Catholic scholarship group urges Arizona to join federal tax credit program, underscores governor’s race stakes
Democratic Gov. Katie Hobbs has vetoed measures to join the program, while Republican challenger Andy Biggs has pledged to opt in.
Catholic Education Arizona is highlighting how the state’s gubernatorial election could shape access to Catholic school scholarships, saying the outcome could determine whether Arizona participates in a new federal program that encourages scholarship donations through a tax credit.
In an Oct. 21 statement, the scholarship organization said Arizona has not opted into the Education Freedom Tax Credit, which launches Jan. 1, 2027.
“If Arizona participates, this new federal tax credit could help expand access to a quality Catholic education for the underserved, disabled, and foster students in Arizona, changing a child's life forever,” the group said.
The organization, which describes itself as the largest scholarship provider for families attending Catholic schools in the Diocese of Phoenix, says it has raised $408 million and awarded 165,000 scholarships since 1998.
In fiscal year 2026 alone, Catholic Education Arizona raised $25.2 million through state tax credit contributions and other donations and awarded 3,737 K-12 scholarships, according to an October update. The organization supports students attending 38 diocesan schools.
As Zeale News previously reported, Democratic Gov. Katie Hobbs has vetoed three measures that would have allowed Arizona to participate. Republican challenger Andy Biggs has pledged to opt in.
In an April 13 veto letter, Hobbs said joining before the federal government released regulatory guidance would be “irresponsible,” citing concerns about accountability and oversight. Her spokesman told Phoenix NPR affiliate KJZZ in August that she had not taken a final position.
After the Treasury Department and Internal Revenue Service (IRS) released proposed regulations Oct. 1, 35 Republican lawmakers in the state renewed their request that Hobbs opt in.
Biggs, by contrast, made participation an explicit pledge in his Sept. 22 campaign platform, listing it first under his plans to “Protect Education Freedom.” He has also vowed to protect Arizona’s Empowerment Scholarship Accounts.
Under the Treasury’s proposed regulations, eligible taxpayers could claim an annual dollar-for-dollar federal income tax credit of up to $1,700 for qualifying cash donations to approved scholarship granting organizations, or up to $3,400 for married couples filing jointly. The organizations would use those contributions to provide scholarships for eligible K-12 students.
States must elect to participate and identify eligible scholarship organizations. Taxpayers can contribute to an approved organization in a participating state regardless of where they live, meaning Arizona residents could support scholarships elsewhere even if their own state does not join.
Catholic Education Arizona said supporters can continue contributing through Arizona’s existing state tax credit programs and that it is preparing to accept donations under the federal program if Arizona opts in.
CatholicVote has also urged voters in Arizona, Michigan, and Wisconsin to elect Republican gubernatorial candidates who have pledged to participate, as their Democratic opponents have so far withheld support.
>> 3 gubernatorial races in key states could shape access to Catholic school scholarships <<
“Though many parents would like to provide their children with the excellent formation and strong community for which Catholic schools are renowned, tuition costs are often out of reach,” CatholicVote President and CEO Kelsey Reinhardt said in the release.
She called the tax credit a “game-changer,” noting that it “reduces the tax burden for contributors, opens doors for lower-income families and builds up local Catholic school communities.”
“But none of this can happen in states that refuse to participate,” Reinhardt continued. “That’s exactly why these gubernatorial races are so important.”
Thirty-one states have so far made decisions to formally opt in to the program: Alabama, Alaska, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.
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