Hobbs' misleading voucher memo

The focus should be on testing and eliminating the tuition tax credits.

It’s probably time for voucher opponents to give up the ghost, accept the program as a permanent feature of Arizona’s education landscape, and move on to sensible reforms that don’t challenge the program’s existence or seek to curtail or dismantle it. 

That’s easy for me to say as a longtime, steadfast voucher supporter, and therefore advice easy for voucher opponents to dismiss. But, with some 60,000 participants already in the program, the politics have dramatically, and I suspect irreversibly, changed. Denying parents and children a benefit is politically much easier than taking one away after it has been granted. 

The politics of capping or curtailing future enrollment in the program have also dramatically changed. If 60,000 children are already receiving the benefit, what’s the basis for denying the same opportunity to other children just reaching school age, or wanting to transfer into the program? Where’s the equity or social justice in that?

That’s not to say that reforms shouldn’t be on the public agenda, just not probably futile ones that seek to reverse or curtail enrollment. In my view, the focus should be on two: requiring voucher students to take state academic achievement tests; and abolishing the tuition tax credits.

To move the discussion to these reforms, voucher opponents need to cease and desist on rearguard efforts to reverse or curtail the program. Particularly misleading rearguard efforts such as Gov. Katie Hobbs’ recent jerimaid memo against the program.

In it, Hobbs’ staff echo a projection from Superintendent Tom Horne that the cost of the voucher program to the general fund will exceed what has been budgeted by a considerable amount. According to Hobbs’ staff, the program is budgeted to receive $624 million, but they estimate that it will clock in at closer to $944 million. Hobbs’ staff blames the program for throwing the state budget into a potential $320 million deficit.

Both the estimates from Hobbs and Horne assume large scale transfers to voucher programs that I find unlikely. We should know reasonably quickly, as Fall semester enrollment numbers are tabulated.

But even if the cost of the program ends up totaling where Hobbs and Horne are projecting, it’s unfair to blame it for any resulting deficit. The year started with a surplus of $2.5 billion. The higher cost of the voucher program could have easily been accommodated and still maintain a healthy reserve for other contingencies. The proximate cause of any deficit, irrespective of what specific program cost exceedances might nominally trigger it, will be the fiscally irresponsible decision of GOP legislative leaders to spend all the surplus and not retain any meaningful reserve for such contingencies – as known as an unknown can get.

The shamefully misleading statement in the memo was this: “Spending on ESA vouchers could account for 53.25% of all new K-12 education spending in the FY 2024 budget going towards only 8% of Arizona students.”

The attempt is to create the impression that voucher students are getting a disproportionate share of education spending. But a single year’s increase isn’t even in the same solar system as a truly relevant contextual figure.

In FY 2023, total K-12 spending from state and local tax sources was $12.6 billion. The $624 million budgeted for vouchers this year represents just 5% of that. And Hobbs’ higher estimate represents just 7.5% of it.

And these percentages materially overstate the share voucher students will get in 2024, since vouchers have their own funding line and public school spending will be even higher. 

Voucher students aren’t receiving a disproportionate share of education dollars. They are receiving some, but not all, of what their proportionate share would be of the common tax pot collected to educate students. 

The shamefully misleading statement also tries to create the impression that public schools are being shortchanged because of voucher funding. The record doesn’t support that.

Over the last decade, nominal per-pupil funding for public schools, again from state and local tax sources, has increased by 44%. Real per-pupil funding, adjusted for inflation, has gone up 22%. And another big increase was included in the FY 2024 budget.

Among the reforms advocated in the Hobbs memo is requiring that voucher students first attend public school. Given the changed politics, that should be, and probably is, a non-starter. If vouchers are ultimately available to all, there’s utterly no rationale for requiring a stint of some duration in a public school before receiving one. If parents and students are to be granted the widest choice of schools to attend, sentencing them to a period in a suboptimal choice is gratuitously punitive.

Hobbs' memo also advocates requiring voucher schools to administer the state’s academic achievement tests. This is on solid ground and is in keeping with the school choice model. If parents are to make informed choices they need comparative data, which only the state tests can provide. Moreover, if private schools and other voucher options are receiving taxpayer dollars, taxpayers have a right to know what their dollars are producing. 

The religious private schools adamantly oppose any state control. But a testing requirement need not be a slippery slope. And it's hard to justify taxpayer support for a private school option without one.

Curiously missing from Hobbs’ reforms is the one that should be front and center: abolishing the tuition tax credits. 

Before vouchers, support for private schools came primarily through individual and corporate income tax credits. The tax loss to the state is running in the vicinity of $250 million a year. 

If vouchers are universally available, there is no rationale for continuing the tuition tax credits. From the beginning, I described the tuition tax credits as bad tax policy in support of good education policy. 

By law, students can’t receive both a voucher and a tuition tax credit scholarship. The vouchers run around $7,200 a school year and the tuition tax scholarships tend to be in the $2,000 to $4,000 range. So, with universal eligibility for vouchers, the demand for tuition tax credit scholarships should decline, perhaps precipitously. If vouchers are accepted as a permanent part of the state’s K-12 education landscape, there’s no reason for the state to continue experiencing this revenue loss. And eliminating the tuition tax credits would largely pay for the higher voucher enrollment projections, if they come to pass. 

Voucher opponents have reason to feel that they have been enacted without a fair fight. But participation has reached a political critical mass that makes turning back the clock highly unlikely. 

At this point, time and energy would be more productively deployed looking forward rather than back.

Reach Robb at robtrobb@gmail.com.