Universal school choice is proving to be a cost-saving measure for the state of Arizona, despite its massive growth in under two years.
This is according to a new assessment of state data from the Goldwater Institute, a leading public policy think tank out of Phoenix. Per the Goldwater Institute’s assessment, universal school choice under the Empowerment Scholarship Account (ESA) program added to a $2 billion surplus in the state budget (prior to Governor Katie Hobbs taking office) as well as an overall net savings within the budget’s education funding formula.
The Joint Legislative Budget Committee (JLBC) determined in its latest report earlier this month that the state had a savings of $352,000 for the 2024 fiscal year, despite ESA awards exceeding $92 million beyond forecasted budget levels.
“With the above forecast adjustments, we estimate the total combined district/charter/ESA enrollment will generate savings of $(352,200) in FY 2024 relative to the enacted budget,” stated the JLBC.
This savings occurred even with the exclusion in their analysis of other sources of funding beyond the basic state aid formula: these are multiple other sources of funding across each level of government that are off-limits for ESA students.
These additional funding sources at the state and local levels (not including federal funding) amount up to $4,000 more per student beyond the basic state aid. Significant funding sources of this kind include the Classroom Site Fund and the Instructional Improvement Fund.
The state only enjoyed a surplus in the 2022-2023 school year; once Hobbs took office, the state took on a $2 billion increase in state spending that eliminated the state’s surplus.
State data revealed that ESA students constitute five percent of all Arizona students, while the costs of their total awarded funding amounts to just three percent of state expenditures on public education.
The estimated total awards for the 2023-2024 year was over $700 million, approximately $400 million of which came from the universalization of the program (around 56,000 students) and the remainder from the ongoing allocations to special education costs (around 19,000 students). The median ESA student award for students who qualified under universalization amounted to over $7,000.
The Goldwater Institute noted that prior to ESA universalization, all growth in the state’s public K-12 student population came from public charter schools. That annual growth of about 10,000 students would cost around $100 million in state funding, compared to the lesser cost of $75 million under ESA awards.
According to the Arizona Department of Education, about 18,000 students joined the ESA program from public schooling backgrounds after universalization occurred.
As of Monday, the Arizona Department of Education (ADE) reported a total of about 72,000 students in the ESA program. ADE noted that this enrollment total would be in flux until September, citing over 22,000 students exempted from total enrollment due to either outstanding renewal contracts or renewal application information.
The Goldwater Institute also addressed in its report the criticism of using public funds to subsidize private or homeschool education for wealthier families.
The think tank estimated that the state spends up to 20 times more subsidizing the public school education of students from families making over $150,000 a year compared to that same student under the ESA program.