Arizona Made Every Child Eligible for an ESA, How the Idea Spread So Fast

Great reforms rarely arrive as great reforms. They arrive as small exceptions, passed quietly, for a few families nobody is fighting over. Then the exception works, and the argument for keeping it small starts to sound strange.

That is the story of the education savings account. In 2011 Arizona created a program for children with disabilities. A decade later it had made every child in the state eligible. This post tells that history with dates, explains what an ESA is and how it differs from a voucher, and draws the lesson a conservative should take from the speed of it.

The claim

The education savings account spread so quickly because it solved a problem the older choice programs could not: it let money follow a child to many kinds of education, not only a single school, and it did so under a constitutional design that survived legal challenge. I will build that case in steps, in order.

Vouchers and ESAs, defined

A voucher is a payment, usually made by the state directly to a participating private school, that covers some or all of a child's tuition there. The family chooses the school, the school gets the money and the family never touches it.

An education savings account, or ESA, works differently. The state deposits money into an account that the family controls, up to a cap that is usually a percentage of what the state would have spent on the child in a public school. The family may then spend the money on a range of approved education expenses: private school tuition, tutoring, curriculum, therapy services for a child with special needs, online courses, and in some programs, savings for college. In most programs the family can roll over unspent funds.

Why does the difference matter? Three reasons.

1. Flexibility. A voucher buys a seat in a school. An ESA buys an education, which can be assembled from several parts. For a child with a learning disability, that might mean a therapist, a tutor and a part-time program. For a homeschooling family, it might mean curriculum and instruction in subjects the parents cannot teach.
2. Incentives. The family has a reason to shop and to spend carefully, because what is not spent stays in the account.
3. Law. An account controlled by a family, from which the family chooses to pay a school, sits differently in a constitutional analysis than a check sent straight to a religious school. We return to that below.

2011, the first program

In 2011, the Arizona Legislature created the program that became known as Empowerment Scholarship Accounts. Its original eligibility was narrow: children with disabilities who attended or were eligible to attend public schools. A family that took part gave up its right to a public school placement and instead received a deposit into a state-supervised account, in the original design a large share of the state funding the child would have generated in a public school. The family spent the money on approved services and education expenses and reported on its use.

The program was modest. By one report it had 144 participants in 2012. Its premise, though, was a large one: that the state's obligation to a child is an obligation to educate him, not to place him in a particular building, and that the family is in a better position than the system to decide what works.

Challenged in court, and upheld

Arizona's constitution has a provision, as do many state constitutions, that restricts the use of public money for religious instruction. Opponents of the program sued, arguing that families could use the accounts to pay for religious schools. In Niehaus v. Huppenthal, the Arizona Court of Appeals rejected the challenge in 2013, reasoning that the money went to families who chose how to spend it, and the state did not direct it to any religious institution. The Arizona Supreme Court declined to review the decision.

That result mattered for the whole country. It was consistent with a line of United States Supreme Court decisions, including Zelman v. Simmons-Harris (2002), which held that a school-choice program that is neutral toward religion and in which aid reaches religious schools only through the independent choices of parents does not violate the federal Establishment Clause. State-level restrictions have been more complicated, and I will not pretend each state's constitution is the same. But Arizona's result became a template.

The expansions, 2012 to 2017

Once the program existed and worked, the Legislature widened it, step by step. Over the following years it extended eligibility to several groups. Among them were students in schools assigned a low state performance grade, children of active-duty military families, children in foster care, and children living on tribal lands. Each expansion was defensible by itself. Each addressed a group that the district system had been failing or that had special reason to need flexibility. And each sent a message to lawmakers in other states: the sky does not fall when you let a family choose.

This is the pattern I mean by the exception that wins its own argument. When you let a program in for the hardest cases and it works, the question changes. It stops being "should any child be allowed to leave" and becomes "why only these children."

2017 and the referendum of 2018

In 2017, the Legislature passed a bill to open the ESA program to all students over a phased period, with an overall cap on the number of participants. It was a universal program in principle, with a ceiling on its size. Opponents, including the teachers unions and a coalition of public-school advocates, gathered signatures and put the law to a referendum.

That is an important detail, and conservatives who believe in self-government should not skate past it. In November 2018, Arizona voters rejected the expansion. The measure was Proposition 305, and it was defeated by a margin of roughly two to one. The people voted, and they said no.

I will not tell you the defeat was a fluke. It was a real result, and it shows how well-organized the opposition was and how powerful the argument was that the program would drain money from district schools. The campaign against it said that private choice means less for the public system.

That argument is the one the whole movement had to answer, and it is worth stating at its strongest: public schools have fixed costs, and when a student leaves with a share of funding, the school loses revenue without a matching reduction in expense. For a district that is already struggling, the loss is real. I respect the point, and I will answer it in a moment.

2022, universal anyway

Four years later, in 2022, the Legislature passed and the governor signed House Bill 2853, which made every school-age child in Arizona eligible for an ESA. No cap. No category. Any family that wanted to leave the district system could take the account.

How did a program that lost at the ballot box in 2018 become law in 2022? Part of the answer is that opponents again gathered signatures to refer the law to the ballot, and according to press reports the petition drive fell short of the valid signatures it needed, so the law took effect. I would urge you to consult the Arizona Secretary of State's records and the court filings on the details, because the count was disputed. The other part of the answer is that the political ground had shifted. Families had experience with remote schooling, the closures of 2020 and 2021 had shaken many parents' trust, and the idea that parents should direct their children's education had become a mainstream demand. See What the Long School Closures of 2020 and 2021 Taught Parents.

The sequence is a lesson, too, about reading a political result. A defeat in 2018 on a capped expansion did not settle the question for all time, any more than a victory in 2022 does. Policy is made in a conversation that continues. The wise advocate respects the voters' earlier answer by showing, in practice, why the question deserved another look.

2023, the wave

The next year, 2023, brought a rush of statehouse activity. Several states adopted programs that made all or nearly all students eligible for state-funded accounts or similar benefits: Utah, Iowa, Arkansas and Florida all enacted universal or near-universal laws that year. Their designs differ, in funding formulas, phase-in schedules, rules about which expenses qualify, and whether a program is formally an ESA or a related tax-funded scholarship. Florida, in particular, built on a long history of choice programs, as did the other states in different ways.

I will not give you the details of each statute, because they change as legislatures amend them and because several have faced or are facing court challenges under state constitutions. If you want the current status of your state, go to the legislature's website and read the statute and any pending litigation. The point is the pace. Programs that began in 2011 as a narrow exception for a few hundred children had become the template for state after state within twelve years.

Why it spread so fast

Four reasons, in my judgment, with the caveat that policy diffusion has many causes.

1. It worked in the field. Arizona's program ran for years and became a visible example. Legislators in other states could point to it and ask questions of people who had run it.
2. It fit conservative principles. It respects parental authority, uses market-style incentives, and does not require the government to run the school.
3. It was legally durable. The structure, a family-controlled account, protected it in many courts better than programs that sent the money straight to a particular school.
4. The coalition widened. Early choice programs drew the support of low-income families in failing urban districts and of conservatives. ESAs added families of children with disabilities, rural families, military families and homeschoolers. A broader coalition is a harder one to defeat.

The objections, answered

A fair treatment owes the reader the best objections and an honest reply. Here are three.

First: it drains money from public schools. The answer has two parts. A public school's funding is meant to educate children, and when a child leaves, the obligation to educate him leaves too. The adjustment is real, and a sensible state will phase it in, with transition support for districts that lose students quickly. But the premise that the funding belongs to the system and not to the child reverses the order of things. The money was collected from taxpayers for the purpose of educating children, and it is a legitimate question whether it must be spent in one kind of building.

Second: there is not enough accountability. Public schools face state testing and reporting rules, and an ESA family spends its own judgment. The reply is that accountability can take different forms. Program rules can require that families spend on approved categories and keep records, that the state audit a sample, and that participating schools be open about their results. Parents are the first accountability: they can leave when a school fails. The experience of the long-running programs suggests that fraud and misuse are real risks that require auditing, and a state should have one.

Third: it favors families who already have means. The accounts are usually capped at a sum below what a private school with high tuition would charge, and early evidence from several states suggests that a large share of participants in some programs were already in private school, which is a legitimate worry about cost. The reply is to design the program to reach the families who need it, with weighted funding for children with greater needs, and to publish the data on who participates.

Those are real problems for legislators to solve, and I think they can be solved.

Where this fits

If you want to see a different way of funding choice, with no appropriated state dollars, look at Tax-Credit Scholarships, the Choice Program Built on Private Donations. If you want the intellectual ancestor of all of this, it is Milton Friedman's 1955 Voucher Essay and Its Seventy-Year Road, and the story of the Milwaukee legislator who put the idea into practice is in Polly Williams, the Milwaukee Democrat Who Started the Voucher Movement. The way geography shapes choice is covered in Your ZIP Code Picks Your Child's School, the Case for Open Enrollment, and the objection from rural communities, which is among the most serious, is in School Choice Fails Rural Kids? Here Is the Rural Objection Answered.

There is a Founding point, too. The framers left education to the states and to the people, not because they thought it unimportant, but because they trusted families and communities to know their own children. Federalism is the reason Arizona could try this idea in 2011 without asking the permission of fifty other legislatures, and the reason other states could look and decide for themselves. Justice Brandeis called the states laboratories of democracy, and in this case the laboratory produced something worth copying. We say more in Federalism Lets Fifty States Experiment, and the Constitution Planned It.

The case in brief

1. An ESA deposits state funds into an account a family controls, usable for tuition, tutoring, therapy and other approved education costs, which makes it more flexible than a voucher paid to a school.
2. Arizona created the first Empowerment Scholarship Account program in 2011 for children with disabilities, and its structure survived a state-court challenge in Niehaus v. Huppenthal in 2013.
3. The Legislature widened eligibility in steps, passed a capped universal law in 2017 that voters rejected as Proposition 305 in 2018, and enacted universal eligibility in HB 2853 in 2022.
4. In 2023 Utah, Iowa, Arkansas and Florida enacted universal or near-universal programs, showing how fast a working idea can travel among states.
5. The objections about funding, accountability and who benefits are serious, and a good statute answers them in its design.

What you can do: read your own state's ESA or choice statute on your legislature's website, then ask a state legislator which features of Arizona's program they would copy and which they would change.