PHOENIX — Arizona House Speaker Ben Toma and his Republican colleagues claim Empowerment Scholarship Accounts save the state money. A 12News analysis of their statements concludes their statements are false for several reasons.
Claim
Toma told 12 News, "For every child that switches from a traditional charter or a traditional district school, by in large, most district schools, the state actually saves money for every child that switches over to an ESA. Bottom line, this program is a good program. It is fiscally responsible and sustainable.”
Toma’s Republican colleagues have also promoted a similar message on social media that states, “Taxpayers Save Money With ESA’s. Funding is projected to reach $14,673 per student this year in public schools and $7,500 this year for an ESA student.” The message concludes the comparison amounts to a savings of “about $7,000 on average!”
Sources
- The nonpartisan Arizona Joint Legislative Budget Committee
- The Arizona Department of Education
- Education funding consultant Anabel Aportela
Conclusion
On its face, the message promoted by Republican legislators makes a powerful case for the value of ESAs. However, the two major data points they cite are not comparable to each other.
Further, the statements they make about “taxpayer savings” and “savings to the state” are false, given the nature of Arizona’s funding formulas. Those formulas include many fixed costs that Toma and Republican lawmakers do not account for.
ESA supporters fail to include special education funding
Taking into consideration all funding sources (federal, state and local) for Arizona public school students, it is true that the total amount is an estimated $14,673 (as ESA supporters claim).
However, comparing that total to the ESA expansion average of “$7,500” is a false comparison. The primary reason is that the larger number (public school funds) includes special education funding in the equation. The smaller number (ESA expansion funds) does not.
Special education is expensive. For example, before the ESA universal expansion in 2022, the average total for ESAs (which were limited primarily to students with disabilities) was $15,565. One special education ESA can be as high as $40,000.
According to the latest state data available, the average amount of all ESAs (accounting for special education ESAs) is $9,782.
ESA supporters do not account for fixed costs
Comparing the totals of $14,673 to $9,782 would be a more accurate comparison. But it still does not reflect the claims of “savings to the state” as Toma and Republican lawmakers say.
One reason is due to the difference between fixed costs and variable costs. A fixed cost generally does not change significantly from one year to the next and is not affected by a student’s exit from the public school system. These costs make up a significant portion of school district funds and include expenses like maintenance, utilities, debt service, and transportation. Local bonds and overrides are fixed costs over a multi-year span and are also not impacted by a change in student enrollment. One exception is a maintenance and operations override.
To suggest that fixed costs go away if a student moves out of a school district and obtains an ESA is not accurate. Taxpayers do not save money on those expenses.
Comparing variable costs of public schools vs. ESAs
A financial analysis by school funding consultant Anabel Aportela examines the non-special education variable costs that impact the state budget. Aportela’s statistical reports are used by charter schools, school districts, the Arizona School Boards Association, and the Arizona Association of School Business Officials.
Regarding students who obtain ESAs, Aportela’s summary is broken down into four categories:
- Public school districts
- “No state aid” school districts
- Charter schools
- Private/homeschooling
The analysis shows a negative impact on the state budget for every category, except for charter schools.
For example, the cost to the state budget for a student leaving a district to use an ESA is $486 for every elementary student and $601 for every high school student.
The cost is more dramatic when it involves a “No State Aid” district. These are districts in which the equalization formula is funded through local property tax revenue instead of the state budget. They include Scottsdale Unified and Prescott Unified.
In the case of a student leaving a “No State Aid” district to obtain an ESA, the cost to the state budget is $6,966 for an elementary student and $7,758 for a high school student. In those cases, equalization formula funds are also subtracted from local property tax revenue, representing a positive net impact locally.
Regarding an ESA student who was previously in private school or homeschooling, the impact on the state budget amounts to the full cost of non-special education ESAs, or $7,362. An exception to this involves a private school student who was previously using alternative state funding sources for tuition.
In the case of a charter student who obtains an ESA, the savings to the state budget is $774 for an elementary student and $862 for a high school student.
Toma calls analysis of impact to state budget 'a false narrative'
12News provided Speaker Toma with the above information and asked him if he had more detailed information to support his claims.
Toma stated by email to 12News that the news organization and Aportela’s analysis were confusing “state” with “General Fund”, the latter of which Toma accurately pointed out is only one source of funding for public schools in Arizona.
Toma also said Aportela’s report is an “outside analysis” that “does not take our school’s complicated finance formula into account and perpetuates the false narrative around this popular program.”
“School choice is here to stay, and Arizona families are happy about that,” he said.
12News asked Toma if he has supporting evidence to refute Aportela’s data. Toma did not respond.
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