Arizona’s $440 Million in Unspent Education Voucher Funds

Categories: Arizona Business NewsArizona State News

The unspent education voucher funds are a significant concern for Arizona's public school system.

News Summary

Arizona is facing a significant funding issue, with over $440 million in education voucher accounts remaining unspent as public schools struggle financially. The Empowerment Scholarship Accounts (ESA) program, servicing 84,196 students, has seen a 23% increase in unspent funds in one year. Critics argue this favors wealthier families and detracts from public education. Amid budgetary constraints, the state debates the implications of these unused funds and the role of the ESA program in the educational landscape.

Arizona is facing a significant issue as reports reveal that over $440 million in education voucher accounts for private and homeschooling remain unspent amid ongoing challenges in funding public schools. The information was obtained through a public records request, after the state treasurer previously declined to disclose these figures.

Currently, there are 84,196 students enrolled in the Empowerment Scholarship Accounts (ESA) program, which allows parents to withdraw their children from public schools and utilize state funds for private education or homeschooling. Each ESA typically provides funding that ranges from $7,000 to $8,000 per student per year, with students with disabilities potentially receiving over $40,000 annually. Available data indicates that students without disabilities are sitting on approximately $220 million in unspent ESA funds.

The ESA program’s expenses are projected to reach about $1 billion during the upcoming academic year, a substantial increase from previous budgets. Critics have noted that the amount of unspent ESA money has surged by 23% in just one year, reflecting a growing concern among education advocates. Notably, nearly 10% of ESA accounts are classified as inactive, totaling around $50 million, indicating that a portion of enrolled families may not actively utilizing the funds allocated to them.

This funding issue is well-timed with serious budgetary setbacks for public schools in Arizona, which ranks 49th nationwide in per-student spending on public education. As the state’s public school system struggles for resources to cater to its students, the substantial sum of unused voucher funds has sparked debate among lawmakers and citizens alike.

Governor Katie Hobbs has raised eyebrows by asserting that ESA funds were never intended to cover post-secondary education expenses, underscoring the need for “common-sense guardrails” to direct the funds appropriately. Critics of the ESA program also argue that it has favored higher-income families while undermining public schooling and high-performing charter schools.

In 2022, legislation was passed to allow a universal voucher system with no income requirements, leading to a significant expansion of the ESA program. This change prompted concerns about the misuse of public money, as critics suggest some families could use the funds for non-educational or luxury purposes. GOP lawmakers defending the ESA program have resisted proposals to implement financial eligibility caps or limits based on family income.

In addition to these concerns, a recent legal battle has surfaced involving two mothers who filed a lawsuit against the state over new curriculum requirements imposed on ESA funds by the state attorney general. The attorney general’s office contends that reimbursements for non-curricular items violate existing state laws, further complicating the educational landscape in Arizona.

The history of the ESA program dates back to its establishment in 2012, but it underwent significant modifications in 2022, opening access to all students rather than being limited to those with specific needs or backgrounds. The dramatic rise in enrollment—indicative of the program’s popularity—has fueled ongoing discussions surrounding its long-term sustainability and impact on public education.

Amid these developments, state lawmakers remain divided. While many express concern over the implications of unspent funds on public school funding, others see the increasing number of ESA participants as a testament to the program’s success. As Arizona navigates the complexities of educational funding, the future of both the ESA program and public education hangs in the balance.