Arizona school vouchers cost taxpayers more per student

Arizona school vouchers cost taxpayers more per student, but Republicans say they don’t

by Caitlin Sievers, Arizona Mirror – January 30, 2024

The Republicans in charge of the Arizona Department of Education and the state Senate say that the state’s school voucher program saves taxpayers money, and that any statements to the contrary are myths. 

But the numbers say something different. 

During a tense press conference at the Capitol Tuesday morning, Senate President Warren Petersen, a Queen Creek Republican, accused most of the journalists who asked questions about the expanded universal school voucher program of being biased and perpetuating false narratives. 

As Republican Superintendent of Public Instruction Tom Horne spoke about what he called “myths” about the Empowerment Scholarship Account program, also known as ESA, he was interrupted with calls of “liar” and “tell the truth” from members of Save Our Schools Arizona, an advocacy group for public schools. 

Horne said that ESA vouchers make private schools, which were always available to rich people, also accessible to low-income students, leveling the playing field when it comes to school choice. 

“ESAs are not a threat to public schools,” Horne said. “It’s time for the constant attacks on ESAs to stop.” 

Before the ESA voucher expansion in 2022, the voucher program only had about 12,000 enrollees, with eligibility limited to students with special needs, foster kids and those whose parents were in the military or who attended public school that is designated as failing.

Legislative analysts initially estimated that only 25,000 more students would take part in the expanded program, which uses state funding to pay for any K-12 student to attend private school or to be homeschooled. 

Horne claims that the ballooning cost of the voucher program did not have an impact on the state’s roughly $460 million budget deficit, and that each student who leaves the public school system for an ESA actually saves the taxpayers money. 

The current year’s budget initially estimated the program’s cost at $625 million with a total enrollment of 68,380 students, but revised estimates place this year’s cost at around $723.5 million with an enrollment of more than 74,000. That’s almost $100 million more than initial estimates. 

The real reason that ESA vouchers didn’t impact the budget is because the state overestimated how many students would attend Arizona public schools this year and allocated more money than necessary to the education budget, projecting a public school enrollment of around 16,700 more students than actually showed up. 

Horne released information during the press conference showing that the Arizona Department of Education currently has a surplus of $28.5 million due solely to those inflated student counts. But Save Our Schools Arizona later pointed out that the surplus number was based on an original allocation for the ESA program in this year’s budget of $740 million. The actual original allocation was $624 million, putting the department $96 million in the hole by the end of the year.

ESA vouchers were initially designed to transfer 90% of the cost of educating a student in a traditional public school to the voucher, thus saving the state money. But several years ago, GOP lawmakers changed that formula and now base the vouchers on 90% of what the state pays to charter schools for each student. And because charter schools aren’t able to tax local property, their per-student payment from the state is substantially higher than for district schools. 

And Horne sidestepped the fact that a significant portion of students who use the universal ESA vouchers never attended a public school at all, meaning that funding for their schooling is a completely new cost to the state. That wasn’t lost on public school advocates.

“Those are all new costs to the state and they are just ignoring that fact because it’s inconvenient for their narrative,” Beth Lewis, executive director of Save Our Schools Arizona, which opposes ESA vouchers, told the Arizona Mirror. 

While Horne says that 59% of students currently using ESAs previously attended public schools, Gov. Katie Hobbs’ office has estimated that around 50,000 out of the 74,000 students who receive the universal vouchers never went to public school. If Hobbs’ numbers are correct, that would mean around 67% of those enrolled in ESA never attended public schools. 

Petersen claimed that media reports on the ESA program disregarded the fact that it saves money for taxpayers, since the state pays around $7,500 apiece for an ESA student and each public school student is funded at around $14,600. But those numbers are not apples-to-apples comparisons. 

With funding for special needs students included, the cost of the average ESA is around $9,800 and excluding federal and local funding, the state pays around $10,900 for each public school student. And the state doesn’t pay directly for students in the vast majority of school districts. Instead, the state only pays if a district isn’t able to meet the basic funding levels through local property taxes.

The picture becomes more complicated when factoring in fixed costs to public school districts that don’t change when a handful of students leave, as well as when considering how different public schools are funded. 

School funding consultant Anabel Aportela found that ESA vouchers cost the state on average $486 more for every elementary student and $601 for every high school student than for a public school student, 12 News reported. 

And in school districts with a wealthy property tax base that don’t receive state aid, the full cost of the ESA voucher is new state spending, since the public school funding in those districts comes primarily from local property taxes, and not the state. 

Aportela found that the state only saves money from ESAs when a student leaves a charter school to use the program, saving the state between $770 and $860 per student. 

But Petersen railed against those figures, and media reports that rely on them.

“It’s an absolute myth that ESAs are costing more than public schools,” he said during the press conference. 

Petersen claimed that, even if it’s not saving the state money, it’s still saving the taxpayers money since schools that don’t receive state aid are primarily funded through local property taxes, repeatedly accusing the journalists in attendance of not being able to do math. 

But Marisol Garcia, president of the Arizona Educators Association, accused Petersen and his colleagues of the same. 

“It seems like ESA voucher proponents might need a refresher from one of our educators on basic math,” Garcia said in a statement. “Their claims about the program are misleading at best and straight-up lies at worst. The real data is clear: the more the ESA voucher program grows, the deeper the hole in Arizona’s state budget.”

***UPDATE: This story has been updated to include an additional comment from Tom Horne on the Arizona Department of Education’s surplus and rebuttal information provided by Save Our Schools Arizona.