School-voucher expansion could cost Arizona $24M a year or more
Two new reports and research by the Arizona Republic cast doubt on claims that expanding school vouchers will save state tax dollars.
Republicans pushing to expand the state’s school-voucher program argue it will save Arizona thousands of dollars per student, even as it provides more options for parents to educate their children.
But two new reports and research by The Arizona Republic show that a bigger Empowerment Scholarship Account program would actually cost taxpayers an additional $24 million annually and potentially many millions more.
The scholarships allow parents to take money that would otherwise go directly to their local public school and put it toward private-school tuition, homeschooling and other education-related expenses. Critics of the program say it siphons money away from public district schools and, over time, could substantially erode school funding.
Republican lawmakers are advancing identical measures — Senate Bill 1431 and House Bill 2394 — that would expand the program to all students by the 2020–2021 school year.
In testimony last week, state Sen. Debbie Lesko, R-Peoria and sponsor of the Senate bill, said ESAs cost the state about $5,200 per student to fund, while public schools costs $9,500 per child.
“That’s a savings to your constituents of $4,300 a year,” she said.
But an analysis by the state’s independent budget research office, the Joint Legislative Budget Committee, contradicts Lesko’s claim.
The cost to the state’s general fund is actually about $800 higher per ESA student than for children in traditional public school. According to the JLBC, the cost is about $4,800 per public school student, compared to $5,600 a year for each ESA.
“Just because this thing passes, doesn’t mean an appropriation is going to be included in the budget. Even if it goes, it could mean that this is just in a pile of carrots and potatoes in that budget stew.”
Republican State Senator Don Shooter
Lekso’s $9,500 figure for public school students further skews the comparison by including federal funding and local property tax money.
Republican state Sen. Don Shooter, who chairs the chamber’s Appropriations Committee, said the higher price tag could cost his support for expanding ESAs, even if it makes him a “heretic” among GOP school-choice advocates. The money to fund it might not be there, he said.
“Just because this thing passes, doesn’t mean an appropriation is going to be included in the budget,” he said. “Even if it goes, it could mean that this is just in a pile of carrots and potatoes in that budget stew.”
Cost of vouchers could rise sharply
The Empowerment Scholarship Account program began as a way to help disabled students, but has since grown to include students from failing schools and others. The program is now capped at about 5,500students. If expansion legislation wins approval, all 1.1 million Arizona students would be able to use it.
Depending on how many students used the program, and at what point in their schooling, the cost of ESAs could rise sharply, according to the JLBC.
The legislation allows any child entering kindergarten in 2017–2018 to begin using ESA money to attend private school. That funding would continue to flow to them each year they attend private school in Arizona until they graduate high school.
Depending on the number of private school students who sign up for kindergarten without ever going to public school, expansion of the Empowerment Scholarship Account program could divert from the state’s general fund as much as $35 million a year in 2020–2021, according to a fiscal note released this week by the Joint Legislative Budget Committee.
By 2030, the state could then be paying for many of the children attending Arizona’s private and religious schools, pushing the potential costs to as much as $75 million a year, according to a Republic analysis of JLBC data.
If half of the 45,000 students in private school were funded by ESAs, the state’s cost would total about $125 million a year by 2030.
Lesko stood by her characterization of the cost of expansion, saying the fiscal analysis focuses on the impact to the general fund and doesn’t take into account local funding through bonds, overrides and other sources.
“My statement that the ESAs save taxpayer money is accurate,” she said. She added she has asked for additional analysis from the budget office.
While the Legislature’s budget officials acknowledged their estimates are speculative, their research is the independent resource lawmakers rely on to weigh the fiscal impact of public policies.
The office accounts for the anticipated increases in two key ways:
- The state bases ESA funding on the amount of money received by a child in a charter school, which is higher than the amount given to public schools. Therefore, when a child leaves a public school to go to a private school, using an ESA, the state loses about $800 from the general fund. The state saves money — about $600 — when a child leaves a charter school for a private school, using an ESA. But far more children tap ESAs to leave public schools than charters.
- The state would pay heavily for children who begin using ESAs in kindergarten without ever attending public school. Because there is no offsetting savings from a child leaving the public school system, the state general fund bears the full cost of the ESA, which is about $5,600 per year. As more and more children enter private schools as kindergartners using ESAs, the costs explode. By 2030, the state will have paid for some students to attend private school through 13 grades.
‘The DeVos vouchers’
Republican efforts are bolstered by pro-school-choice groups that have the ear of the governor, including the Arizona Catholic Conference, the conservative advocacy group Center for Arizona Policy and the American Federation for Children.
Some parents with disabled children who are currently using ESAs have spoken in favor of expansion as well.
On the other side, parents, public-education associations and teachers are voicing opposition, saying it would divert too much money away from the general fund, ultimately hurting public schools.
Some lawmakers have fielded a steady stream of phone calls and emails.
The budget analysis shows expanding the program is not “solvent,” Democratic Rep. Randy Friese, of Tucson, said. He said the program should remain the “exception” for certain students and not the rule for all students.
If there were to be an exodus from public schools to private schools as well as charter schools, he said, “we could eventually get to the point where the fixed costs” to run those schools could force school closures and consolidations.
A public-education advocacy group called AZ Schools Now is planning to confront legislators next week to ask for time to voice concerns on the state budget and the ESA expansion. Some of its parents are dubbing the plan “the DeVos vouchers,” after President Donald Trump’s Education secretary, Betsy DeVos, a Michigan billionaire and school-choice promoter.
Parents like Melinda Iyer, of north-central Phoenix, showed up at the state Capitol last week and waited hours to voice her concern over the legislation.
“Education is something every child deserves access to,” she said. “And when you set up this two-tiered system … where some kids get the expensive, private educations, and the other kids don’t, that’s not a world I want for our kids. I want the kid down the street to have the access to the same education that my kids do.”
School board association finds similar numbers
“Education is something every child deserves access to. And when you set up this two-tiered system … where some kids get the expensive, private educations, and the other kids don’t, that’s not a world I want for our kids. I want the kid down the street to have the access to the same education that my kids do.”
Melinda Iyer, parent
The Arizona School Boards Association did its own analysis of the fiscal impact of ESA expansion and reached a conclusion similar to the Joint Legislative Budget Committee.
The ASBA, which advocates for more money for public schools, found ESAs cost the state nearly $1,100 more per elementary student who leaves public school with an ESA, and nearly $1,300 for high school students who leave public schools and go to private school with an ESA.
It compared the formula that funds public schools with the ESA amount in each school district across the state. The ASBA’s data also found ESAs cost more for two reasons: ESAs are funded at the charter-school levels, which are higher than public schools, and there have been large cuts in recent years to additional assistance to public schools.
Chris Kotterman, director of government relations for ASBA, said the $9,500 number Lesko uses is misleading because it includes “every single red cent spent on education.” Local bonds and overrides and federal funding won’t automatically decrease if a child leaves a public school for a private school using an ESA, he said.
He said JLBC found the difference to be slightly lower than the school board association, but also said JLBC’s conclusions are significant because it is the first time it has estimated that ESA expansion will cost taxpayers more money.
“This Legislature prides itself as being fiscally conservative,” he said. “This is a dollars-and-cents issues for the general fund, not an ideological issue.”
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