A Federal Scholarship Program Is Expanding Across the Country & Arizona Just Opted Out

While states across the country are signing on to a new federal scholarship tax credit program, Arizona will sit it out, not because lawmakers rejected it, but because the governor did.

Senate Bill 1142, sponsored by Senator Shawnna Bolick (R-AZ), would have allowed taxpayers to claim a federal tax credit for donations made to scholarship-granting organizations.

Supporters argued the measure carried no new state cost, instead unlocking private funding to help cover a range of K-12 education expenses, including tutoring, special education support, curriculum materials, technology, and transportation.

The bill also included a provision requiring that at least 90 percent of all contributions be directed to student scholarships, with the intent of keeping dollars focused on educational purposes.

Due to the veto, Arizona will not participate in the program while other states move forward.

"This was a missed opportunity for Arizona families—especially low-income, disabled, and underserved students who need more options to succeed," said Sen. Bolick. "Parents are asking for flexibility and support, and this decision closes the door on resources that could have helped meet their children's unique needs."

Bolick also noted that the program has attracted bipartisan support in other parts of the country, including in states with Democratic governors such as Colorado.

"This should not be a partisan issue," Bolick said. "Other states are recognizing the value of giving families more control over their child's education. Arizona has been a leader on school choice, and turning this down puts us behind at a time when parents are looking for real solutions."

The governor's office has not issued a detailed public statement outlining the specific reasons behind the veto. However, Hobbs has previously expressed concerns about measures she believes divert resources away from the traditional public school system.

The veto adds to an already tense relationship between Hobbs and Republican legislators, coming the same day the governor announced a sweeping bill-signing moratorium tied to the ongoing state budget standoff.