Expert: Measure May Remove 15% of School Choice Students

By Zachery Schmidt

A new ballot initiative’s income cap could remove approximately 15% of current participants in Arizona’s school choice program, according to Katie Ratlief, the executive director of Common Sense Institute Arizona.

The Arizona Education Association, Arizona’s largest teacher union, and Save Our Schools Arizona, an organization that supports public schools, filed paperwork last week to restrict the state’s Empowerment Scholarship Account program.

“This initiative — led by educators and parents who care deeply about our kids — is Arizona’s chance to address the waste, fraud and safety concerns that have plagued the ESA voucher program on the state’s watch,” said Marisol Garcia, president of the AEA.

“Bringing this reform to the ballot is about making sure that every child in Arizona gets a high-quality education, no matter what kind of school they attend,” she added.

State Superintendent of Public Instruction Tom Horne told The Center Square that the ballot initiative “seeks to punish ESA families who are just trying to ensure their child’s needs are being met.”

“Imagine a family with three children. Two of the children are doing just fine in district schools,” Horne said in a statement. “The third child’s needs are not being met. With ESA, the parents can find another school that meets the child’s needs.”

He added he did not “understand how anyone can say the parents do not have a right to find a school that meets their child’s needs, unless people are so immersed in ideology that they lose sight of what is best for students.”

One of the measures the ballot initiative proposes is an income cap of $150,000, meaning only Arizona families earning below this threshold would be eligible for the program.

Ratlief told The Center Square that the income cap would “lock out” around 25% of “Arizona families from participating in the program.”

Not all families earning more than $150,000 currently participate in the program, but they would be prevented from joining in the future, she noted.

“ The average income of families in Arizona – that’s two parents and kids at home – is about $120,000,” Ratlief said.

Factoring in inflation and the rise in Arizona wages over the past several years, Ratlief said the average Arizona income could soon approach $150,000.

Matt Beienburg, director of education policy at the Phoenix-based Goldwater Institute, said the income limit “creates a double standard” for Arizona taxpayers by forcing them to fund students “regardless of how wealthy they are if they go to public school, but if that same family were to try to seek an education through an ESA, they would be denied the program.”

The income limit is “artificially” pushing students to go to public schools, “many of which are failing to meet these kids’ needs,” Beienburg told The Center Square.

“It’s a completely disingenuous and bad-faith attempt to lock kids out of the program,” he noted.

In addition to an income cap, the ballot initiative seeks to ban the use of ESA funds for non-educational and luxury items and to provide greater transparency into ESA funds.

The Arizona Department of Education uses risk-based auditing for ESA accounts, as the Internal Revenue Service does for tax returns, Ratlief said.

The state DOE used to review every ESA transaction before approving it, but the program got behind “in terms of payments to families, schools and other providers,” she said.

Ratlief noted families waited several months to be reimbursed for expenses, which led them to pay out of pocket and wait for the DOE to approve transactions and reimburse them.

According to Ratlief, an unintended consequence of a policy like this is that poorer families who use the program will have a “harder time” because they will have to pay out of pocket and wait for reimbursement.

She said these families “may not be able to bear those upfront costs.”

Regarding luxury and non-educational items, Arizona law prohibits the use of ESA funds for these items, Ratlief said. She added the state lists the items eligible for purchase with ESA funds.

Furthermore, the Arizona State Board of Education adopts an annual handbook outlining permissible ESA fund purchases, she noted.

On public school funding, the ballot initiative seeks to reclaim millions of dollars in unused funds for public schools.

Students in the ESA program receive a fixed dollar amount each year, set by the school district to which they are assigned, Ratlief explained.

The dollar amount these students receive is 90% of the amount the school district “they are assigned to by their zip code would receive if they were in public school,” Ratlief said.

If funds in an ESA account are not spent in a given year, they roll over to the next year,” she added.

The voter initiative aims to prevent money from rolling over by requiring that unused funds be returned to public schools, she said.

Ratlief noted downsides to a policy like that.

“You don’t want to encourage parents to just spend money for the sake of spending money. They may be anticipating future costs,” she explained.

Ratlief said parents may be rolling over funds to save for their children’s high school.

If the voter initiative passes, private schools would be required to administer assessments similar to those used for public school students or by a nationally recognized accrediting organization.

Beienburg said proponents of the ballot initiative “want control over private schools and over families who are doing homeschooling.”

The effort to put guardrails on the program is “deeply disingenuous,” according to Beienburg.

Arizona families leaving public schools for private schools are doing so because “they believe they’re getting a superior education for their kids,” he explained.

Beienburg told The Center Square that this provision gives the state control over “how the private schools are measured, meaning they get to determine what is deemed important.”

“The argument that somehow we’re going to improve private schools by grafting on public testing requirements that the public schools themselves are doing in many cases terribly on is nonsensical,” he noted.

Beienburg added the proponents of the ballot initiative are “not about trying to improve outcomes for students” but rather “trying to punish private schools” by making them “operate the same way” as public schools.

If the ballot initiative gets approved by the Arizona secretary of state and gets 383,923 signatures, Arizonans will vote on it during the Nov. 3 general election.

Beienburg called the initiative “an ideologically driven attack on students, families and educational opportunity in Arizona.”

He said polling has continued to show that school choice in Arizona is very popular.

Charter schools and the ESA program are popular among Arizona parents because “they serve the needs of their kids in ways the traditional public school system has often failed to do,” he explained.

Ratlief said the ESA program has continued to grow since becoming universal in 2022.

“ The more people learn about these programs and learn that they have access to them, the more they want to use them,” she told The Center Square.

The ESA program has reached over 100,000 participants in it.

Beienburg said he thinks the more voters learn about the ballot initiative, the more “they will recognize this is not something that’s intended to protect or improve education.

“It’s something that is intended to strike a blow against an extremely successful program,” he noted.

Ratlief said, “Once something is passed by the voters, it can only be changed by the voters.”

“It’s very difficult for lawmakers to respond to changing conditions when only the voters can make changes to those laws,” she said.