Under a 1984 law, qualified high school students may enroll in higher education courses for both secondary and college credit. The student or the state covers the cost depending on the program.[1]

In 1993, in a 5 to 4 decision, the Supreme Court of the United States supported public aid to a disabled student attending a religious school in the case of Zobrest v. Catalina Foothills School District. The case involved a deaf child whose parents sought a sign-language interpreter under provisions of the Individuals with Disabilities Education Act (IDEA). Several lower courts ruled with the school district that the parents' request would violate the Establishment Clause of the U.S. Constitution. However, the Supreme Court ruled that the aid to the student (financial assistance for the interpreter's services) did not violate the Constitution. Chief Justice Rehnquist, writing for the majority, found that IDEA creates a neutral government program dispensing aid not to schools but to individual handicapped children. If a handicapped child chooses to enroll in a sectarian school, we hold that the Establishment Clause does not prevent the school district from furnishing him with a sign-language interpreter there in order to facilitate his education.[2]

Arizona's School Improvement Act of 1994 remains the nation's strongest charter school law, according to the Center for Education Reform. Any citizen, group, or organization may apply for a 15-year charter from the Arizona State Board of Education, the Arizona State Board for Charter Schools, or the local school board. The state's charter schools have broad fiscal and legal autonomy. Like the state's other public schools, charter schools submit annual report cards to parents and the Arizona Department of Education. In addition, charter schools are audited annually.[3]

On April 7, 1997, then-Governor Fife Symington, a Republican, signed House Bill 2074, allowing residents to receive a tax credit for donations to charitable organizations that give scholarships to children to attend private or religious schools. Currently, an individual can receive a tax credit of up to $500, and a married couple can receive a credit of $625, for donations to a private tuition scholarship program. Individuals donating to public school extracurricular activities can receive a tax credit of up to $200.[4]

The Arizona Education Association (AEA), the state affiliate of the National Education Association, made several attempts to overturn the law. Partnering with the PTA, the League of Women Voters, People for the American Way, the Arizona School Boards Association, and the Arizona Democratic Women's Association, the AEA attempted to collect signatures from registered voters to place a referendum on the tax credit on the November 1998 general election ballot. Had they succeeded in getting the requisite number of signatures, these groups could have kept the tax credit law from going into effect at least until after the election.[5] In July 1998, however, opponents of the tax credit stopped their petition drive and focused instead on a lawsuit they had filed, contending that the law violated the state constitution.[6]

On January 26, 1999, the Arizona Supreme Court upheld the tax credit plan in a 3-2 ruling. The majority found the program neutral with regard to religion and beneficial to poor families who have been "coerced into accepting public education." Chief Justice Thomas Zlaket, writing for the majority, declared that the poor have had few choices and little control over the nature and quality of their children's schooling because they have been unable to afford a private education that may be more compatible with their own values and beliefs.... Arizona's tax credit achieves a higher degree of parity by making private schools more accessible and providing alternatives to public education.[7]

The Arizona Education Association appealed the case to the Supreme Court of the United States, which in October 1999 refused to consider it.[8]

From 1998 to 2002, the tax credit program generated $56 million and financed nearly 36,000 scholarships.[9] More than 80 percent of scholarship recipients were from lower-income families.[10] A Cato Institute report found the credit to be revenue-neutral; the public school system saves money when students who had been educated at public expense leave the system to attend private schools, and these savings offset the revenue loss from the tax credit.[11]

In March 1999, the Arizona House of Representatives passed H.B. 2279, which would have enabled parents of students who qualify for free or reduced-price school lunches to send their children to a public, private, or religious school of choice. Based on a plan submitted to the legislature in January by then-State Superintendent of Public Instruction Lisa Graham Keegan, the bill would have given poor students scholarships of about $5,000 or the cost of tuition, whichever was less, to attend a school of choice. The bill did not make it through the Senate.[12]

Another school choice bill introduced during the 1999 session, Senate Bill 1371, would have provided state-funded vouchers to students in public schools that were filled beyond capacity. The bill died in Senate committee.[13]

An Arizona American Civil Liberties Union affiliate filed suit in 2000 against the tax credit program in federal District Court of Arizona on grounds that it violated the Establishment Clause. The court dismissed the suit, Winn v. Hibbs, under the Federal Tax Injunction Act that forbids federal courts to interfere in state tax policy.[14]

In March 2001, the Goldwater Institute reported that spending two to three consecutive years in an Arizona charter school had a greater positive impact on students' math and reading test scores than did spending comparable time in a traditional school. This finding is based on the Stanford 9 achievement test scores of students in charter and public schools from 1997-1999. Moreover, there was no evidence that charter schools accepted only the best students or encouraged the worst-performing students to leave.[15]

In 2001, H.B. 2252, which would have authorized "opportunity scholarships" to enable students in low-performing public schools to attend a private school or another public school of choice, died in a House committee. A Senate committee rejected S.B. 1560, which would have given vouchers to students whose parents determined that a school was unsafe for their child because of gang activity, a history of violence, or students' drug use.[16]

In 2002, the Ninth Circuit Court of Appeals reversed Winn v. Hibbs and the U.S. Supreme Court agreed to hear the case.[17]

During the 2002 legislative session, S.B. 1560, a bill from the previous session that would have allowed students to transfer from unsafe schools, was reintroduced as S.B. 1127. It was rejected in committee.[18]

A pair of bills introduced during the 2002 legislative session, H.B. 2368 and H.B. 2394, would have weakened the state's tuition tax credit program. H.B. 2368 would have prevented taxpayers from claiming a tax credit if their contributions to a school tuition organization (STO) were designated for any specific student, including their own child. It also would have required school tuition organizations to report the amount of donations received, how the money was spent, and the number of students served. H.B. 2394 would have placed reporting requirements similar to those of H.B. 2368 on STOs and public schools that received contributions for extracurricular activities. Both bills died in House committees.[19]

An April 2002 study that included an evaluation of Arizona charter schools found that competition engendered by increased school choice raises school productivity as well as student achievement in public schools. The report's author, Harvard economist Caroline M. Hoxby, Ph.D., found that the introduction of even a small amount of competition--such as the possibility that a school could lose 6 percent of its students to a neighboring charter school--sparked a statistically significant improvement in school productivity.[20]

S.B. 1263, introduced in 2003, would have created a tax credit for corporations that donate to tuition scholarship organizations that aid low-income students. The bill was passed by the Senate but lost in the House by a vote of 27 to 31.[21] Also introduced this session was S.B. 1240, which would have forced contributors to scholarship organizations to claim either the public or private school tax credit--not both. The bill was defeated by a vote in the Senate Education Committee in early February.[22]

H.B. 2260, which would have provided a tax credit worth $1,500 to home-schooling families, also died in committee.

Voucher legislation was introduced in 2003. Under S.B. 1141, a new A Plus Literacy Voucher Program would award publicly funded scholarships to students who perform poorly on state tests or who have a disability, and parents would submit voucher applications to the Arizona Department of Education. The bill died in committee.[23]

In June 2004, the U.S. Supreme Court upheld 5-4 the Ninth Circuit Court of Appeals decision to reverse the dismissal of Winn v. Hibbs. The ACLU suit was sent back to the U.S. District Court to be heard again. The Institute for Justice is intervening on behalf of a family whose children attend a private school of choice through a grant provided through donations under the Arizona scholarship tax credit.[24] On March 24, 2005, Federal District Court Judge Earl Carroll dismissed the ACLU's lawsuit against the state's Education Tax Credit program.[25]

Parental choice legislation received serious attention in the 2004 legislative session. Voucher bills S.B. 1109, S.B. 1110, and H.B. 2537 and tax credit bills S.B. 1280 and H.B. 2623 received votes. Charter school and home-school legislation were signed into law.

On April 7, 2004, the House Education Committee voted 6-5 to replace the original language of a Senate-passed bill with legislation to provide low-income students with scholarships worth 80 percent of the public per-pupil amount. Under S.B. 1109, parents would have been able to add their own funds to the scholarship amount. The legislation also guarded against state or local regulation of private schools. The bill passed in the House Appropriations and Rules Committees before being narrowly defeated by the House 27-30 on May 25. Earlier in the year, the House Education Committee defeated a similar proposal, H.B. 2537, by a 6-6 vote. Under H.B. 2537, all Arizona students would have been eligible for scholarships.

The House of Representatives passed H.B. 2623, a bill to provide corporate tax credits for donations to a private school scholarship foundation on March 15. The Senate Finance Committee passed the bill on April 8, but it received no further consideration. The Senate Finance Committee also approved the Senate companion bill, S.B.1280, but it, too, received no further attention.

The Senate Education Committee defeated S.B. 1110, a bill that would have provided vouchers worth 80 percent of the average per-pupil expenditure, by a 5-3 vote.

On June 9, the House amended S.B.1405 to increase the tax credit for married couples from $625 to $1,000. The amendment, however, was removed before final passage.

The Arizona legislature amended H.B.2369, a non-education-related bill, to require the Arizona Board of Regents to guarantee home-schooled students receive equitable access to the state's public colleges. The bill was signed into law.[26]

In April, the governor signed into law H.B.2255 which enables charter school sponsors to request the Arizona Department of Education to withhold up to ten percent of the monthly apportionment of state aid if the charter is out of compliance with federal or state law or the charter agreement.[27]

Researchers published new findings on parental choice during 2004. A Goldwater Institute study of 873 charter and traditional public school students found that, on average, charter school students started school with lower scores but achieved overall annual academic growth three points higher than their traditionally schooled peers. According to "Comparison of Traditional Public Schools and Charter Schools on Retention, School Switching, and Achievement Growth," by Lewis C. Solmon and Pete Goldschmidt, twelfth grade completers at charter schools also exceeded traditional students.[28]

Another paper, "The Rugged Frontier: A Decade of Public Charter Schools in Arizona" by Bryan C. Hassel and Michelle Godard Terrell, confirms positive trends in the state's charter school program, including a high number of high-performing schools and strong parental satisfaction. Slightly more than 40 percent of charter schools were "highly performing" or "excelling" compared to 26.6 percent of traditional schools. To spur even better results, the report suggests a number of solutions. Among them are better procedures for closing "poorly performing schools," an increase in individual school data for informed parental decisions and a "support system" in order to reproduce high-quality charter schools.[29]

A group of eight Arizona legislators introduced H.B. 2378 in January 2005. The bill would have allowed corporations to take a tax credit of up to $10,000 on donations to scholarship organizations serving low-income students. The scholarships could be worth up to $4,200 for students in K-8 and $5,500 for high school students.[30] H.B. 2379 replaced H.B. 2378 and removed the limit on the tax credit while limiting the total amount of the credits to $10 million in 2006, rising by $5 million annually. Companies would be allowed to donate up to $10,000, after which they would be required to get approval from the state Department of Revenue.[31] That bill passed the full House on March 24.[32] The Senate companion is S.B. 1176, which the State Senate approved in February by a 16-13 vote. The governor vetoed the bill at the end of March.[33]

Also in January 2005, Representative Dean Martin (R-6) introduced S.B. 1085, which would have allowed universities to authorize charter schools.[34] The House passed the bill on April 13 by a 42-16 vote, with two members abstaining, and the Senate passed the bill six days later on a 16-12 vote, with two abstaining. Gov. Napolitano vetoed the bill on April 25.

Also in February, six state Senators were the primary sponsors for S.B. 1506, which would provide vouchers for Arizona students.[35] A version of this bill has been put before lawmakers in each of the past 11 years. Vouchers for students in kindergarten through eighth grade would be worth up to $3,500, while vouchers for high school students would be worth up to $4,500.[36] On March 14, the bill passed the Senate by a vote of 16-12 and has been sent to the House for consideration.[37] In early April, the bill's supporters faced strong opposition in the House and are attempting to put the program on the ballot in the 2006 election.[38]

A poll conducted in late March and sponsored by the Friedman Foundation found that six out of ten Arizona residents supported tuition tax credit programs. The poll also found that six in ten respondents approved of a voucher program for kindergarten students.[39]

In April 2005, Representative Tom Boone (R-4) introduced H.B. 2782, which would increase funding for the state's full-day kindergarten program, create a voucher program for low-income students, and create tax credits for corporations that donate to scholarship granting organizations. The vouchers would be worth up to $3,500, with 1,500 slots available in the program's first year.[40] The bill passed the House 31-27 on May 2, with 2 members not voting, and it passed the Senate two days later 16-13, with 1 member not voting. Gov. Napolitano vetoed the bill on May 9.

The tax credit and kindergarten proposals were carried over in a compromise on the state budget between the Republican-led legislature and the Democratic governor. The tax credit provision would have allowed couples to donate up to $1,000 toward scholarship-granting organizations, an increase of nearly $400 over current law. Tax credits would also have been afforded to corporations, capped at $5 million annually state-wide.[41] The governor vetoed the tax credit proposal on May 20.[42]

In June, the Arizona State Board for Charter Schools filed a lawsuit against the U.S. Department of Education over a rule declaring that for-profit charter schools will not receive federal funding for Title I and special education services but are required to provide these services.[43] Fifty-two charter schools and some 12,000 students could be affected by the new rule.

Shortly after the lawsuit was filed, U.S. Rep. Jim Kolbe (R-AZ) added an amendment to the Department of Education's FY 2006 appropriations bill (H.R. 3010) that would reverse the Department's policy on for-profit charters. The bill passed the House on June 24, 250-151, with 32 Members not voting.[44]