The reported $700,000 of misspending in FY 2018 came amid roughly $60 million flowing to parents through the ESA program in the 2017-2018 school year. Especially given the large percentage of students with severe disabilities served by the program, that amount would almost certainly have exceeded $100 million. In other words, a 3 percent participation rate in the ESA program would amount to a mere sliver of the overall K-12 landscape, and the proportion of students opting out of their local district school for existing alternatives is more than 15 times larger than the comparable impact of ESAs. As a comparison, consider another government-administered program that involves a debit card: the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. 29 FY 2019 Appropriations Report, Arizona Joint Legislative Budget Committee, June 2018, www.azleg.gov/jlbc/19AR/ade.pdf. 43 Auditor General, Performance Audit of the Arizona Department of Education – Empowerment Scholarship Accounts Program, June 29, 2016, https://www.azauditor.gov/sites/default/files/16-107_Report.pdf. This is because ESAs actually increase the resources available to public school students on a per pupil basis. 9 All Arizona K-12 Funding, Arizona Joint Legislative Budget Committee, July 10, 2018, https://www.azleg.gov/jlbc/allfunding2001.pdf. Beyond the various indirect benefits of the ESA program on public school finances, Arizona’s FY 2020 budget enacted an explicit subsidy for the public school system using ESA program savings. As in many states, funding for Arizona’s public K-12 schools comes from a variety of local, state, and federal sources including property, income, and sales tax revenues, the state’s Land Trust endowment fund, and charitable donations.

13 Arguments Submitted Against Prop. Arizona receives over $1.1 billion of federal money to support K-12 students in Arizona each year (more than $1,000 per pupil), and a substantial portion of this money also stays in the public school system even as students exit for alternatives like ESAs. Indeed, while Scafidi himself agrees that districts face short-term fixed costs, his empirical findings from Georgia public schools “show that it is possible for school districts—large and small—to reduce instructional and support costs more than proportionately in response to a reduction in their student populations,” often even over the course of a single year. For example, the Arizona Republic reported in 2019 that the “total cost of the [ESA] program is $80 million to $82 million this year,” yet the paper conspicuously left out all mention of what educating those same students in the public school system would have cost Arizona taxpayers. 47 Jonathan Butcher, “The National School Lunch and Breakfast Programs: What Happens When Everyone Gets a ‘Free Lunch’?”, CNS News, June 11, 2019, https://www.cnsnews.com/commentary/jonathan-butcher/national-school-lunch-and-breakfast-programs-what-happens-when-everyone. As ASBA’s director of research observed, “Where is that money going to come from? In each of these cases, the ESA amounts represent a smaller cost than would have been spent on the students in a public school setting. 28 Arizona K-12 School Finance Statistics, Arizona Tax Research Association, January 2017, http://www.arizonatax.org/sites/default/files/publications/special_reports/file/breaking_down_k-12_stats_v2_0.pdf. For example, it would have required the state to contract with a financial management firm to run the program and mandated ADE to post information on all program expenditures online for maximum transparency. Reality: ESAs Increase Funding Available to School Districts. However, Arizona’s public schools actually retain a significant portion of a student’s funding even if that student exits the system for an ESA. In other words, districts have the ability to adjust in both the short and long term to accommodate changes in enrollment—which, as shown above, are driven in exceedingly small degree by ESAs. Yet when it comes to ESAs, many of these same advocates abandon their fidelity to per pupil measurements of education spending.

The Empowerment Scholarship Account (ESA) program offered through the Arizona Department of Education can help send your child to a private school or home school for little to no cost! As recently observed by Heritage Foundation scholar and Goldwater Institute Senior Fellow Jonathan Butcher, “According to the Office of Management and Budget, the National School Lunch Program lost nearly $800 million owing to improper payments in fiscal year 2018, while the School Breakfast Program lost $300 million.” As Butcher observes, “Over the last four years, these programs have had improper payment rates of 16 percent and 23 percent, respectively.”. 45 FY 2019 Appropriations Report – Arizona Department of Education, Arizona Joint Legislative Budget Committee, June 2018, https://www.azleg.gov/jlbc/19AR/ade.pdf. ; Study of the Title I, Part A Grant Program Mathematical Formulas, National Center for Education Statistics, U.S. Department of Education, May 2019, https://nces.ed.gov/pubs2019/2019016.pdf.