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Arizona Lawmakers Implement Nation’s First Universal Education Savings Account Program

By Kevin Mahnken | April 11, 2017

Photo: Getty Images
Arizona lawmakers approved a monumental expansion of private school choice last week, creating the first universal tax-advantaged education savings program in the United States.
The Empowerment Scholarship Accounts, as they are known, currently provide money from the state’s general fund directly to parents of students with special needs, who may use it for private and parochial school tuition or other educational costs. More than 4,000 students in the state now use the accounts, which have dispensed about $100 million since their inception.
Last Thursday’s move makes ESAs available to an additional 5,500 students across the state each year. Though any family may apply, the legislation caps the number of participants at 30,000 by 2022. (Nevada passed a similar ESA bill in 2015, but a lawsuit sent the program back to the legislature to reconceive how it will be funded.)
Choice advocates were jubilant in their victory. Gov. Doug Ducey, a Republican who has made education one of his signature issues, trumpeted his support for the law in a statement Friday. “Today, we lead the nation again with a bill that’s fiscally responsible, improves accountability and transparency, and prioritizes low-income students and families,” he said. “When parents have options, kids win.”
The Goldwater Institute, a think tank named for the state’s archconservative Sen. Barry Goldwater, began promoting the idea of ESAs over a decade ago. It has watched them steadily grow over the course of six years and two governorships, morphing from a tiny initiative into one that could soon affect tens of thousands of students. Goldwater Education Director Jonathan Butcher said the expansion was a testament to the program’s early successes.
“We’ve got something here that is helping families where their child wasn’t a fit in their local school,” Butcher told The 74. “ESAs are bringing something to families that they didn’t have before, that they weren’t able to find in the traditional school system.”
Enacted in 2011 under Ducey’s predecessor, Republican Gov. Jan Brewer, the Empowerment Scholarship Accounts were used by 115 special needs students (a neat 0.1 percent of the 115,000 such students throughout Arizona) in their first year of existence, at a picayune cost of $1.4 million. Since then, the legislature has acted to extend them to foster children and children of active-duty military personnel or those killed in action, as well as those living on Native American land or attending schools rated D or worse in the state’s A–F grading system.
But last Thursday’s vote marked the most significant milestone of all. Now every pupil in the state will be eligible to receive up to 90 percent of the state’s per-pupil education funding (low-income families will receive 100 percent) to defray the costs of a private school education. Even with an annual limit on new students, that makes Arizona the first state in the country to adopt a universal system of private school choice.
“Technically, Arizona will be the first, because we already have an operational program. And that’s an exciting thing,” Butcher said. “We’re very happy for the potential of what’s going to happen in Nevada too. It’s a good day for families and students.”
The bill’s detractors, unsurprisingly, don’t share in his exultation. The bill passed through the state’s Republican-dominated legislature mostly on party lines, with a few GOP defectors expressing concern over channeling public funds to the private sector. The past six Arizona teachers of the year co-signed a letter blasting Ducey for investing in religious schools rather than raising teacher salaries, while other critics pointed to an Arizona Republic report indicating that most ESA beneficiaries come from affluent school districts.
Although the governor was reportedly advocating behind the scenes to take the accounts statewide, he avoided public comment on what has become a divisive policy. State Democrats were particularly vocal in their outrage.
(The 74: Video Explainer: Understanding Education Savings Accounts — in 90 Seconds or Less)
“I think it’s the beginning of the end of public education in Arizona if this is allowed to stand,” Senator Steve Farley of Tucson told The 74. Pointing to nearly a decade of education funding cuts since the start of the Great Recession, he said that expanding ESAs would accelerate the troubles of a besieged school system. “We already have 44 percent of our teachers leaving Arizona after two years, and this wholesale attack on public education won’t help in that regard.”
The law’s passage has already led to an improbable recall effort against Ducey, though Farley argued that Democrats should instead use the issue as a cudgel during the governor’s 2018 election campaign. “The folks behind this voucher program, their explicit intention is to privatize public education,” he said. “The only way to change this is to elect a different governor and a different legislature.”
In two years, his party will have the opportunity to do just that. In the meantime, Arizona is set to begin perhaps the biggest experiment with private school choice in the nation’s history.
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