Gov. Katie Hobbs vetoed a bill on Monday which would have opted Arizona into a federal tax credit program to fund private school scholarships.
When federal lawmakers passed H.R.1, also known as the One Big Beautiful Bill, last year, they established a new tax credit. Individuals in states that opt into the program can get $1,700 worth of tax credits for donating to Scholarship Granting Organizations.
SGOs are nonprofits which fund private school tuition scholarships for K-12 students.
The credit is a federal school choice program which wouldn’t cost the state anything to take advantage of and is supported by Arizona Republicans.
The state already has a universal private school voucher program in place called Empowerment Scholarship Accounts. It’s not clear how the federal and state programs would coexist if the state ever does opt in.
Hobbs said in her veto letter that it would be irresponsible to join now before the federal government has created clear regulatory guidance.
“We have seen what happens when these types of programs lack accountability, transparency, and oversight. I hope the administration ensures any federal school choice program will have the much-needed guardrails Arizona’s ESA program lacks,” Hobbs wrote.
Bill sponsor, Sen. Shawnna Bolick (R-Phoenix), said the bill, SB 1142, shouldn’t have been a partisan issue.
She called Hobbs’ veto foolish.
“With the veto, that means that whenever these programs start popping up in other states around us taxpayers here can get a tax credit at the federal level to send their dollar to Texas, Louisiana, Virginia, Florida, Tennessee, et cetera,” Bolick said.
Bolick noted that the state doesn’t really need legislation if the governor is willing to opt into the program, which goes into effect at the beginning of next year.
She said lawmakers will try again.
“If there are ways to draw down dollars and keep them in Arizona, that’s a good thing,” Bolick said.
Bolick also noted there are some Democrats, including former Secretary of Education Arne Duncan who are supportive of the federal program.
Democratic Colorado Gov. Jared Polis opted the state into it despite the opposition of many legislative Democrats there.
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