graduation cap on money
Budget Surplus Increases Despite 40K Students Joining School Choice Program

April 26, 2023

By Corinne Murdock |

The state budget sits at $2.5 billion, an unanticipated increase, despite a leap in school choice enrollments.

Nearly 40,000 students have joined Arizona’s universal school choice program; 7,000 have joined this year alone. Prior to the Education Savings Account (ESA) Program extension to all students, there were just over 12,100 students enrolled. At present, there are over 51,800. 

Yet, this addition of tens of thousands of students didn’t hurt the state budget; the surplus has only increased as ESA Program enrollment increased. The surplus hit $2.5 billion this month, where last June it was $1.1 billion. 

The ESA Program has also reflected a cost-saving measure for the state. Each student in the ESA Program receives scholarship funds of about $7,000 — about half of what the average public school spends on each student. Based on current program participants, that means that these students originally cost the state $725 million on average while in public schools, whereas they cost just over $362 million within the ESA Program.

Following these latest figures, ADE opened up enrollment for the ESA Program for the 2023-24 school year.

Gov. Katie Hobbs has rejected the cost-saving argument of the ESA Program. Shortly after taking office, Hobbs proposed rolling back the ESA Program, making the argument that universal school choice would bleed the state of $1.5 billion over the next decade. Yet, the Arizona public school system takes about $15 billion annually, or $150 billion over the next decade.

The Goldwater Institute, a public policy think tank who pointed out this disparity in an analysis defending universal school choice, argued that Hobbs’ arguments of frugality weren’t intellectually honest. 

“To argue that taxpayers can afford the latter, but somehow not the former, defies basic common sense,” stated the organization. 

The state legislature also increased public school funding by $600 million for this year. Anti-school choice activists continue to claim that the schools don’t receive adequate funding. 

The Common Sense Institute found that the state saved $500 million annually after about 31,000 students exited the public school system from 2019 and following the COVID-19 pandemic. They also projected an $8 million end-of-year surplus based on enrollment trends.

According to the Joint Legislative Budget Committee (JLBC) report issued last week, base revenue growth is projected at nearly nine percent – a nearly two percent increase from January’s forecast, or $750 million. 

JLBC noted that this year’s fiscal growth rate reflected a 64 percent increase in corporate income tax collections, much higher than the 10 percent increase in the federal collections. Additionally, individual income tax refunds increased by 54 percent. 

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to

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