School Vouchers Blew a Massive Hole in Arizona’s Budget

This excerpted article is by ProPublica, a nonprofit newsroom that investigates abuses of power.

Arizona’s voucher experiment has since precipitated a budget meltdown. This year, the state faced a $1.4 billion budget shortfall, much of which was a result of the new voucher spending, according to the Grand Canyon Institute, a local nonpartisan fiscal and economic policy think tank. Last fiscal year alone, the price tag of universal vouchers in Arizona skyrocketed from an original official estimate of just under $65 million to roughly $332 million, the Grand Canyon analysis found; another $429 million in costs is expected this year.

As a result of all this unexpected spending, alongside some recent revenue losses, Arizona is now having to make deep cuts to a wide swath of critical state programs and projects, the pain of which will be felt by average Arizonans who may or may not have school-aged children.

Among the funding slashed:

• $333 million for water infrastructure projects in a state where water scarcity will shape the future.
• Tens of millions of dollars for highway expansions and repairs in congested areas of one of the nation’s fastest-growing metropolises — Phoenix and its suburbs
• Improvements to the air conditioning in state prisons, where temperatures can soar above 100 degrees.
• Arizona’s community colleges, too, are seeing their budgets cut by $54 million.

Still, Arizona-style universal school voucher programs — available to all, including the wealthiest parents — continue to sweep the nation, from Florida to Utah.

Advocates for Arizona’s universal voucher initiative had originally said that it wouldn’t cost the public — and might even save taxpayers money. The Goldwater Institute, a conservative think tank that helped craft the state’s 2022 voucher bill, claimed in its promotional materials at the time that the vouchers would “save taxpayers thousands per student, millions statewide.” Families that received the new cash, the institute said, would be educating their kids “for less than it would cost taxpayers if they were in the public school system.”

But as it turns out, the parents most likely to apply for these vouchers are the ones who were already sending their kids to private school or homeschooling. They use the dollars to subsidize what they are already paying for.

The result is new money coming out of the state budget. After all, the public hadn’t paid for private school kids’ tuition before.

Chris Kotterman, director of governmental relations for the Arizona School Boards Association, says that Arizona’s decision to make vouchers available to children who had never gone to public school before wasn’t realistically going to save the state money.

“Say that my parents had been gladly paying my private school tuition because that’s what was important to them — that I get a religious education. That’s completely fine,” Kotterman said. “But then the state said, ‘Oh, we’ll help you pay for that.’”

“There’s just no disputing that that costs the state more money,” he said, critiquing the claims of the Goldwater Institute and others who’d averred that this program and ones like it around the country would not be costly. “That’s not how a budget works.”

“It Isn’t Funded”

Now that vouchers in Arizona are available even to private school kids who have never attended a public school, there are no longer any constraints on the size of the program. What’s more, as the initiative enters its third year, there are no legislative fixes on the table to contain costs, despite Hobbs’ efforts to implement some reforms. “I have not heard them agree to anything that is a financial reform of the program at all,” said Sen. Mitzi Epstein, the Democratic minority leader of the state Senate, referring to her Republican colleagues.

Arizona doesn’t have a comprehensive tally of how many private schoolers and homeschoolers are out there, so it remains an open question of how much higher the cost of vouchers could go and, therefore, how much cash should be kept on hand to fund them. The director of the state’s nonpartisan Joint Legislative Budget Committee told lawmakers that “we’ve never really faced that circumstance before where you’ve got this requirement” — that anyone can get a voucher — “but it isn’t funded.”

Most importantly, said Beth Lewis, executive director of the public school advocacy group Save Our Schools Arizona, only a small amount of the new spending on private schools and homeschooling is going toward poor children, which means that already extreme educational inequality in Arizona is being exacerbated. The state is 49th in the country in per-pupil public school funding, and as a result, year after year, district schools in lower-income areas are plagued by some of the nation’s worst staffing ratios and largest class sizes.

Spending hundreds of millions of dollars on vouchers to help kids who are already going to private schools keep going to private schools won’t just sink the budget, Lewis said. It’s funding that’s not going to the public schools, keeping them from becoming what they could and should be.