ESA scandals are getting the press right now (as they should be), but don't ignore the budget-busting effects of School Tuition Organizations (STOs)

While the trend of recipients of ESA/school vouchers misusing the public money they've been given has gotten a lot of press coverage recently (it's gotten so bad that AZ Superintendent of Public Instruction Tom Horne appeared on Channel 12's Sunday Square Off to defend his failures.  Of course, his "defense" was a desperate attempt to shift the blame on to certain Democratic women, like Governor Katie Hobbs, Attorney General Kris Mayes, and his predecessor as SPI, Kathy Hoffman), the Republican majority in the AZ legislature is adamant in their refusal to do anything to rein in that misuse of public funds.

Maybe that refusal is rooted in the myriad, often internecine, ties that R members of the legislature have to STOs and charter schools.

The are 90+ STOs that have been certified to receive donations for individual income tax credits and 90+ STOs that have been certified to receive donations for corporate tax credits (there is a LOT of overlap between the two) (the lists have URLs that indicate they are from 2023, but the lists were updated on 8/8/2025).

Certain legislators reported (on their financial forms) their ties to STOs and private/charter schools -

From State Representative Michael Way:

Charter schools seem to be a profit center for the Way family

From House Speaker Steve Montenegro:

From Representative David Marshall:

He doesn't specifically call it (the STO) out, but the church was certified (allowed) to accept tuition tax credit donations from 12/16/2022 to 9/30/2023 .

From Representative Alexander Kolodin -

Arizona School Choice Trust (ACST) received more than $71m is tuition tax credit donations from CY98 thru FY24.

From Senator Shawna Bolick -

Not only does she work for Choose A School, her organization has strong ties to Kolodin's ACST.

From Choose A School's website -

There's a reason that I used the word "internecine" earlier.

Of course, the person  who may find STOs and School Tuition tax credits the most lucrative is former legislator Steve Yarbrough.  

According to records from the Arizona Corporation Commission (ACC), he's part of two organizations that are certified to receive STO donations.

While the the address for ACSTO goes to a PO box, many STOs list their addresses as PO boxes or private mail drops.  In and of itself, that's not evidence of criminal behavior.

On the other hand, the address for School Choice Arizona goes to a building that's owned by Yarbrough, according to the Maricopa County Assessor.  That org doesn't have to go far to talk to its landlord.

The two Yarbrough organizations collected nearly 17% of the millions of dollars given to STOs in FY2024 (the latest year for which data is available.)

AZ Department of Revenue annual reports on STO tax credits are here.

One interesting development:

This organization, Simply STO, is one that I couldn't find in ACC records.  However they may be registered under a different name, so to use a phrase I've used before - in and of itself, that's not evidence of criminal behavior.

The org's website does not list any names or even a phone number.  Their contact page is a contact form, and not even an email.  Again, that's not evidence of criminal behavior.

Lastly, the address they give tracks back to a "rent a desk" place designed to give small organizations a cheap street address.  Again, that's not evidence of criminal behavior.

Taken together though, it is interesting and begs a few questions.

Arizona's ESA scam: the names may change, but the grift goes on

In at least one instance, the name *did* change, but the grift did not.

From ProPublica, dated 12/31/2024 -

Reporting Highlights

• An Opaque System: Arizona imposes no transparency or accountability requirements on private schools that receive taxpayer dollars through the state’s voucher program.
• Buyer Beware: Voucher parents shopping for a school say it’s hard to obtain independently verified information on the quality of instruction or financial stability of private schools.
• Opposed to Reform: As other states replicate Arizona’s program, voucher advocates oppose requiring publicly funded private schools to meet the same educational standards as public schools.

One afternoon in September, parents started arriving for pickup at Title of Liberty Academy, a private Mormon K-8 school in Mesa, Arizona, on the eastern outskirts of Phoenix.

Individually, the moms and dads were called in to speak to the principal. That’s when they were told that the school, still just a few months old, was closing due to financial problems.

[snip]

For instance, the state never informed parents who were new to Title of Liberty and were planning to spend their voucher money there that it had previously been a charter school called ARCHES Academy — which had had its charter revoked last school year due to severe financial issues. Nor that, as a charter, it had a record of dismal academic performance, with just 13% of its students proficient in English and 0% in math in 2023.

[snip]

Arizona does no vetting of new voucher schools. Not even if the school or the online school “provider” has already failed, or was founded yesterday, or is operating out of a strip mall or a living room or a garage, or offers just a half hour of instruction per morning. (If you’re an individual tutor in Arizona, all you need in order to register to start accepting voucher cash is a high school diploma.)

There is “nothing” required, said Michelle Edwards, the founder and principal of ARCHES and then of Title of Liberty, in an interview with ProPublica. It was “shocking how little oversight” the state was going to provide of her ESA-funded private school, Edwards said.

ARCHES is now Ethos Foundation (actually, when using the website of Arizona Corporation Commission [ACC], clicking on ARCHES inactive listing pulls up Ethos' information), and Edwards is listed as a director, President, and CEO of Ethos.

Also from the article -

One mom had even discovered the school by window shopping: It was in the same strip mall as her orthodontist’s office, next to a China Palace, and she’d noticed the flags outside with Church of Jesus Christ of Latter-day Saints imagery. (The school was not formally affiliated with the church.)

[snip]

For instance, the state never informed parents who were new to Title of Liberty and were planning to spend their voucher money there that it had previously been a charter school called ARCHES Academy — which had had its charter revoked last school year due to severe financial issues. Nor that, as a charter, it had a record of dismal academic performance, with just 13% of its students proficient in English and 0% in math in 2023.

A storefront operation with earlier financial and academic issues continuing to have issues?  And the taxpayers picking up the tab?

Is anyone shocked that it continued to operate?