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In her Jan. 9 State of the State address, Gov. Katie Hobbs said the expansion of Arizona’s Empowerment Scholarship Account program would bankrupt the state’s budget.

“Funding this expansion is poised to cost Arizona taxpayers an estimated $1.5 billion over the next 10 years if left unaddressed,” she said.

In an analysis released Wednesday, the nonprofit Common Sense Institute posits that the shift of students away from public schools is likely to save enough money to cover the increase and leave the state with more income than it had before.

According to Arizona Department of Education data, public school enrollment has fallen by 31,000 students since 2019. Meanwhile, charter school enrollment has increased by 20,000.

Arizona’s ESA program, which allows applicants to spend a portion of taxpayer dollars on private school costs, has dramatically expanded since it was made available to all students in 2021. The institute’s analysis of state spending shows 20,000 additional students are expected to draw funds from the program for their non-public school education.

“Based on current data, the increase in annual ESA program costs attributable to universal eligibility is $197.9 million. Existing program costs add another approximately $179 million, for a total cost of about $377 million,” the report said. “While the cost of the ESA’s program under universal eligibility exceeds the additional $33 million initially appropriated by the Legislature, the Arizona Department of Education likely has sufficient excess funding to more than cover the difference, due to continued post-pandemic enrollment declines.”

Using ADE data, CSI estimates an $8 million end-of-year surplus as of the first quarter of the year, given system-wide enrollment trends.

The report came on the same day newly-elected Superintendent Tom Horne announced ADE had approved 24,366 delayed ESA requests, totaling more than $22.2 million delayed since the second quarter of 2022.

“When I took office, the commitment I made is that the Arizona Department of Education is a service organization committed to raising academic outcomes and empowering parents. On my first day on the job, I demonstrated my resolve to fulfill that mission. Delays and inefficiencies of this kind are unacceptable and won’t be repeated,” Horne said.

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