Limit Arizona School Voucher Spending
Restoring Arizona’s voucher program to its original mission: targeted, fair, and fiscally responsible.
1. TLDR
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Repeals the 2022 law that made Arizona’s school voucher program universal.
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Restores ESA eligibility to original, need-based student groups.
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Halts new universal ESA enrollments starting January 1, 2027.
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Establishes a structured transition for families affected by the rollback.
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Prevents up to $1 billion per year in unchecked education spending.
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Protects public school funding from continued erosion due to voucher-driven enrollment losses.
2. Purpose
This measure reverses Arizona’s 2022 expansion of the Empowerment Scholarship Account (ESA) program, which opened taxpayer-funded private school subsidies to all students regardless of need or prior public school enrollment.
The original ESA program was created to serve students with disabilities and other vulnerable populations. This proposal restores that focus, reins in unsustainable cost growth, and protects public education funding while preserving targeted school choice.
3. Background
Arizona’s Empowerment Scholarship Account (ESA) program is a state-funded voucher system that gives families public money to pay for private school tuition, homeschool expenses, or other education-related costs. Instead of funding going directly to public schools, it is deposited into individual accounts that parents control.
The program began in 2011 with limited eligibility for high-need students, but in 2022, it was expanded to include all Arizona students regardless of income, disability status, or prior public school attendance. This change transformed the ESA into a universal school voucher program, shifting hundreds of millions of public education dollars into private hands with minimal oversight.
How Fast Costs Have Ballooned
| Fiscal Year | Approx. Enrollment | Total ESA Cost |
|---|---|---|
| FY2022 (pre-expansion) | ~12,000 | $189 million |
| FY2023 | ~40,000 | $587 million |
| FY2024 | ~65,000 | $745 million |
| FY2025 | ~82,000 | $860 million |
| FY2026 | 93,993 | $985.1 million |
In four years, ESA costs increased more than 420%.
This growth was not driven primarily by students leaving public schools. State reports consistently show that a large majority of new ESA recipients were already in private school or homeschool, creating a new and permanent draw on the General Fund.
Impact on Public Education
The Joint Legislative Budget Committee (JLBC) reports that in FY2026 alone:
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ESA funding increased by $129.6 million
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Public school funding declined by $58.3 million due to enrollment shifts
This matters because public schools cannot reduce costs at the same pace students leave. Buildings, staff, transportation routes, and special education services remain, leaving districts with stranded fixed costs and fewer resources for remaining students.
4. Proposed Solutions
Solution 1: Repeal HB 2853 and Re-enact Prior ESA Guardrails
This measure explicitly repeals A.R.S. § 15-2401.01 (universal eligibility) and re-establishes the ESA program consistent with the statutory and administrative requirements in place prior to HB 2853 (2022), including:
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The 45-Day Public Enrollment Rule
– Students must attend a public school for at least 45 days in the current or prior fiscal year to be eligible
– Exemptions: military families and incoming kindergarteners -
Targeted Eligibility Categories Only
– Students with disabilities
– Students in or adopted from foster care
– Students in D- or F-rated public school zones
– Children in military families
– Students residing on tribal lands -
No Double-Dipping (STO Rule)
– ESA recipients may not also receive a School Tuition Organization (STO) tax credit scholarship for the same academic year -
Instructional Integrity for Online Learning (AOI)
– ESA recipients in online-only settings must meet full-time instructional hour minimums (e.g. 500 hours/year for high school) -
Tightened Qualified Expense List
– ESA funds may only be used for core educational expenses: tuition, textbooks, curriculum, required fees
– Luxury items, travel, and non-essential purchases excluded
Solution 2: ESA Enrollment Freeze
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As of January 1, 2027, no new ESA applications may be approved based solely on repealed universal eligibility
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ADE must issue guidance by March 1, 2027, outlining eligibility restoration and appeal pathways
Solution 3: Mandatory Recertification and Sunset Date
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All current ESA users must recertify eligibility by December 31, 2027
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ADE must build and staff a recertification portal
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Accounts not verified under restored rules will be automatically closed
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Families retain ESA funds through December 2027, allowing time to transition
5. Evidence
Official State & Primary Sources (Current Fiscal Impact)
Arizona Department of Education (ADE)
ESA FY2026 Q1 Executive & Legislative Report (Nov 2025)
https://www.azed.gov/sites/default/files/2025/11/ESA%20FY26%20Q1%20Executive%20_%20Legislative%20Report_0.pdf
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93,993 students enrolled in the ESA program
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73% qualify under universal eligibility rules
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Total annualized cost: $985.1 million
Arizona Joint Legislative Budget Committee (JLBC)
FY 2026 State General Fund Budget Summary
https://www.azjlbc.gov/26AR/bh3.pdf
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ESA funding increased by $129.6 million in one fiscal year
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Public school funding declined by $58.3 million due to ESA-related enrollment shifts
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This is the first state budget document to explicitly quantify the direct fiscal loss to public schools
Tucson Unified School District (TUSD)**
FY2026 Budget Revision #2
https://go.boarddocs.com/az/tucsonusd/Board.nsf/files/DNSQED68EED7/$file/FY2026%20Budget%20Revision%20%232%20for%20Tucson%20Unified.pdf
- Documents an $8 million loss in per-pupil funding tied to voucher-driven enrollment decline
District & Community Impact Reporting
AZ Luminaria (January 2026)
“Storylines Shaping Arizona Schools in 2026: Voucher Surge, DEI Fight, and a High-Stakes Superintendent Race”
https://azluminaria.org/2026/01/05/storylines-shaping-arizona-schools-in-2026-voucher-surge-dei-fight-and-a-high-stakes-superintendent-race/
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Reports multiple Southern Arizona districts closing schools to “right-size” budgets
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Links closures and staffing reductions to ESA-driven enrollment losses and stranded fixed costs
Oversight, Accountability & Cost Structure (Supporting Context)
Learning Policy Institute (2024)
Griffith, M., & Burns, D.
Understanding the Cost of Universal School Vouchers
https://files.eric.ed.gov/fulltext/ED642536.pdf
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The 2022 ESA expansion caused a 211% cost increase in one year
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Program costs rose from $189M to $587M in 12 months
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Demonstrates how universal vouchers compete directly with public school funding formulas
Grand Canyon Institute (2024)
Cost of the Universal ESA Vouchers
https://grandcanyoninstitute.org/research/education/private-school-subsidies/cost-of-the-universal-esa-vouchers/
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Universal vouchers accounted for 55–60% of ESA spending
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Net expansion cost grew from $332M in 2024 to $429M in 2025
Arizona Department of Education (ADE)
ESA FY2025 Q2 Executive & Legislative Report
https://www.azed.gov/sites/default/files/2025/02/ESA%20FY25%20Q2%20Executive%20&%20Legislative%20Report.pdf
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73.6% of ESA users qualified under universal eligibility
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Confirms most new ESA spending did not serve high-need students
Additional Research & Policy Analysis (Reference / Defensive Citations)
Great Lakes Center (2025)
Abrams, S.E. — The Mounting Trouble with Education Savings Accounts
https://www.greatlakescenter.org/docs/Policy_Briefs/Abrams-ESA.pdf
National Education Policy Center (2024)
Huerta, L.A., & Baisden, T. — Strengthening Oversight of ESA Funding
https://files.eric.ed.gov/fulltext/ED662923.pdf
RAND Corporation (2024)
Roy, S., Schwartz, H.L., & Gable, A. — ESA Impacts on Achievement Outcomes
https://www.rand.org/content/dam/rand/pubs/research_reports/RRA3400/RRA3431-1/RAND_RRA3431-1.pdf
University of Arizona (2024)
McBeth, J.B. — Opportunity Hoarding in Arizona’s ESA Expansion
https://repository.arizona.edu/bitstream/handle/10150/672648/azu_etd_21282_sip1_m.pdf
WestEd (2024)
Berry, W., & Chait, R. — ESA Accountability Landscape
https://files.eric.ed.gov/fulltext/ED663763.pdf
6. Definitions
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ESA (Empowerment Scholarship Account): State-funded account used for private education expenses.
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Universal Voucher: ESA funding available without eligibility restrictions.
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Targeted Eligibility: ESA access limited to defined high-need student groups.
7. Clarifications
Does this eliminate school choice?
No. Families may still choose private or home education. This measure limits public subsidies, not private decisions.
Does this affect students with disabilities?
No. All originally eligible student groups retain ESA access.
Why include a transition period?
To avoid abrupt disruption while preventing continued cost growth.
8. Implementation
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Legal Form: Statutory Ballot Initiative
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Statutes Affected: A.R.S. §§ 15‑2401–2404
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Effective Date: January 1, 2027
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Transition End: December 31, 2027
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Administering Agency: Arizona Department of Education
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Projected Fiscal Impact: $580M–$1B annual savings by FY2028
9. Why This Proposal Is Critical
Arizona’s universal ESA program now consumes nearly 10% of the state’s K–12 education budget while serving a small share of students, many of whom were never in public schools.
Public schools are closing buildings, cutting staff, and stretching resources thinner each year, while voucher spending continues to grow without meaningful limits or public accountability.
This proposal restores balance: choice where it was intended, responsibility where it is required, and stability for Arizona’s public education system.
10. Call for Input (Legal Drafting Phase)
Before we move to filing, we’re asking:
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Does the language give the Department of Education enough authority to review and phase out ineligible accounts?
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Are the changes to state law written clearly enough to hold up in court?
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Should the start dates match the school year or the state budget year?
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Do we need to define anything else to stop future loopholes?