Gov. Katie Hobbs says public education is woefully underfunded, but fiscal reporting indicates districts are flush with cash.
According to the latest Arizona Department of Education annual financial report, public school districts carried forward more than $8.3 billion in unspent funds from the 2024-25 fiscal year.
That is nearly equivalent to total appropriations that the state allocated for public education in the 2024-25 fiscal year: $8.9 billion, which goes beyond K-12 schools to include the Board of Regents, community colleges, and universities.
That $8.9 billion accounts for 55% of total appropriations out of the state’s general fund, which amounted to more than $16.2 billion in the 2024-25 fiscal year.
Within the $8.3 billion carried over from the 2024-25 fiscal year:
$1.6 billion for bond building
$1.3 billion for maintenance and operations
$1.2 billion for “other” funding
$941,000 for the Classroom Site Fund and Instructional Improvement Fund
$884,000 for unrestricted capital outlay
$708,000 for federal projects
$672,000 for bond principal deduction
$393,000 for debt service
$248,000 for food service
$150,000 for adjacent ways
$147,000 for school plant
$41,000 for state projects
The emergency deficiencies correction, building renewal, and new school facilities funds had negative balances of approximately $395,000, $19 million, and $33 million, respectively.
Last fall, the Common Sense Institute estimated that school districts hold more than $20 billion in combined cash reserves and underutilized real estate.
Public school district enrollment has declined steadily since 2008, more so in recent years after the state allowed universal enrollment for the ESA program in 2022.
Hobbs has advocated for lawmakers to revive Proposition 123, which would take around $300 million every year from the State Land Trust Permanent Fund and give it to education. $300 million is equivalent to a drop in the public education fund bucket: approximately 3% of what the state allocated from its general fund in the 2024-25 fiscal year.
Hobbs credited Prop 123 as providing “critical funding” for districts and educators in her State of the State address earlier this year. The governor said the funding provided by the proposition curbed the budget shortfall and would enable teacher pay raises and prevent future tax hikes.
The governor and lawmakers have failed to reach a consensus on renewing Prop 123. The proposition expired in June 2025.
Teresa Leyba Ruiz, the Democratic nominee for superintendent of public instruction, wants to claw back another 3% from a potential funding source. As reported earlier this week, Ruiz proposed reverting the $350 million set aside in Empowerment Scholarship Account (ESA) program funds back to public schools.
32% of educators reported having an external job and 21% of educators indicated additional paid responsibilities and a second job outside their school, according to a 2024 report by Hobbs’ Educator Retention Task Force issued in partnership with the Arizona State University Morrison Institute for Public Policy.
That same report identified inadequate salary, unpaid duties and hours, pay differences, and salary compression as issues impacting retention. The report estimated that only 16% of educators agreed that their salary was satisfactory and motivated them to stay in their professions.
A more recent poll of more than 9,300 educators during the 2025-26 school year by the Arizona Department of Education also found that teacher pay was one of the biggest sources of dissatisfaction for educators.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
A Maricopa County Superior Court judge ordered Arizona election officials Tuesday to rewrite the descriptive title and “yes” and “no” statements for Proposition 212. The judge found that the current version omits substantial changes to enforcement and government oversight and misleadingly describes Arizona’s Empowerment Scholarship Account (ESA) program as a “school voucher program.”
Judge Julie Ann Mata enjoined Secretary of State Adrian Fontes from using the current language on the official ballot or in the publicity pamphlet. She also issued a writ directing Fontes and Attorney General Kris Mayes to revise the language in accordance with state law and her ruling.
The court left the exact wording to Fontes and Mayes under their statutory drafting and approval authority. Mata declined to order the state to adopt replacement language proposed by the plaintiffs and denied their request for attorneys’ fees and costs.
Daryl Groves and the Arizona Free Enterprise Club (AFEC) filed the case against Mayes and Fontes on July 28. Protect Education, Accountability Now, the political committee sponsoring Proposition 212, participated as a friend of the court in support of the challenged language. The defendants argued that the wording fairly summarized the measure and complied with A.R.S. § 19-125(D).
AFEC called the order a “major victory for Arizona school choice” and said, “Arizona voters deserve the truth.”
BREAKING NEWS: MAJOR VICTORY FOR ARIZONA SCHOOL CHOICE
The Arizona Free Enterprise Club has won at the trial court in our lawsuit challenging the misleading ballot language drafted for Proposition 212: the union-backed initiative targeting Arizona’s ESA program.
Mata wrote that the court’s review addressed the accuracy of the ballot language and left the policy merits of Proposition 212 to voters.
The version posted by the Secretary of State before the ruling states that Proposition 212 would limit ESA eligibility to families earning $150,000 or less per year, with specified exceptions; prohibit spending on noneducational and luxury items; impose qualifications on tutors; require accreditation or testing for participating schools; and generally return unspent annual ESA allocations to the state.
The full initiative also gives the sponsoring committee or its designee standing to initiate or intervene in litigation to enforce or defend the measure. Mata found that authority to be a substantial change that the ballot title or description must disclose. She found that the existing phrase “other rules and restrictions” failed to adequately inform voters about it.
Mata also found that the “yes” statement omitted a substantial change to two existing statutory limits on government control or supervision of nonpublic schools and homeschools. Proposition 212 would amend those provisions to permit control or supervision provided elsewhere in the ESA chapter for schools and homeschools receiving ESA funds. The court did not rule on the constitutionality of that proposed change.
The judge separately found the phrase “school voucher program” misleading. She cited Arizona decisions that invalidated two voucher programs and later upheld the ESA program under a different legal structure. Mata wrote that using the phrase could lead voters to treat the legally distinct programs as equivalent.
The court rejected one of AFEC’s arguments. The group argued that describing the $150,000 income limit as “adjusted for inflation” could mislead voters because the initiative caps the annual adjustment at the lower of 2% or the change in the gross domestic product price deflator. Mata found the existing wording provided appropriate information and held that omitting the precise formula was not misleading.
In a separate decision, Maricopa County Superior Court Judge Daniel Martin also ordered changes Tuesday to a separate piece of voter information concerning Proposition 212. The judge directed the Arizona Legislative Council to revise its analysis for the publicity pamphlet by Aug. 21.
Martin found the Council’s statement that the initiative committee would have “the power to sue the families and private schools that participate in the program for any violations of the proposition” sufficiently partisan to violate state law. He ordered the Council to strike or revise the language by Aug. 21. The Council’s adopted three-page analysis is governed by a separate law requiring an impartial explanation for the publicity pamphlet.
Mata’s case concerned the shorter ballot title and “yes” and “no” statements prepared by the Secretary of State and approved by the Attorney General.
Proposition 212’s ballot qualification remains the subject of separate litigation over petition circulators and signatures. That case, Clark v. Fontes, is a Goldwater Institute and AFEC-backed challenge to the initiative’s petition circulators and signatures. Maricopa County Superior Court Judge David McDowell is expected to rule on the matter by the end of the week. The amended complaint seeks to prevent the initiative from appearing on the November ballot.
The Democratic nominee for Superintendent of Public Instruction, Teresa Leyba Ruiz, says Arizona’s school choice funds should be reverted back to the public schools.
Ruiz, the former president of Glendale Community College, told “The Mike Broomhead Show” on KTAR that Empowerment Scholarship Account (ESA) funds should be converted to public school funding under her administration of the Arizona Department of Education (ADE).
Ruiz said that she would like to use ESA funds to pay for a literacy coach in every single classroom. Ruiz said if Arizona spent more on its schools, parents would be “fighting” to stay in public schools instead of leaving.
“Right now, in Arizona, there’s over $350 million dollars being stockpiled for future use, for college perhaps. Wouldn’t it be amazing if we took that money and invested it in our schools?” said Ruiz. “If we just invested in our schools — remember this is 50 years of underfunding and not prioritizing our public schools.”
The state spent more than $13.4 billion on public schools in the past fiscal year, an increase of $300 million from the prior fiscal year. Per-pupil spending was more than $12,000, and the average teacher salary was more than $65,600.
Instructional spending declined for the third consecutive year to 52%, the lowest rate since state monitoring began in 2001.
Ruiz also told KTAR on the “AZ Political” podcast that ADE would save money by creating an automated denial system for ESA funds.
“Over $650 million of our taxpayer dollars have flown out the door, unchecked and unchallenged. No oversight on the front end, and that’s something we would put an end to,” said Ruiz. “We’re talking about having a modern, automated system that can quickly process transactions that are appropriate and flag and stop inappropriate transactions.”
According to the current superintendent, Tom Horne, ADE automatically approved expenditures under $2,000 due to lack of staffing. Problematic expenditures under that cap would be subject to review post-approval.
Ruiz said it was for a lack of leadership that Horne had that problem. She claimed that ADE could have shifted resources from one aspect of the department to another to make up for understaffing within the ESA expenditure approval team.
Ruiz served on President Joe Biden’s Advisory Commission on Advancing Educational Equity, Excellence, and Economic Opportunity for Hispanics, specifically the committee for Advancing Higher Education and Hispanic Serving Institutions. The commission was part of the Biden administration’s reestablishment of the Hispanic-Serving Institution programming, which used federal funding to incentivize higher education institutions to intentionally prioritize Hispanic students within admissions.
Ruiz’s commission resulted in the July 2024 creation of the White House Initiative on Advancing Educational Equity, Excellence and Economic Opportunity Through Hispanic-Serving Institutions, which formally prioritized Hispanic-serving institutions through federal recruitment, federal resources, and federal funding.
The commission also successfully convinced the Biden administration to expand federal TRIO programming to illegal alien students classified as Dreamers; TRIO programming has historically provided low-income American citizens with support services such as college campus visits, tutoring, and assistance with college and financial aid applications.
Ruiz also served in the Aspen Institute’s 2018-2019 Presidential Fellows Program; as reported previously, the Aspen Institute played a major role in covering up the Hunter Biden laptop scandal ahead of the 2020 election.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
A Maricopa County Superior Court judge has ruled that Secretary of State Adrian Fontes’ proposed ballot language for Proposition 145 violates Arizona law, blocking Fontes from using the language on the November ballot.
The ruling came in a lawsuit filed by Arizona House Speaker Steve Montenegro (R-LD29) and Senate President Warren Petersen (R-LD14), who challenged the ballot language for the proposed constitutional amendment concerning Empowerment Scholarship Accounts (ESA) for children of military families.
Montenegro and Petersen alleged that Fontes’ proposed language improperly characterized Proposition 145 by informing voters that approving the measure would also nullify Proposition 212, a separate ballot initiative that would make changes to Arizona’s ESA program.
Petersen and Montenegro sought an injunction preventing Fontes from using the proposed descriptive title and “yes/no” language on the official ballot.
Fontes’ proposed language stated that a “yes” vote would amend the Arizona Constitution to “nullify Proposition 212, which imposes spending and income limits” on ESAs.
Maricopa County Superior Court Judge David McDowell ruled that the language did not comply with A.R.S. § 19-125(D), which requires ballot descriptions to explain the effect a measure would have on existing law.
“The reference to Proposition 212 in the title and the ‘yes/no’ language is not a reference to existing law,” McDowell wrote in his ruling.
Because Proposition 212 is a proposed initiative that voters will consider in November, rather than an existing law, McDowell determined that Fontes could not include a reference to its potential nullification in the official ballot language for Proposition 145.
The court therefore enjoined the Secretary of State from using the proposed title and “yes/no” language for Proposition 145 on the official ballot.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Republican leaders of the Arizona legislature are suing Secretary of State Adrian Fontes for allegedly misrepresenting a ballot measure to preserve school choice funding for military families.
Arizona Senate President Warren Petersen (R-LD14), the Republican nominee for attorney general, and House Speaker Steve Montenegro (R-LD29) sued Fontes to prevent the ballot measure language from going to voters.
The 66-page verified complaint accused Fontes of drafting ballot language that intentionally undermines the constitutional amendment, Proposition 145, in order to give a leg up to a competing ballot proposition to end the universality of the Empowerment Scholarship Account (ESA) program.
The language for Prop. 145’s descriptive title reads:
“Would nullify Proposition 212 (below) if voters enact it this election; prohibits the state from sweeping funds from certain state-run scholarship accounts if the student’s parent has provided certain active-duty military service; nullifies all laws that would sweep any such funds, including unrelated provisions of those laws.”
The yes/no language reads:
“A ‘yes” vote shall have the effect of amending the Arizona Constitution to: (1) nullify Proposition 212, which imposes spending and income limits on the Empowerment Scholarship Account (ESA) program, if the people enact that Proposition during this election; (2) prohibit the state from sweeping funds from certain state-run scholarship accounts if the student’s parent has provided certain active-duty military service; and (3) nullify all parts of any law that would sweep any such funds, including unrelated provisions of those laws, applying retroactively to all laws enacted on or after November 1, 2026.
A ‘no’ vote shall have the effect of maintaining current constitutional provisions related to scholarship accounts and allowing Proposition 212 to go into effect if voters enact it this election.”
According to the lawmakers, Fontes’ Prop. 145 ballot language allegedly skimped on and buried details of how the proposed constitutional amendment would preserve military families’ school choice funding. Much of the language, they say, used “partisan, argumentative framing” of Prop. 145 as a direct nullification of Proposition 212, or the Protect Education Act.
Prop. 212 seeks to end the ability for all Arizona students to enter the ESA program by imposing an income cap. It would also require approved curriculum for the release of ESA funds, degrees and background checks for ESA-funded tutors, accreditation or administration of state standardized tests for ESA-funded schools, and revocation of unspent ESA funds for public school usage.
The lawmakers argued that the “impermissibly misleading” ballot language focused more on Prop. 145’s potential future impacts on Prop. 212, in conflict with Arizona law, rather than summarizing the essential change in existing law. They claimed the ballot language is biased, argumentative, and fails to state the measure’s impact on existing law.
Attorney General Kris Mayes signed off on the ballot language.
Montenegro accused Fontes of “play[ing] political games” at the expense of military families.
“Instead of giving voters a fair description, Fontes turned the Secretary of State’s Office into a platform for Democrats’ anti-school-choice talking points,” said Montenegro. “Military families deserve better. I’ll see him in court.”
Adrian Fontes claims to support our veterans, yet he is using official ballot language to play political games with the children of military families. Prop. 145 safeguards their scholarship funds and protects school choice. Instead of giving voters a fair description, Fontes…
