The Goldwater Institute on Tuesday announced it has filed a lawsuit against the Arizona Department of Education on behalf of several families who participate in the state’s Empowerment Scholarship Account program. The Institute claims that the families have suffered from the Department’s mishandling of the program.
In December, the Institute sent a letter to the Arizona Department of Education (ADE) advising that the practice of requiring parents to have their prior quarterly expense reports approved before they get the funding to which they’re entitled was a violation of state law.
The Institute also argues that the ADE’s “creation of its ESA Handbook, which includes dozens of rules that parents must follow to participate in the program — but which was written without following the procedures required by the Arizona Administrative Procedure Act.”
According to the Institute, the Arizona Administrative Procedure Act, “requires agencies to go through a process whenever they create new rules—a process that includes extensive input from the public. The Department must first publish its proposed rules, and allow both written and spoken input from citizens and organizations that might be affected by those rules. It must also provide information about how the rule will affect the public, and submit information to the Governor’s Regulatory Review Commission, for its review.
The Institute claims that ADE adopted the Handbook without consulting the public.
The Institute also takes exception to a 2017 finding by the Attorney General that the Handbook does not list rules parents must follow but merely offers a set of explanations for the process.
Complaint excerpt:
1. This case challenges the unlawful adoption of policies and procedures by which the Arizona Department of Education (“ADE”) governs the Empowerment Scholarship Account (“BSA”) program. The plaintiffs-Arizona parents and their special-needs children-participate in this program.
2. The policies and procedures and rules promulgated by the ESA program have been adopted by the ADE without following the statutorily required notice and comment procedures. This robs those who are subjected to the rules and comments of their right to a voice in how they are governed in contravention of the Arizona Constitution. It also denies the court of a proper record that would allow for a substantive review of the rule maker’s decisions to ensure that the rules are not arbitrary, capricious, or an abuse of discretion pursuant to A.RS.§ 12-910(E).
3. The ESA program was established to enable parents of special-needs children to exercise greater freedom of choice in obtaining educational services for their children. Through that program, participating families are empowered to send their children to private schools, to obtain special tutoring services, or to home-school their children, with the funds that would otherwise have been spent on their children in a government-funded school.
4. However, ADE has adopted a series of rules, found primarily (but not exclusively) in its ESA Handbook, by which it governs the ESA program. These rules restrict the rights of parents and impose a series of limitations on participating parents that deprives them of choices, financially hinders both the parents and children, undermines the program, and violates Arizona law. Specifically, the ESA Handbook contains a set of rules that were not promulgated through the procedure required by the Administrative Procedure Act, and are therefore unlawful. This lack of a substantive record robs the court of the ability to perform a substantive review even to find that these rules and regulations put forth by the Arizona Department of Education are valid because there is no properly created record.
5. These invalid rules and regulations cover a broad expanse of areas from conditioning payments to parents on ADE’s approval of expense reports for past expenditures under the ESA, to limiting the amount of money parents are allowed to spend on certain categories of expenses, and even requiring parents to “repay” funds under certain. circumstances as determined by ADE administrators. None of these rules are lawful, due to violations of the Administrative Procedure Act.
6. In addition, ADE is routinely late in making payments to parents pursuant to their ESA contracts. These late payments result in injuries to parents and their children, who are denied stability in their educational services because the BSA denies them the right to pay out of pocket when ADE is late in funding accounts without forfeiting the right to reimbursement. These parents are required to make late payments which can lead to late-payment fees that the program does not cover pursuant to the handbook. In addition parents suffer from lost credibility with service providers, and may lose their places in tutoring programs and lessons. Some are denied services all together or their children begin to experience delays in their academic and skill set advancement because ADE has failed to timely perform within the contractually obligated timeframe that it designated when it crafted the contracts.
7. Plaintiff parents seek remedies including an injunction and declaratory relief to forbid ADE from imposing these rules, restrictions, and costs on them; and equitable relief to require ADE to comply with the applicable statutes.