by Matthew Holloway | Jan 29, 2025 | Education, News
By Matthew Holloway |
In a recent report, the Common Sense Institute of Arizona (CSI) addressed the gradual slowing of enrollment in Arizona’s Empowerment Scholarship Account (ESA) program and traditional public school classrooms. The report shows that despite narratives for one or the other, the decline in both can be explained quite directly as a matter of demographics and parental choice.
In a press release issued Monday, CSI explained, “Headlines about declining enrollment and the subsequent financial struggles this creates in Arizona’s public schools have caught the state’s attention. However, CSI’s data shows this shift was inevitable, driven by dramatic demographic changes and a shift in enrollment preferences during the pandemic.”
Among CSI’s findings, it found that the school-age population of Arizona peaked in 2021 and is projected to decrease by 40,000 by 2028, heavily impacting an educational system which was structurally predicated on the assumption of a continually growing population.
CSI added, “The 2012 kindergarten cohort—the state’s largest ever—is now preparing to graduate. Future K-12 enrollment is not expected to grow in the foreseeable future.”
CSI observed further that during the COVID-19 lockdowns, Arizona’s public schools lost 50,000 enrolled students from 2020-2021. Only 18,000 of those students re-enrolled in charter schools with the remaining approximate 32,000 otherwise unaccounted for. It is likely that this number presents a combination of expanded home schooling, relocation out of Arizona, and even enrollment in private schools. Indeed, the report indicates that private school enrollment spiked by 33% over that period with homeschooling experiencing a surge from 2% of the total student population to 11%, and settling back to 6% as of today.
Glenn Farley, CSI Arizona’s Director of Policy and Research summarized, “Arizona’s classrooms are entering a new era. The numbers have been clear for years: the system built for growth has reached its peak. Moving forward, policymakers must adapt to a smaller, more diverse student population and rethink how we allocate resources.”
The CSI report noted the effect on budgetary considerations has been extreme. “Declining public school enrollments since 2020 reduced public K-12 funding formula costs by an estimated $450 million/year, and growing, compared to pre-pandemic trends. Since last year, the universal ESA program has returned these ‘missing kids’ to the public K-12 rolls – reinvesting prior ‘savings’ into education.”
The ESA, a subject of controversy in the state legislature, has reached a “steady state” according to CSI, with the recent period of rapid growth unlikely to be repeated and future increases owing almost exclusively to parental and student choice.
CSI concluded, “Demographic changes likely mean fewer school-aged children and lower overall enrollment across Arizona’s publicly funded K-12 options over the next ten years. And ultimately it is this demographic change, and pandemic-era changes in parental behavior that are changing K-12 in Arizona – and not-so-much universal ESA itself.”
As previously reported by AZ Free News, Governor Katie Hobbs’ repeated attacks on ESAs have centered primarily on the narrative of the program alternately being “rife with waste, fraud and abuse,” being costly to the state budget, and calling for a repeal of the popular program.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by AZ Free Enterprise Club | Jan 17, 2025 | Opinion
By the Arizona Free Enterprise Club |
With the new year here and the 2025 legislative session officially underway, Democrats are already proving they can’t learn a lesson. Led by Governor Katie Hobbs, one of their primary targets is once again…you guessed it…Arizona’s Empowerment Scholarship Account (ESA) program. Stop us if you’ve heard this before.
You would think that Democrats would find a different target after getting trounced in an election where teachers’ unions and other anti-school choice groups made it a referendum on school choice. But no. After 2 ½ years and multiple failures trying to overturn school choice, they’d rather double down on their same tired and out-of-touch policies.
This time, Hobbs and the Dems say they want to roll back ESAs because of all the supposed “fraud” in the program. Never mind the fact that the rate of waste, fraud, and abuse in the ESA program is extremely low. Never mind the fact that ESAs have proven to be far more financially accountable than other government programs. Democrats don’t care about facts. Instead, they want to regulate this popular program while Arizona’s Democrat Attorney General Kris Mayes asks for more funding to investigate ESA fraud.
But here’s a message for Hobbs, Mayes, and the rest of the Democrats:
If you care so much about fraud, why not investigate Arizona’s public school districts?
They could start with Isaac Elementary School District (IESD)…
>>> CONTINUE READING >>>
by Daniel Stefanski | Jan 17, 2025 | Education, News
By Daniel Stefanski |
As another legislative session begins in Arizona, Republicans and Democrats are again bringing the all-important issue of school choice to the forefront of the public debate.
On Monday, Governor Katie Hobbs ushered in the start of the 57th Regular Session of the Arizona Legislature with her State of the State address, where she took time to criticize the Empowerment Scholarship Accounts (ESA) program. In her speech, Hobbs said, “The current program is unchecked, flawed, and rife with exploitation. Three years ago, it went far beyond its original purpose, which was to support kids with special needs and military families. Today, it has ballooned into a billion-dollar boondoggle increasingly scamming Arizonans. Other entitlements funded by taxpayers have strict oversight and income requirements. Yet the ESA program has the privilege of virtually no safeguards.”
Hobbs proposed changes to the ESA program for a “balanced solution that supports families and finally brings real and effective guardrails to ESAs.” Her solution was to “institute responsible income caps, ensure taxpayers know where their money is going, and create real accountability for taxpayer dollars.”
The governor’s remarks were met with immediate criticism from Republicans and others who support the expanded ESA program. Superintendent of Public Instruction Tom Horne said, “Under my leadership, the department has done a full-court press against waste and fraud. I hired both a program auditor and an investigator, which had not been done before. I require that every expenditure be for a valid educational purpose and have been attacked for doing that. The Governor needs to pay more attention to what is going on. She gets an ‘F’.”
Senate President Pro Tempore T.J. Shope added, “We will also protect parental choice, so that every child in the state has the ability to succeed in the classroom, no matter their zip code or financial status.”
Common Sense Institute Arizona wrote, “In her State of the State address, Governor Hobbs asked lawmakers to compare Arizona’s ESA program to other government entitlement programs with respect to accountability and transparency. Luckily, we already did! And it turns out that improper payment rates in the Arizona ESA program are a fraction of those in other government programs like Medicaid, Unemployment Insurance, and SNAP.”
Jason Bedrick said, “The voters made their will clear by re-electing those who supported ESAs and expanding their legislative majority. The legislature should reject Gov. Hobbs’ attempts to undermine ESA families.”
On the flip side, Governor Hobbs’ comments received support from her allies, who have long attempted to shrink, regulate, or eliminate the historic ESA expansion program in Arizona. Save Our Schools Arizona Executive Director Beth Lewis responded, “It is time to end the rampant waste, fraud, and abuse in the universal ESA voucher program. We commend Governor Hobbs for championing public education and pushing for much-needed voucher reform. We sincerely hope legislators like Senate President Petersen who name ‘fiscal responsibility’ their top priority will bring long-overdue guardrails to this irresponsible program, which now costs taxpayers nearly $1 billion annually.”
Hobbs and legislative Republicans will continue to bicker about the future of school choice in Arizona, but not much – if anything – will be done this year (and likely the next) to regulate ESAs per the governor’s insatiable desire. Over the past two years, Arizona Senate President Warren Petersen successfully fended off ferocious political attacks that targeted ESAs and other school choice opportunities for Arizonans. He will again be counted upon, along with his Republican colleagues in the Arizona House and Senate, to protect one of the top states in the country for school choice.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Matthew Holloway | Jan 16, 2025 | Economy, News
By Matthew Holloway |
The 2025 Free Enterprise Report from the Common Sense Institute Arizona (CSI) was released Monday and ranked the state of Arizona amongst the states in education as well as the new indexes of economic performance and economic momentum.
According to Katie Ratlief, Executive Director of CSI Arizona, “Arizona continues to lead the way in key areas like tax policy, state budgeting, and educational choice, proving the impact of data-driven, common-sense policies.”
“However,” she added, “challenges in housing, public safety, and homelessness are beginning to slow our momentum. While Arizona remains a top destination for growth, addressing critical issues like crime and the housing crisis will be essential to sustaining our competitiveness. Fortunately, the policies that fueled much of Arizona’s success are still in place, and with a renewed focus on data-driven solutions to address issues like crime and housing, Arizona can solidify its position as one of the most competitive states in the nation for years to come.”
The report details Arizona’s positioning in the emerging recovery of 2025, particularly highlighting the success of the state and its persistent momentum. In an overall measure, the state ranked 27th in “free enterprise competitiveness,” with CSI emphasizing advances in taxes, state budgeting, energy and education, but noting the heavy limitations imposed by housing shortages and rising costs.
In education, Arizona ranked second in the nation in share of students enrolled in school choice options, seemingly ratifying the state’s first-in-the-nation universal Empowerment Savings Account (ESA) program which now provides financial support to over 83,000 families.
The report noted, “Arizona today has the most open K-12 educational market in the country, and hosts a diverse network of District, Charter, and private school options. Since the pandemic, its home- and microschool space has expanded rapidly. Today, about a third of Arizona’s K-12 students are not enrolled in the traditional District school system.”
The report also highlighted Arizona’s Energy situation, noting in a post to X, “Arizona remains a top 20 state for energy competitiveness, boasting one of the most reliable electricity grids in the nation.”
CSI explains, “Thanks to maintaining the nation’s largest nuclear power plant and the moderate and deliberate pace of adoption of wind and solar energy sources (supplemented by robust investment in natural gas), the state’s electrical grid remains reliable and affordable.”
Finally, Arizona’s advantageous tax system was highlighted with the 2.5% flat income tax and property tax instant depreciation of business investments cited in particular for contributing to an extremely competitive tax and regulatory system. Arizona ranked 7th in the nation on the Taxes & Fees Competitiveness Index.
The report observed, “Arizona has significantly reduced its tax burden in recent years, most notably by adopting a 2.5% flat personal income tax rate. This reform cut the top marginal tax rate from 4.5% to 2.5%, simplifying the tax code and making Arizona one of the most competitive states for income taxation.”
Looking to the future, CSI pointed to the steps Arizona legislators have taken to insulate the state against capricious tax hikes, explaining “this tax structure is well protected. Rules requiring supermajorities for statewide tax increases by the State Legislature were extended in 2022 to initiatives and referendums that would have voters approve the tax increases.” The report continues, “Arizona’s competitive ranking for its tax structure is not only unlikely to get worse but may improve (even if further reform is more incremental) due simply to the relative erosion of the position of other states that lack these structural protections.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Daniel Stefanski | Dec 17, 2024 | Education, News
By Daniel Stefanski |
Amid an increased flurry of attacks on Arizona’s school choice opportunities, a prominent organization is countering with the facts.
Citizens For Free Enterprise responded to another derogatory statement about Arizona’s historic Empowerment Scholarship Account (ESA) azprogram from the state’s Democrat Governor, Katie Hobbs. Earlier this week, Hobbs posted, “ESAs are rife with waste, fraud and abuse, and this will only make it worse. This empowers bad actors who are spending taxpayer dollars on ski passes, luxury car driving lessons, and grand pianos. We need accountability and transparency for this almost billion dollar program.”
Hobbs was reacting to a recent news story about the Arizona Department of Education’s new policy to automatically approve a vast majority of outstanding reimbursement requests from parents in the program, which was announced by Republican Superintendent of Public Instruction, Tom Horne, at a Board of Education meeting.
The response from Citizens For Free Enterprise stated, “FACT CHECK: Arizona’s universal school choice program is a model of accountability, transparency, and security, according to CSI Institute Arizona. The over 83,000 Arizona families using ESAs just want the best for their children – and Katie Hobbs should stop attacking them.”
Others weighed in on the governor’s attack ahead of the 57th State Legislature, starting in January. State Representative Travis Grantham said, “I wish Democrats cared this much about government waste across the board. Why do they only care about it when it’s privatized and / or it gives the citizenry more choices?”
Fellow legislator Austin Smith added, “Not only was Katie Hobbs education agenda rejected; she lost seats in the house and senate. Bold move Cotton, let’s see if it pays off.”
Not everyone was opposed to Hobbs’ statement. Democrat State Representative Oscar De Los Santos replied, “From forging documents to scam taxpayers to abusing funds for luxury items, the private school voucher program is filled with waste, fraud, and abuse. Every Arizonan should be outraged. The DOGE committees should take a look at this disaster.”
Matthew Ladner, a school choice advocate, weighed in on De Los Santos’ statements, saying, “The waste, fraud and abuse in the ESA program is a small fraction of programs you support. If you’d like to eliminate all the programs with ESA level or higher abuse you will make Ron Paul a very happy man!”
In addition to its statement, Citizens For Free Enterprise shared a document of facts from the Common Sense Institute Arizona (CSI) to counter the myth that “ESA’s are subject to rampant fraud and abuse.” On that document, CSI highlighted that there was more than $2 billion of “Medicaid billing fraud in Arizona revealed by a single investigation into pandemic-era relaxed program standards,” and that “Arizona’s share of estimated pandemic-era fraudulent U.S. Unemployment Insurance payments” was $2.3 billion. On the flip side, according to CSI, “the sum-total of all specific, public allegations of ESA fraud …identified to-date, since universal eligibility expansion” was just around $650,000 – a far cry from the fraud in other state programs and handouts.
CSI concluded that “there are specific statutory requirements governing the use of ESA monies – including guidelines on permissible expenditures and a requirement that ADE conduct random and regular audits to ensure compliance. Within that framework, the program has been able to run well, especially compared to similar programs.”
While officials and organizations may have again successfully pushed back on Demcorats’ renewed, false detractions of the ESA program, Horne’s handling of this significant portion of the department he was entrusted to oversee continues to present major headaches for Republicans and school choice proponents. Since Horne’s first ESA Director, Christine Accurso, left the office last summer, he has been faced with a rising number of reimbursement requests and other issues that he has struggled to address with his team. Horne also capitulated to Democrat Attorney General Kris Mayes earlier this year, when she challenged him about the lack of “curriculum” attached to certain requests, adding additional regulations for parents to comply with the attorney general’s threats. Horne’s backsliding here came after he had repeatedly stood up to Mayes and Hobbs’ saber-rattling against the school choice program.
Additionally, Horne recently blamed a number of external factors, including Arizona state legislators, for the skyrocketing number of unfulfilled reimbursement requests. In a November press conference, Horne noted a fix to the ESA program that allowed parents to bypass ClassWallet to obtain reimbursements, stating, “Somebody went to the Legislature last year and got them to pass a bill saying they could do it by reimbursement… We’ve asked the Legislature, in the future, ‘Please ask us before you pass something so we can tell you what the consequences will be.’”
While the program has continued to grow over the past two years, Arizona Education Department officials have failed to satisfactorily explain why the processes put in place by Accurso before her departure were unable to suffice for smooth management and processing of reimbursements and other factors of ESA program oversight and delivery going forward. Accurso was able to save the program from massive and glaring issues created by Horne’s Democrat predecessor, adding staff to her team and reducing the backlogs to almost nothing, while accounting for an exponential increase in students and families realizing the benefits of ESAs.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.