Arizona : Epicenter of the ESA Movement

In April 2011, Arizona Governor Jan Brewer signed into law SB 1553, creating Arizona Empowerment Accounts. The first of their kind, Empowerment Accounts allow parents—in this case, parents of special-needs children—to remove their children from the public-school system and receive the money the state would have spent on them in an education savings account. Every quarter, the state deposits up to 90 percent of the base support level of state funding into a parent-controlled ESA.[2] Parents can then use that money to pay for a variety of educational options including private-school tuition, private tutoring, special education services, homeschooling expenses, textbooks, and virtual education, enabling them to customize an education for their child’s unique needs. Parents may also roll over funds from year to year, and they can use the money to invest in a 529 plan to pay for college tuition in the future.[3]

When a family decides to take advantage of Arizona Empowerment Accounts, a parent must sign an agreement stating that the parent will not enroll his or her child in a public school or public charter school and will use the child’s ESA funds to provide social studies, math, reading, and science instruction. Arizona contracts with financial management firms to manage the accounts for a 3 percent fee, and any unused ESA dollars return to the state after college graduation or four years after the child graduates from high school.[4]

In Arizona, the amount of money parents can receive annually in an ESA depends on their child’s disability classification. According to the Arizona Joint Legislative Budget Committee, “pupils qualifying for the highest ‘Group B’ weights in A.R.S. [Arizona Revised Statutes] §15-943 currently can cost the state $30,000 per year, whereas special education pupils with ‘mild’ disabilities can cost the state $5,000 annually.”[5] Nearly 90 percent of private schools in Arizona also offer some form of financial aid, which could further facilitate access to a quality private school when combined with ESA funding.[6]

While access to the current Arizona education savings account program is limited to children with special needs, there is no cap on the number of children who can participate.[7] As a result, it is estimated that up to 17,000 children with disabilities will benefit from Arizona Empowerment Accounts.[8] State Senator Rick Murray (R–Glendale), who sponsored the Arizona Empowerment Account Act, noted that the ESAs now available to Arizona’s special-needs students could “become the template for providing the same option to more than one million students now in public schools.”

For the rest of the article, go to Education Savings Accounts: A Promising Way Forward on School Choice