In Defense of ESAs: Lessons Learned from Arizona
As students in Arizona head back to school in record levels of heat, a scorching debate is unfolding over Arizona’s Empowerment Scholarship Account program, often referred to as the school voucher program.
In September 2022, Arizona made school-choice history by expanding the program to all families, becoming the first state to offer universal access to education savings accounts (ESAs). Participating families now have the autonomy to use 90% of the funds that they would have spent on sending a student to a public school for allowable expenses—be it for private school tuition, homeschooling resources, tutoring, or special education services. West Virginia, Arkansas, Florida, Indiana, Iowa, Oklahoma, and Utah have followed Arizona’s lead in adopting universal eligibility for similar programs.
Nevertheless, Arizona’s first-mover advantage is proving to be a double-edged sword. The program has faced an onslaught of criticism characterizing its impact as merely subsidizing private education for the affluent.
With K-12 education dominating discourse in policy issues and on the campaign trail, it’s critical that leaders effectively communicate the benefits of ESAs. The educational landscape has changed since Covid-19, and ESAs have the capacity to adapt to real structural issues, such as the decline in public school enrollment and the country’s demographic changes, while ensuring that tax dollars are properly allocated to fund each student’s needs.
Differentiating ESAs from Vouchers
The term “voucher,” often used interchangeably with ESAs, creates a misconception. While a voucher implies a one-time payment transfer from the state to a private school, ESAs offer more versatility, where spending is subject to guidelines for appropriate use and allocated based on the recipient’s needs for the school year. ESAs are thus designed in a manner similar to Health Savings Accounts, accommodating variety and choice with simple safeguards.
This framework not only places a meaningful limit on the expenditures of each taxpayer using ESAs but also provides an opportunity for Arizona’s K-12 funding to stimulate the local economy and recycle funds so that they remain in the community they serve. ESAs empower taxpayers to purchase goods and services from a range of local services such as tutors, youth sports programs, community colleges, and even martial arts studios.
Rightsizing: Fiscal Accountability for Local Taxpayers
Opponents argue that Arizona’s ESA program could bankrupt the state by allocating double the taxpayer funds towards education. This claim overlooks statewide trends that suggest the opposite.
As Arizona’s public school enrollment declines, the state is likely to witness consolidation and closures among districts, which would free up funds from property taxes and school facility costs. In addition, the state’s birthrates have yet to recover from post-global financial crisis lows. These factors should naturally lead to expenditure reductions in district administration in favor of essential and irreplaceable services in schools.
Such circumstances also present an opportunity to repurpose underutilized public assets and real estate for public and/or private redevelopment, ultimately benefiting taxpayers and “rightsizing” school districts based on the populations they attract, instead of those they feel entitled to enroll.
On a per-pupil basis, the combination of local, state, and federal funds leads to $14,000 in funding for a single public school student. By contrast, ESA recipients receive no additional local or federal support, forcing them to be far more frugal than their public school counterparts. This structure will naturally save the district money per pupil.
The latest figures show nearly 62,000 students have adopted the program. This surge, while significant, owes to the sudden expansion in universal eligibility and does not indicate a recurring trend for the coming years. Moreover, a large fraction of this initial growth stemmed from students who were already enrolled in a private educational option—and had thus never been accounted for by the state. Any future influx would either have to tap into the pool of new families moving to the state or result from students withdrawing from public schools.
ESAs have the potential to shift the value chain in education in favor of direct service providers instead of maintaining expensive and underused facilities and administrative overhead. In public school districts, compensation favors those farthest from the classroom. By contrast, under appropriate fiscal scrutiny, ESAs can empower families to allocate funds away from buildings and bureaucracy, directly investing in the services necessary to educate their children.
Currently, taxpayer funds are not allocated efficiently to meet the state’s educational needs. Local communities should be empowered to determine whether to continue funding declining public schools.
The lessons learned in Arizona will shape a brighter future for the scalability of ESA programs across the country. Beyond empowering families with choice and agency over their children’s education, ESAs can help drive long-overdue efficiencies necessary for traditional school districts that have failed to adapt.
