Arizona school vouchers program to cost $900 million

By Howard Fischer
Capitol Media Services
PHOENIX -- The system of universal vouchers enacted by Republican lawmakers is going to cost Arizona taxpayers $900 million this coming school year, more than 60% more than what lawmakers put into the budget just a month ago.
In a memo to legislative budget staff, Christine Accurso, director of the Empowerment Scholarship Account program, said by the end of the next school year there will be about 100,000 students who will get state funds to attend private and parochial schools.
That compares with just around 58,000 who are now in the program, with another 3,000 who already have submitted their applications.
More to the point, Accurso says the state will need to come up with about $900 million to fund all those vouchers -- about one dollar out of every eight now earmarked for public education. That compares with the $552 million estimate prepared just months ago by the Joint Legislative Budget Committee.
Despite that, state schools chief Tom Horne argued Wednesday there really is no additional cost to the state.
"The 39,000 additional students that are being projected for the next year are going to be educated someplace,'' he said. "They're either going to be educated in the public schools or their going to be educated in ESAs.''
And that $900 million estimate, he said, includes money following those students from traditional schools to private schools.
But that's not true.
Even Horne's own staffers acknowledged that three out of every four of the students who have applied for the new universal vouchers to date already were going to private schools -- and on their parents' dime. Now their tuition will be borne by taxpayers.
And even assuming Horne's projections that just half of the additional 39,000 expected to sign up before the end of the next school year already are in private schools, with the median voucher running $10,000, that alone adds up to an additional $200 million.
The fact that there has been a burst of parents seeking to shift the costs of their children's private school tuition to the state should come as no surprise to lawmakers. They were warned earlier this year by their own budget staffers -- before the new spending plan was adopted -- that would happen.
"We expect that most of the growth in universal ESA participation will likely occur among private school and home school students,'' said the report by the Joint Legislative Budget Committee. "They have already decided to opt out of the public school system and would be likely to receive a financial gain from ESA program participation.''
It was that logic that caused Gov. Katie Hobbs, in her first budget request in January, to call on lawmakers to repeal universal vouchers approved last year.
Prior to that, vouchers were designed specifically to help students who fit certain categories who may have needed help beyond what they could get in public schools. These included those with special needs, foster children, children living on reservations and those attending schools rated D or F. The Republican controlled Legislature, at the behest of then-Gov. Doug Ducey, voted to lift all restrictions, making state funds available to all who want.
Hobbs instead proposed to return to the way the situation was before. And she sought to redistribute the cost of the expanded program -- at that time pegged at only about $144 million -- for other education priorities.
But closed-door negotiations between the governor failed to rescind the expansion. In fact, Republicans refused to even put a cap on the number of new students who could enroll to help control costs.
And, in the end, Hobbs signed the $17.8 billion spending plan for the coming year, saying she got other key victories, including $300 million in one-time funding for K-12 education.
On Wednesday, informed of the new estimate, Hobbs went back to her January talking points.
"The school voucher program in its current form is not sustainable,'' she said in a prepared statement.
"Legislative Republicans need to explain why they are forcing this runaway spending on Arizona taxpayers and making working families foot the bill for private school tuitions,'' the governor said. "We need to bring an end to the wasteful school voucher spending that threatens to decimate our state's finances.''
Lawmakers will be back at the Capitol on June 12. But whether the Hobbs will try to renegotiate the deal she agreed to just a month ago -- one heavily criticized by many members of her own party -- is less than clear.
"We are evaluating our options,'' said press aide Christian Slater.
There was no immediate response from either Senate President Warren Petersen, R-Gilbert, or House Speaker Ben Toma, R-Peoria, about the ballooning costs of the universal voucher program that both supported.
Horne's report also contends that students switching from public schools to private ones actually saves money for the state. That is based on a law that the base voucher -- the amount that is available for a student with no additional needs like special education -- is supposed to be based at 90% of what the state pays on a per-student basis if that same student were attending public schools.
But that is misleading.
That 90% figure is based on aid to charter schools, private, for-profit schools that qualify as public schools that cannot charge tuition. And the state gives them an additional $1,986 for each K-8 student and $2,314 for high schoolers above what they give to traditional public schools.
And that changes the calculus.
Figures provided by the Arizona Association of School Business Officials show that puts the basic voucher for this year at $6,764 for elementary and middle school students. That's $424 more per student than state aid to district schools.
And vouchers for high schoolers are worth $7,532, about $540 more than the state provides to public schools.
Several Republicans who support vouchers said they were not concerned about the price tag. In fact, Rep. Jacqueline Parker of Mesa said in a Twitter post that $900 million is "not enough yet,'' calling it "a drop in the bucket to the other $7+ billion spent on the useless indoctrination camps that are 'government schools.' ''
And Rep. Cory McGarr of Marana said "this is an admission if given the choice parents will choose ESAs.''
But the memo may have energized Democrats who were unhappy about Hobbs giving in on the issue of universal vouchers during the budget talks.
"I say let's not forget our original fight and not give in this time,'' said Sen. Catherine Miranda of Phoenix in her own Twitter post, "me included.'' She wants to raise the issue again when the legislature reconvenes on June 12.
John Ward, an internal auditor for the Department of Education, said his agency was not hiding the true cost of the expanded voucher program when lawmakers adopted the budget a month ago with its $552 million cost estimate. He said state law requires only that a report to be prepared every year by May 30 of anticipated voucher enrollment and the cost for the coming school year.
"We just completed that analysis a few days ago,'' he said. "It was at that point that we had our estimate of 100,000 students by the end of next fiscal year -- June 30, 2024 -- at a cost of $900 million.''
Horne, for his part, sidestepped the question of whether there is enough money in the $17.8 billion budget to support the increase in the number of private school students who now are expected to rely on state funds for their education.
"Right now, we're relying on basic state aid,'' he said, based on the premise that these youngsters actually were going to public schools until now. "If we conclude that more is needed, we will have to deal with that at the time.''
At least part of the reason there has been a big influx of applications for vouchers is due to Horne himself.
State lawmakers agreed to set aside $10 million to administer the voucher program. But Horne acknowledged he has been using some of that for advertising the universal vouchers.
How much?
"I'm not prepared to say,'' he responded.
But Horne, who at one time was a member of the Paradise Valley Unified School District governing board, has become a major champion of vouchers.
"Competition is good for everyone,'' he said, comparing the prosperity of the United States with the old Soviet Union. Horne said it helps keep public schools to do better.
That presumes, however, there is true competition.
Traditional public schools must accept anyone living in their district. Even charter schools -- privately run for-profit schools -- also generally cannot discriminate against applicants.
Private and parochial schools, however, are free to accept -- or reject -- any student for any reason. And that can include those who may be the hardest to teach like those with learning disabilities and language skills.
Horne brushed aside the question of whether the comparisons are fair.
"If a public school is worried about losing students to ESAs or to charter schools, it's motivated to improve its academic performance so it won't lose those students,'' he said.
That goes to another one of Horne's complaints about public schools.
"The test scores have not been good right now because the focus has been too much on things other than academics,'' he said. "I can name them: critical race theory, social-emotional learning, inappropriate sexual lessons, all kinds of things that detract from academics.''
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