Arizona Superintendent of Public Instruction Tom Horne had “no vision” of the potential cost of the state’s universal voucher system prior to its launch, he said during a recent interview.

Arizona Empowerment Scholarship Accounts, also called ESAs, let parents use state funding to pay for their child’s educational needs. The accounts are administered by the Arizona Department of Education and can be used to pay for tuition at private schools, educational supplies, tutoring, homeschooling and many other educational needs.

The vouchers used to only be available only to students with disabilities and their siblings, foster kids and military families, but in 2022  state lawmakers expanded ESA eligibility to all K-12 students.

But lawmakers perhaps underestimated the demand for the program and costs soared.Idaho Education News reported last month that Arizona has spent $800 million and counting on the program since the expansion, eclipsing initial projections.

Horne and Republican lawmakers have fought back against claims that the program could bankrupt the state, but it’s unclear from a recent interview with KVOI’s “The Bill Buckmaster Show” how much analysis actually went into the expansion.

“I had no vision of it at all,” Horne said during his January 17 appearance. “All I felt was that parents should be able to choose the best education for their children. Rich people have always been able to do that. This enables people of all income levels to do that.”

Gov. Katie Hobbs took shots at the ESA program during her State of the State speech days before, saying there are no guardrails to protect against waste, fraud and abuse.

Horne told Buckmaster that he gave Hobbs an “F” on her speech, saying her claims are completely false.

“Since I took office, I've done a lot to make sure we do not have fraud. I hired an auditor, which the program never had before. I hired an investigator,” Horne said. “I have insisted that every expenditure be for educationally valid purposes and a reasonable cost.”

Horne said he’s come under attack by critics who said he should let parents buy whatever they want, but that he’s “responsible for the ethics and the propriety” of the program and won’t be funding any request that’s not for a valid educational purpose.

But the program’s volume quickly overwhelmed staffers assigned to review reimbursement requests. The Phoenix New Times reported in December that the department had amassed a backlog of 89,000 purchases waiting to be reviewed, leading to a 72-day wait time for families to receive payment.

He blamed the situation on Hobbs, saying that reimbursement times were at about 30 days until the governor signed a law last summer requiring ESA holders to use the state’s contractor to pay for all school tuition. Since not all schools are set up to receive payment through Class Wallet, the number of reimbursements “exploded.”

“The legislature has not given us the personnel to deal with that. We would have to deal with 500 requests a day and … we can only deal with 200 requests a day, so it just became an impossible situation” Horne said. “I can't be responsible for a situation where people wait 100 days to get reimbursed. It was a terrible provision … and we're asking the legislature this year to repeal it.”

As a short-term solution to the long wait times, Horne announced last month that the department would change the way reimbursements are processed, with purchases under $2,000 auto-approved under a system called risk-based auditing.

With risk-based auditing, the state has the ability to look at the expenses at a later time and “claw back” if it finds any improper spending, which Horne said it has done before.

He has faced backlash for the decision, with some believing this opens the door for more people to commit fraud and that the state will never actually conduct audits. Others fear repercussions for families who could be found years later to have improperly used the vouchers and ordered to return thousands of dollars.

The program has also faced criticism that it’s primarily wealthy families who are cashing in on the vouchers and that ESA don’t give most lower-income families enough money to cover  private school tuition.

Horne conceded that when the program was first expanded to all Arizona families, the people who were quickest to cash in were those who already had their children in private schools.

“But that's been changing over time. Now we have at least half of our students who were in public school and whose needs were not being met. More and more you'll find that it's kids from poorer families that are using the ESAs rather than these rich people,” he said. “Many schools have tuition at the $7,000 or $8,000 level, which is the level at which we reimburse.”

The state is tracking the number of ESA users who were previously enrolled in public schools, but Horne said privacy issues prohibit them from asking about income.

And while many people still question the impact of universal vouchers on public schools amidst declining enrollment and claims of increased costs, Horne is steadfast in his belief that they’re beneficial to schools.

“Competition is good for everybody,” he said. “That’s why the United States was prosperous and the Soviet Union was poor, because we have competition and people work hard to compete and they produce a lot, and they can consume a lot.”

Caitlin Schmidt is Editor and Publisher of Tucson Spotlight. She previously worked for the Arizona Daily Star and has been reporting on Southern Arizona for a decade. Contact her at caitlin@tucsonspotlight.org.

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