutoring in Florida, but it can't pay for tutoring in Flagstaff,'' said House Speaker Steve Montenegro who also was at the event.
"It can support a student with special needs in Utah but it can't in Yuma,'' said the Goodyear Republican. And since it takes no money away from the state or impose a new tax, he said, the governor's refusal "makes no sense to me.''
There was a decidedly political element in the event -- and not just because McMahon works for Trump and that the federal law was passed on a party-line vote.
And not a single Democrat in the Arizona Legislature supported the mandate to opt in. Rep. Nancy Gutierrez, D-Tucson, said during debate her concern is that public money would be going to schools with no oversight.
"I don't think thousands of dollars of tax credit money should be going just out the door with no thought to where it's going, if students are being educated, if classrooms have a teacher who is certified, if there is any thought to safety and fingerprint clearance,'' she said.
Montenegro, who has been a major proponent of all forms of funding for school choice, including private and parochial schools, said there's an opportunity for Arizonans who support the program to have some influence.
"They can have their voice loudly heard in November,'' he said, noting the governor's multiple vetoes. "And they can elect a new governor, Andy Biggs.''
The Republican gubernatorial hopeful, invited to the event, took the opportunity to criticize his Democratic foe.
"Because of her refusal to join this visionary program, families and students will not have an opportunity to take advantage of these dollars to help fund a better education for their kids,'' Biggs said.
—--
On X, Bluesky, and Threads: @azcapmedia
