For years, opponents of school choice have warned that Arizona’s Empowerment Scholarship Accounts (ESAs) policy would drain the state’s coffers. They predicted financial ruin, claiming the program would “bankrupt” the state. However, the reality paints a very different picture. Arizona, a pioneer in school choice, has seen a budget surplus, and the state’s education funding formula, which includes ESAs, has actually experienced net savings.
This success story has caught the attention of lawmakers in other states considering similar policies. While some, like Arizona’s Democratic Governor Katie Hobbs, have attempted to roll back ESA eligibility, arguing for its curtailment to prevent a financial crisis, the evidence suggests otherwise.
The myth of ESAs being a financial burden has been perpetuated by opponents, who have used Arizona as a cautionary tale. They cite the program’s cost as a reason to resist school choice initiatives, claiming it would create a “nearly $1 billion problem of skyrocketing costs” (Texas Rep. Trey Martinez Fischer) or “blow a massive hole” in the state budget (Kentucky Lt. Gov. Jacqueline Coleman).
These claims, however, are demonstrably false. Arizona’s ESA program, which allows parents to use public funds to pay for private school tuition or other educational expenses, has actually resulted in cost savings for the state.
The typical ESA student receives about $7,500 annually from Arizona taxpayers, significantly less than the $12,000 per pupil that public schools receive through state and local taxes. As more students choose ESAs, the public school system experiences a reduction in enrollment, leading to budget savings.
While critics have pointed to a $1.4 billion deficit in Arizona’s budget, attributing it to the ESA program, the deficit has since been eliminated, and the state’s education budget has seen a surplus. The data from the nonpartisan Joint Legislative Budget Committee (JLBC) reveals that while the ESA program incurred higher costs than projected, this was offset by a decrease in public school enrollment, resulting in a net savings of over $350,000 for the state.
Furthermore, the JLBC’s analysis only considers the basic state aid formula, not the additional savings from other state, local, and federal funding sources. This indicates that the actual financial benefits of ESAs could be even greater than initially estimated.
Arizona’s experience serves as a powerful counter-narrative to the often-repeated claims about the financial risks of school choice. The state’s successful implementation of ESAs, coupled with its budget surplus, demonstrates that school choice can be both fiscally responsible and beneficial for students and families. Lawmakers in other states would be wise to heed the lessons from Arizona and consider the evidence before succumbing to alarmist rhetoric.
