Give parents educational choice, save K-12 systems millions

By Vicki E. Alger, Ph.D.

Vicki E. Alger, Ph.D.

Summary: Arizona has been the national leader in educational choice programs for nearly three decades, most recently for its landmark education savings account (ESA) program. Yet despite all the empirical evidence to the contrary, education choice alarmists insist that ESA programs will financially “starve” public schools. If that were true, state and local funding for Arizona public schools wouldn’t have increased by 20 percent in real, inflation-adjusted dollars since the program’s enactment in 2011—representing an increase of more than $2,000 in per-pupil funding. What’s more, the estimated cumulative savings of Arizona’s ESA program exceeds $41 million. In fact, for every dollar spent, Arizona’s ESA program generates an estimated savings of $1.25—a staggering 125 percent return on investment. If opponents truly were interested in more money for public schools, then they would be overjoyed, not outraged, about ESAs.

Perhaps the most common refrain from opponents is that educational choice programs “starve” public schools of funding. Common sense suggests that schools should only receive funding for the students they’re educating because if students are not enrolled, those schools don’t bear their associated education costs.

Abundant empirical fiscal research not only backs ups common sense, it also shows that educational choice programs save money because choice programs typically cost thousands of dollars less per pupil than public schools. Consider the country’s first and oldest education savings account program, Arizona’s Empowerment Scholarship Account (ESA) program.

 It launched in the 2011-12 school year with 153 special needs students. The program grew to more than 12,000 students in the 2021-22 school year as program eligibility was expanded over the years to include additional student populations, including children from foster care, in failing public schools, living on Native American reservations, or whose parents were legally blind, deaf, active-duty military members, or whose parents were killed in the line of duty.

The following school year, all school-age Arizona children became eligible for the ESA program, which currently enrolls nearly 71,000 students, roughly 6 percent of public school K-12 students statewide. The estimated cumulative fiscal savings to taxpayers, school districts, and the state from the ESA program exceeds $41 million, approximately $3,000 per student. Furthermore, Arizona’s ESA generates an estimated $1.25 in savings for every dollar spent.

 Despite these findings, Arizona Gov. Katie Hobbs recently released a memo claiming the ESA program costs so much it would result in a substantial general fund shortfall next year. The memo has been roundly criticized, including Hobbs’ exclusion of the ESA program’s significant savings.

Specifically, ESAs receive no local or federal funding, and they are worth just 90% of the state funding public schools receive. This means the average ESA costs around half of the average Arizona per-pupil public school funding, $7,200 compared to more than $14,000.

In fact, contrary to Gov. Hobbs and other opponents' doomsday predictions about educational choice programs “starving” public schools, Arizona state and local taxpayer funding for K-12 public schools has increased 20% in real, inflation-adjusted terms since the ESA program was enacted, more than $2,000 per pupil. Moreover, official projections indicate record-breaking public education funding levels for fiscal year 2024, including nearly $800 million more in state and local taxpayer funding compared to last year.

 If opponents actually believed their own Chicken-Little hype, then they would be lobbying against many other choices parents might make that would affect public schools’ bottom lines. For example, any time parents move outside their assigned school district boundaries—much less out of town or out of state—by opponents’ logic, they are “draining” money from local public schools.

Yet no one is clamoring to outlaw such moves until those parents’ children graduate from high school. This notion is as absurd and inequitable as claims that educational choice programs such as ESAs rob public schools of funds.

Vickie E. Alger, Ph.D., is  a Visiting Fellow with the Bluegrass Institute for Public Policy Solutions. She is president and CEO of Vicki Murray & Associates LLC in Scottsdale, Arizona, a research fellow at the Independent Institute in Oakland, Calif., and author of the book “Failure: The Federal Misedukation of America’s Children.”

  Sources:

*NOTE: the $7,200 ESA average is for general education students only. Special needs student ESA receive 100% of state funding, and can be significantly more based on students’ particular needs.

Matthew Ladner, “Arizona governor touts misleading narrative on Empowerment Scholarship Program,” July 31, 2023, Next Steps Blog, https://nextstepsblog.org/2023/07/arizona-governor-touts-misleading-narrative-on-arizona-empowerment-scholarship-program/

>Hobbs memo linked. See July 21, 2023, memo, “Updated ESA FY 2024 Cost Projections,”  https://azgovernor.gov/sites/default/files/esa_memo_07.21.23.pdf

> Matt Beienburg, AZ’s Governor Wants to Rip Away Funding from 30,000 Students, Goldwater Institute, January 13, 2023, https://www.goldwaterinstitute.org/azs-governor-wants-to-rip-away-funding-from-30k-students/

 Matt Beienburg, Record-Breaking $15K Per-Kid Spending in AZ Public Schools—Amid ESA Growth, Goldwater Institute, August 16, 2023, https://www.goldwaterinstitute.org/record-breaking-15k-per-kid-spending-in-az-public-schools-amid-esa-growth/

 JLBC, FY 2023 all funding per-pupil: 12,003. JLBC, K-12 (All Funding) - 20 Year Supplement (8/18/23), https://www.azjlbc.gov/units/k12allfunding.pdf

 Martin F. Lueken (2021). The Fiscal Effects of Private K-12 Education Choice: Analyzing the costs and savings of private school choice programs in America, Table E1, p. 7, Table , p. 21,  and pp. 37-40, EdChoice, November 2021,  retrieved from: https://www.edchoice.org/wp-content/uploads/2021/11/The-Fiscal-Effects-of-School-Choice-WEB-reduced.pdf

 Marty F. Lueken, The Fiscal Effects of Private K-12 Education Choice Programs in the United States, EdChoice Working Paper 2021-01, Table 2, p. 30, March 2021, https://www.edchoice.org/wp-content/uploads/2021/03/The-Fiscal-Effects-of-Private-K-12-Education-Choice-Program-in-the-United-States.pdf.

 EdChoice, last updated January 2023, https://www.edchoice.org/school-choice/programs/arizona-empowerment-scholarship-accounts/

 70,925 ESA students: Arizona Department of Education (ADE), updated November 27, 2023, https://www.azed.gov/esa?gclid=CjwKCAiAmZGrBhAnEiwAo9qHiXW17NFMSEDOr12OUBuSNJp9D5Hoy8bQgL-Znp56NKnBk4wlSVrxbhoCINoQAvD_BwE; and guidance: https://www.azed.gov/esa/esa-guidance

K-12 students (2021-22 latest): Nearly 1,150,000 students attend publicly funded K-12 schools in Arizona. Approximately 910,000 of those students attend one of more than 2000 district public schools, and approximately 240,000 students attend one of more than 700 charter schools in the state.

Charter %: 20.87

ESA %: 6.17

 ADE state reports, https://azreportcards.azed.gov/state-reports