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Diane Ravitch's Blog: Arizona: Vouchers Might Bankrupt the State

Arizona is a typical voucher state. The program started small, then grew almost every year. Vouchers for the students with special needs, vouchers for the poor, vouchers for children of the military, on and on.

Parents and teachers put a referendum on the ballot in 2019, much to the consternation of the Koch machine; the public overwhelmingly rejected vouchers. The vote was 65-35 against vouchers.

The legislature, buoyed by money from DeVos and Koch, ignored the referendum and expanded vouchers to the ultimate. Now Arizona has a universal voucher program. Every student in the state, whatever their family income, can claim a voucher. But the state is now worrying whether the cost of vouchers will plunge Arizona into bankruptcy. The Staye Superintendent, a hard-right Republican, says there’s no problem.

Public school advocates predict that the voucher program will eventually cost $1 billion a year.

Currently, 75% of those who claimed vouchers never attended public school. They are the biggest drain on the budget.

Mary Jo Pitzl of the Arizona Republic writes:

Backers of Arizona’s universal school voucher program have widely touted it as a money saver for the state. But for most potential participants, the program adds to the state’s costs, a new analysis shows.

The finding comes as legislative budget officials reported a surprising and steep decline in tax collections in May, raising questions about whether the state can sustain the booming price of the voucher program in coming years.

The analysis from the Arizona Association of School Business Officials broke down the different categories of students eligible for the Empowerment Scholarship Account program and showed savings come only when charter school students transfer into the program.

In every other situation — whether the student comes from a public school district, a private school, a homeschool or micro school environment — there is an extra cost to taxpayers for the ESA voucher, the analysis shows. The costs can range from $425 if a student leaves a district public school to $7,148 if the student already attends a private school or home school.

The idea that vouchers save the state money is based on a law that makes each universal voucher worth 90% of what the state pays for a child in a public school, presumably resulting in a 10% savings. The more children who leave the public school system for a voucher, the theory goes, the greater the savings to the education budget.

But the 90% equation isn’t so simple. That percentage is pegged to what the state pays for students in public charter schools, which is higher than for students in public district schools. For example, the basic state aid for a K-8 student in a district public school is $6,339, while it’s $7,515 in the charter system.

At 90% of the charter rate, the average ESA scholarship for an elementary-aged student this past year was $6,764. That saves the state $751 for charter students, but it adds $325 in costs for the state for each public school student who moves to the voucher program.

For high school students, the figures are higher: A $1,380 savings to the budget if a charter student transfers, but a $543 loss per each student who leaves a district public school.

Charter schools account for a minority of students in Arizona’s public school system: 19% in the last school year, according to figures from the Arizona Department of Education.

Voucher expenses are markedly more if a student was never in the public school system, or if a student transfers from one of the two dozen public school districts that get no basic state education aid, such as the Scottsdale Unified School District or Cave Creek Unified School District, because they have wealthy property-tax bases.

In both those cases, the $6,764 for an elementary school voucher (or $7,532 for a high-school voucher) is drawn entirely from the state’s general fund, creating a new education expense…

In the ESA program’s first year, those in private schools or from home-schooling environments are widely believed to have fueled most of the program’s four-fold growth to more than 61,000 students. With the families of these students eligible for state aid when previously they were paying out of pocket, lawmakers had to allocate an extra $376 million from the general fund to cover the higher-than-expected growth of the universal voucher program in its inaugural year.

In late May, state schools superintendent Tom Horne released a report estimating enrollment would climb much higher, hitting 100,000 students by June 2024, at an overall cost of $900 million.

Most of that enrollment growth will come from the district public schools, he predicted at the May news conference, arguing it will save the state money because of the 90% formula….

As the universal voucher program enters its second year, supporters and critics alike are watching to see what enrollment trends emerge and how they will affect state spending….

Some see the state barreling toward a budget crisis, given the onset of the flat income tax, which caused state revenues to drop dramatically in May. Others are less concerned, noting the ESA program takes only a fraction of the state’s K-12 budget.

Lawmakers have repeatedly noted they are obligated by the Constitution to fund education. But if there isn’t enough money to do that and keep the rest of state government running, hard choices could lay ahead.


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Diane Ravitch

Diane Ravitch is Research Professor of Education at New York University and a historian of education. She is the Co-Founder and President of the Network for Publi...