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.

Another Biggs looks to enter the family business

From State Affairs, written by Reagan Priest -

For Andy Biggs, Arizona elections are a family affair

U.S. Rep. Andy Biggs, who is running in the Republican primary for governor, might not be the only member of the Biggs family hitting the campaign trail in Arizona next year.

Mylie Biggs, the Congressman’s daughter, filed a statement of interest to run for Senate in Legislative District 14 to fill the vacant seat left by Senate President Warren Petersen, who is term-limited and running for attorney general. 

Mylie currently works at the Arizona Free Enterprise Club.

The rest is behind a paywall.

She filed a statement of interest on 6/18 -

She formed a committee for the run on 6/20 -

If she wins election to the state legislature, we may learn the answer to one question -

Does the Arizona Free Enterprise Club issue 1099s to its pet legislators, or do they just use brown paper bags?

As of right now, she's only candidate for LD14 State Senate (no SOIs or committees), but it's early still.

The highest priority of the Arizona legislature seems to be welfare for the wealthy

While the Republicans in the Arizona State Senate and the Republicans in the Arizona State House are involved in a bit of tiff over the state's budget (crafting competing budget proposals), they agree on one thing - public monies should be used not for public benefit, but for lining the pockets of the already wealthy.

Neither budget proposal reins in the state's budget-busting school voucher/ESA program.

Also, HB2704 is still alive.  That bill originated in the House, but was amended in the Senate.  As such, it has to be returned to the House for them to approve the changes.  Since those changes make a heretofore bad bill worse (for the public, anyway), I expect them to do so, maybe even doing so before they vote on a budget.

The bill is all giving public money to billionaire Ken Kendrick.

From Fourth Estate 48 on Substack -

Amended Chase Field Deal Still Favors Team, Raises Long-Term Taxpayer Burden

Arizona lawmakers advanced a heavily amended version of HB2704 late last night, significantly reshaping the stadium financing bill but retaining many of the same concerns raised in earlier versions. While the new amendment adds clearer oversight and more guardrails, it ultimately extends and inflates public funding for Chase Field upgrades — offering the Diamondbacks flexibility while placing a larger long-term burden on Arizona taxpayers. The Senate didn’t vote until very late, but approved it with bipartisan support 19-11. The bill now awaits a House vote — which won’t happen until at least Monday, as lawmakers adjourned without taking action on the $17.6 billion budget package.

Waahhh!

Pro tip: If you're a politico who doesn't like being thought of as dirty, don't conduct witch hunts looking for whistleblowers.  It's not a good look.

From Phoenix New Times, written by T.J. L'Heureux, dated 4/17/2025 -

Scottsdale mayor sues to find out who snitched on her about Parkingate

Embattled Scottsdale Mayor Lisa Borowsky really wants to know who ratted her out.

Despite being in office for only a few months, Borowsky has already become the center of a controversy over a planned parking garage in Scottsdale. Dubbed “Parkingate,” the brouhaha stems from Borowsky's alleged efforts to yank a garage project away from one developer and hand it to David Hovey Jr., a campaign donor.

[snip]

On Monday, Borowsky filed a public records lawsuit against the county attorney’s office, complaining that the agency had not fulfilled a records request to uncover the identity of her accuser. She is being represented by right-wing lawyer Dennis Wilenchik, who is also her former employer.

[snip]

Days later, the county attorney’s office received an anonymous complaint detailing “concerns” about Borowsky’s attempt to change plans and give her donor a contract. Borowsky has denied doing anything wrong, a position that jives with the conclusion the county attorney’s office reached on March 14.

The case number is CV2025-013199 and the judge is the case is slated to be Adam Driggs, a former state legislator.

Insert your own punch line.

Lousy human being says that others being decent shouldn't be, or else

From KJZZ, written by Greg Hahne (emphasis added by me) -

Horne says Kyrene School District in Tempe risks losing federal funds over draft policy

On Tuesday, the Kyrene School District in Tempe preliminarily approved a social and emotional wellness workplace cultures policy for its staff. It still awaits a final vote.

Arizona Superintendent of Public Instruction Tom Horne says it could risk the district’s federal funding.

[snip]

Horne says the policy’s mention of Diversity, Equity and Inclusion is the issue.

"I think what Kyrene has done is outrageous on two fronts, number one: they are going to forfeit a lot of money for their kids education. They’re not really representing the interests of their students. Number two: they’re doing something that I think is wrong philosophically," Horne said.

Horne may be philosophically opposed to DEI, but, apparently, he's not opposed to cheating on his wife or committing crimes to conceal that fact.

Want to get out of paying hundreds of millions to bilked investors? Just buy a pardon from Cheeto.

Normally, I don't use this blog/outlet to write about the misdeeds of Cheeto, et. al. (that's what I use the social media app Bluesky for), but this one has Arizona ties.

From The Copper Courier -

Convicted of bilking investors, founder of Phoenix-based Nikola gets a presidential pardon

Nikola, which was a hot start-up and rising star on Wall Street before becoming enmeshed in scandal, filed for Chapter 11 bankruptcy protection in February.

Trevor Milton, the founder of electric vehicle start-up Nikola who was sentenced to prison last year for fraud, was pardoned by President Donald Trump, the White House confirmed Friday.

The pardon of Milton, who was sentenced to four years in prison for exaggerating the potential of his technology, could wipe out hundreds of millions of dollars in restitution that prosecutors were seeking for defrauded investors.

Milton, 42, and his wife donated more than $1.8 million to a Trump re-election campaign fund less than a month before the November election, according to the Federal Election Commission.

There are other links to Cheeto.

From later in the same story -

During his securities fraud case, Milton was defended by two lawyers with connections to Trump: Marc Mukasey, who has represented the Trump Organization; and Brad Bondi, the brother of Pam Bondi, who Trump appointed as U.S. Attorney General.

According to FEC records, Milton gave millions to Cheeto, RFK Jr., state and national Republican parties, state and national Libertarian parties, and Republican candidate all over the country.

Based on the pardon, it seems to have been money well spent.

Legislative schedule - week starting 3/30/2025

This week runs the gamut of bad behavior from the legislature - some bad bills, some sneakiness, and putting out propaganda while using taxpayer-funded resources.

Note: HHR refers to a hearing room in the House building; SHR refers to one in the Senate building.

Note2: Generally, I'll only specify bills that look to spread propaganda.  Other bills may be more conventionally bad (think: corrupt or other misuses of public monies and/or authority).  My recommendation is that if an agenda covers an area of interest to you, read the entire agenda.

Note3: Each chamber's respective Rules Committee meets on Monday, the House's in HHR4, generally at 1 p.m. and the Senate's in Senate Caucus Room 1, generally also at 1 p.m.  Both committees serve as rubber stamps for bills leadership wants to be advanced and gatekeepers for measures that leadership wants stopped.

Note4: Meeting start times may be listed, but are flexible.  Before journeying to the Capitol or viewing the meeting online, verify the start time.

Note5: Watch for strikers, or strike everything amendments.  Those involve inserting language that replaces the entirety of a bill.  Those can be introduced at any time and can make a previously harmless bill become a very bad one. 

On Monday, 3/3 

-

House and Senate Rules meet at 1 p.m. in their respective rooms.  On the agendas: many bills.  They may meet more than once this week, but, as of now, they're on the schedule once.

House Appropriations meets at 10 a.m. in HHR1.  On the agenda: 30 proposals, 12 of which have strikers proposed for them.  Includes David Livingston's striker proposed for SB1061 that would raise pay for legislators from Maricopa County;  Matt Gress' striker to SB1299, creating the "Safe Community Enforcement Fund" from monies in the "Smart and Safe Arizona Fund," created by AZ voters when we approved recreational marijuana.  Also includes SB1369, appropriating $2M from the state's General Fund for enhancing the recruitment of law enforcement personnel...which may seem too bad, until you realize that the requirements listed for some of the money are so specific as to constitute a way to get around the fact that the legislature is barred from creating legislation to requires a state agency to enter into a single source contract.

The measure failed in House Public Safety and Law Enforcement, was withdrawn from that committee, and is now on an Appropriations agenda.  On that agenda, 13 proposals, including this one, may be subject to a mass motion.

Senate Military Affairs and Border Security meets at 1:30 p.m. in SHR109.  On the agenda: no bills, one presentation.

On Tuesday, 4/1 

-

Senate Appropriations meets at 9 a.m. in SHR109.  On the agenda: 15 bills.  Two bills have proposed strikers.  One is a proposal to appropriate $100K to train employees of group home to spot child sex trafficking. Also includes HB2918, which is about reducing state and local revenue; and HB2794, which is about redirecting tax money from the public to the Arizona Diamondbacks.  The fiscal note attached to the bill states the local governments wouldn't be harmed by the bill.  

Other people, not controlled by the legislature, including Phoenix mayor Kate Gallego, disagree.

On Wednesday, 3/2 - Nada.

On Thursday, 3/3 

-

House Ad Hoc Committee on Blaming Governor Hobbs for All That Ails Arizona Executive Budget Mismanagement meets at 8:30 a.m. in HHR4.  On the agenda: no bills.  One presentation from JLBC on the Division of Developmental Disabilities (DDD).

Also on the agenda: inquisitions of questions for the directors of AHCCCS and DES.

There's been a lots of posturing from the legislature over their desire to cut funding that helps the underprivileged, perhaps to distract from their desire to protect funding for ESAs (school vouchers) for the wealthy.

Hobbs isn't having it.

GOPer legislators lied? I'm shocked! Shocked, I say!

That was sarcasm, for folks who aren't regular readers - I'm not really shocked.

From KJZZ, written by Howard Fischer of Capitol Media Services -

9th U.S. Circuit: GOP lawmakers acted with discriminatory intent when adopting new AZ voting laws

A federal appeals court concluded there is evidence Arizona legislators acted with discriminatory intent when they approved some 2022 laws requiring proof of citizenship to vote.

In a 79-page ruling, the 9th U.S. Circuit Court of Appeals said federal law decides who can vote in federal elections. And that, wrote Judge Ronald Gould for the majority, supersedes legislation approved by Republican lawmakers to deny a ballot to those without such proof.

In many ways, Tuesday's ruling is not a surprise. It affirms what U.S. District Court Judge Susan Bolton concluded two years ago.

"Acted with discriminatory intent" is judge-speak for "you're full of shit", but because of their wish to adhere to their profession's decorum, they couldn't say that directly.  I'm not a professional, so I can -

The GOPS in the AZ legislature were (and usually are) full of shit.

As judges are also trained attorneys, it took them 79 pages to be tactful.

I recommend reading the entire article - there are good parts of the article; too many to cite here.

Some say the AZ lege is sneaky. I say sneaky and shameless are two sides of the same coin.

A few weeks ago, I posted about "poison pill" clauses inserted into proposals from certain members of the AZ legislature, calling out Sen. John Kavanagh by name.

It's not just him - the latest example wasn't proposed by him.

HB2123, scheduled for committee consideration by House Public Safety & Law Enforcement on next Monday has such a clause.

It comes from that rather fetid mind was sponsored by Rep. Julie Willoughby and and cosponsored by Reps. Leo Biaisucci, Michael Carbone, and (House Speaker) Steve Montenegro.

It purports to add "religious leaders" to the list of people who are eligible to have their documents held "confidential" (not subject to public access).

(Note: the blue print is the proposed new language)

I think that's a bad idea - because I believe a private person isn't entitled to public consideration because of their private choices, and a career choice that doesn't make one a public servant (or the spouse or child of certain ones) is a private choice.

However, that's a matter for discussion.

But the bill's sponsor didn't stop there (if only) (emphasis added by me) -

That highlighted clause is (more than) a little broadly written.

Some enterprising lawyer will look at the lack of the word "religious" next to most of the words, and the commas separating the words and argue that the language applies to corporate CEOs/presidents.

Of course, if that attorney truly believes that the language only applies to heads of religious organizations, that person will argue that corporate CEOs/presidents head organizations that worship wealth.

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?