Arizona Enacts Statewide School Choice Measure

Published May 15, 2012

Arizona Gov. Jan Brewer signed a bill making approximately 100,000 more children eligible to receive their state education dollars in an account parents can use to purchase things like private school tuition, tutoring, and textbooks.

Arizona became the first state in the nation to offer education savings accounts (ESAs) when it created them for special-needs students in 2011. ESAs deposit state per-pupil funds into a savings account parents can use for approved education expenses, for which they must quarterly submit receipts.

The bill Brewer approved expands them to military families, adopted foster children, and children attending public schools graded D or F by the state. When it goes into effect for fall 2013, approximately 230,000 students will be eligible for the accounts, which are worth $3,400, on average.

“The governor had [foster children] in her mind as a population that could be served by this program,” said Jonathan Butcher, education director at the Goldwater Institute. “The adopted children idea fits well in the pattern of how vouchers and education savings accounts have developed and matured in Arizona.”

Foster children were among the high-need students Arizona lawmakers included in the first private school choice legislation Arizona passed, which was overturned by the state Supreme Court. Subsequent choice bills were designed to avoid contrary court judgments and have successfully weathered several.

Eighteen states and Washington, DC offer private school choice through ESAs, vouchers, or tax credits, according to the Friedman Foundation for Educational Choice. This year, Arizona lawmakers also raised the cap on tax credit-worthy contributions to nonprofits that grant private tuition scholarships. The legislature passed the ESA expansion by wide margins.

Ending Double-Counting
This bill is Brewer’s second look at expanding ESAs. She vetoed an almost identical bill in March, citing her wish to first negotiate a state budget.

The original ESA, for special-needs students, did not draw from Arizona’s school funding formula. The new ESA law does, incorporating recipients into the tax money the state redistributes to schools to fill gaps in poorer districts and top off local property taxes.  

“Arizona’s funding formula is old and doesn’t work very well,” Butcher said. “When you have a state like Arizona with charter schools and ESAs, sometimes the fund is paying for [students] in their old school and their new school. It has padded public schools.”

Arizona public schools receive funding based on the number of students they enrolled the previous year. This means public schools continue to receive funds for one year for students that leave for private or public charter schools. Including ESA students in the state funding formula prevents this double-counting and allows the program to remain revenue-neutral.

Targeting Special Populations
“In Arizona, somewhere around 75 percent of our fourth graders are not proficient in reading on [the National Assessment of Educational Progress]. That’s a number that hasn’t changed in 20 years,” Butcher said. The John Hopkins University and Alliance for Excellent Education issued a 2010 report concluding that 12 percent of Arizona high school students attend “dropout factories,” its term for the nation’s 2,000 schools with the worst graduation rates.

The state’s consistently poor academic performance has pushed policymakers to increase accountability and school choice, which include last year’s switch to an A-F school grading system. ESAs allow better options for students previously required by their residence to attend D- and F-rated schools, Butcher said, and for other high-needs students for whom one type of school is not always the best fit.

“Military members nationwide, and all families for that matter, deserve the ability to choose the schools, public or private, that work best for their children,” said Robert Enlow, president and CEO of the Friedman Foundation.

To apply for an ESA, a student must currently be attending an Arizona public school.

Image by Gage Skidmore