Arizona school voucher program growth explodes to $900 million for the upcoming school year

Arizona’s universal school voucher program that was estimated to cost only $65 million is now poised to cost the state $900 million over the next year, exceeding its available funding by hundreds of millions of dollars. 

John Ward, chief auditor for the Arizona Department of Education, said Wednesday the skyrocketing price tag is due to a projected spike in applicants to the voucher program. Ward estimates that the Empowerment Scholarship Account program, as it’s officially known, will reach 100,000 applicants by July 2024, far outstripping initial estimates and surpassing the $500 million dollar cushion provided in the budget passed last month. 

Republican Superintendent of Public Instruction Tom Horne said that his administration would look for solutions to resolve the funding gap once it becomes an issue. For now, he said, funding is sufficient. 

“If we conclude we’ll need more, we’ll deal with that at the time,” he said. 

Capturing more funding would entail lobbying the legislature for increased allocations of taxpayer dollars. And while the Republican-majority legislature, which championed the expansion last year, is likely to approve such a request, it’s unclear if Gov. Katie Hobbs, who has repeatedly cited a desire to curtail the program, would agree. 

In her most recent move against vouchers, the Democrat shot down $50 million for ESA grants that former Governor Doug Ducey sought to use to pay for full-day kindergarten for ESA recipients. Critics of the award highlighted that the state doesn’t fund full-day kindergarten for public school students and warned that it was likely illegal, given that the money was sourced from federal funds in the American Rescue Plan Act, which are strictly reserved for COVID-19 recovery. 

Public school advocates were quick to criticize the voucher expansion’s ballooning cost, warning that a continued failure to repeal it will only harm Arizona students. 

Marisol Garcia, president of the Arizona Education Association, the state’s largest teacher’s union, pointed out what she views as an unfair discrepancy between funding private school options and public education. 

“Are we seriously about to bankrupt our state subsidizing private school tuition for the wealthy?” she said in an emailed statement. “Arizona is 49th in the nation for per-pupil public school funding, with thousands of educators leaving the state or the profession in search of higher pay and better benefits. But instead of funding the public schools attended by 90% of Arizona kids, we’re about to spend nearly a billion dollars helping the rich pay for private school.” 

The program was widely denounced for helping the parents of private school students pocket the benefits when 75% of the initial wave of applicants were revealed to be students with no previous public school history. And on Wednesday, Horne noted that nearly half of grant recipients, about 49%, continue to be students who have never stepped foot in an Arizona public school. 

Currently, 58,000 students are voucher recipients, with as many as 3,000 still awaiting approval. The program surpassed the enrollment rate of the state’s largest public school district, Mesa Unified, which educates about 55,000 students.

Horne attributes the lowered percentage of private school student applicants to marketing campaigns undertaken by his administration, including on Spanish language media, to recruit low-income and Hispanic students, who overwhelmingly attend public schools. No equivalent marketing has been done, however, on behalf of public schools. 

“The purpose of this is to let people know that they have a choice,” Horne said. “My main duty is to encourage excellence in public schools, and we have a lot of excellent public schools, but if their child’s needs are not being met, they need to know that they have a choice.” 

Horne deflected concerns that ramping up funding for ESAs is detrimental for public schools. If schools, which are funded based on enrollment levels, are worried about an exodus from their classrooms, then they should focus on improving to convince them to stay, Horne said. 

“Competition is good for everyone. That’s the reason the United States was prosperous and the Soviet Union was poor,” he said. “The competition causes public schools to strive to do better to hold onto the students. They’re no longer a monopoly — they have to compete and if they have to compete they will do a better job.” 

A student who chooses a voucher over attending their public school saves the state and their former school the cost of educating them, Horne added. Under the program, vouchers fund only up to 90% of what the state pays per-pupil. The median ESA payout is $10,000. 

But that ostensible 10% in savings doesn’t exist in the case of a private school student who has never attended public school, and Horne’s argument also ignores the fixed costs that all Arizona schools deal with regardless of the number of students they serve, such as heating and cooling costs, or building maintenance and rental bills. 

Horne also wouldn’t rule out closing schools that suffer a significant enough enrollment impact.   

“Sometimes you have to do that,” he said. “It’s politically tough but that’s the reasonable economic thing to do if you have declining enrollment.”