Mayes says 'litigation is not off the table' over school voucher policies

Democratic Attorney General Kris Mayes is investigating Republican schools Superintendent Tom Horne over his handling of public money that flows into the state’s school voucher system, which costs around $1 billion annually.

The superintendent of Public Instruction is charged with administering the school voucher program, also called Empowerment Scholarship Accounts, which are currently used by nearly 100,000 Arizona students to attend private schools or pay for homeschool expenses.

Late last year, as the office faced a huge backlog, Horne adopted a new policy directing his office to automatically approve voucher reimbursements for purchases up to $2,000 and audit them later.

Mayes, who has long criticized the decision, sent a letter to Horne earlier this year demanding he reverse the policy.

“No public official is allowed to permit taxpayer dollars to be misspent,” Mayes said. “And I think there are real serious questions about whether allowing $2,000 to be spent on lingerie and diamond rings is a misspending of taxpayer dollars. I mean, obviously it's a misspending of taxpayer dollars.”

On Tuesday, Mayes told reporters she is investigating whether the policy violates state law by allowing taxpayer funds to be used to buy items that fall outside the bounds of the voucher program, pointing to reporting by 12News that found some ESA families used voucher dollars to pay for high-end resorts, lingerie, high-end furniture and jewelry.

“We are looking at potential public monies violations by both Tom Horne and the parents who use the money in that way,” Mayes said.

Prosecutorial discretion

The attorney general said her staff has been in regular contact with Horne’s office.

“And so what I would say is litigation is not off the table, but we are really pushing him hard to make reforms that would prevent that misspending of taxpayer dollars,” Mayes said.

Horne denied any wrongdoing.

“We have implemented counter-fraud measures. Every ESA purchase over $2,000 is audited before payment and we use risk-based auditing, which is provided in state law, to audit purchases under $2,000,” he said. “The department has recovered more than $400,000 in funds to date. The Attorney General is well aware of this because we have communicated these and many other facts to her office.”

And he called Mayes a hypocrite, claiming she declined to prosecute multiple cases of potential voucher fraud referred by his office totaling $158,000, including “$14,000 for vaginal probiotics and other lifestyle items, $64,000 for crystals and more than $80,000 for technical items such as laptops.”

Mayes’ office has prosecuted several high-profile cases against people accused of defrauding the voucher system, including a case against former Department of Education employees that Horne said was referred by office during a press conference in 2024. A jury ultimately found one former employee not guilty in that case while several other defendants pleaded guilty.

Horne also said his office flagged unusual activity by two Colorado residents, who were prosecuted by Mayes and later pleaded guilty to using fake birth certificates to defraud the voucher program.

Horne claimed his office has recovered hundreds of thousands of dollars by auditing the purchases in question after the fact.

In response to Horne’s allegations, a spokesman for the Attorney General’s Office said referrals are evaluated based on the reasonable likelihood of a conviction.

“If we have declined to prosecute a case it is because the referral does not meet our standard for prosecution,” spokesman Richie Taylor said in a statement.

He said the attorney general currently has eight active investigations into potential voucher fraud and two cases pending review.

“We will continue to investigate and prosecute cases with sufficient evidence to bring criminal charges,” Taylor said. “In the cases referenced by Superintendent Horne, while the spending certainly seems inappropriate, they did not meet the standard for criminal prosecution.”

ESA reforms

Horne portrayed Mayes’ criticisms as attempts to undermine Arizona’s robust universal voucher system, which has been a target for Democratic officials since former Republican Gov. Doug Ducey and the state legislature expanded the program to cover all students in the state in 2022.

“There are two people in this state who are trying to silently kill the ESA program, the attorney general and governor,” Horne said.

Mayes called on lawmakers, specifically the Republicans who control the state legislature, to pass reforms to the voucher program to close loopholes that allow for questionable spending.

The issue is likely to be a hot topic during the upcoming legislation session, which begins in January.

Democratic Gov. Katie Hobbs entered office in 2023 calling to roll back the universal expansion approved by her predecessor, Ducey, that expanded the program to every student in the state rather than just students at underperforming schools and those living with disabilities.

When that effort failed, the governor pursued more modest reforms, but Republican lawmakers have largely resisted those calls, framing those attempts to claw back the program as an attack on school choice.

Legislative budget staff estimate the program will grow to over 109,000 students by 2027 and cost $1.18 billion.

Hobbs already said she plans to re-up her attempts to curb the universal voucher program in order to free up money to pay for other priorities.