As Arizona’s largest public school district, Mesa Unified School District is a critical case study for the future of K-12 funding, particularly in a state that champions competition and choice for its families. Despite headlines boasting of population growth across the state, the nationwide decline in childbirths and cost-of-living increases will weigh heavily on district enrollment and balance sheets for years to come.
While solving these policy issues is admittedly outside the scope of superintendents and governing boards, how districts adjust to these changes remains within their control. In the case of Mesa USD, the district faces an existential crisis in enrollment that will almost certainly require consolidation and closure among its 78 schools over the next 10-20 years. Furthermore, the district’s statewide assessment performance leaves much to be desired, with just 38% and 31% of Mesa USD students achieving proficiency in English Language Arts and Math, respectively.
Next month, Mesa taxpayers will have an opportunity to make their voices heard and rein in the district’s spendthrift ways by rejecting a $500 million bond and an override continuation that, if passed, would allow the already overstretched district to exceed its revenue control limit by 15% for another seven years.
When voters last approved a bond for Mesa USD in 2018, they did so with a margin of <1% and at a cost of $300 million to taxpayers. A year later, the district was beset with allegations of financial impropriety and steep administrative costs, leading to the resignation of the district’s superintendent. The poor transparency on the part of the school board in communicating the issue to the public further underscores the lack of taxpayer accountability. Furthermore, over the last three years, Mesa USD received over $245 million in federal pandemic relief funds, with hundreds of millions still unspent.
Nevertheless, Mesa USD’s pitch to taxpayers remains unchanged, and approval of the bond and continuation of the override will result in little more than throwing away hundreds of millions of dollars in costly capital projects for underutilized campuses and unsustainable personnel costs.
Demography Is Destiny
In the early 2000s, Mesa boasted a population of over 400,000 residents. During the same period, Mesa USD reached its peak enrollment at over 87,000 students during the 2002-2003 school year. Today, the city is home to nearly 510,000 people, yet the city’s population growth over the last 20 years never trickled down to Mesa USD’s enrollment. Today, the district serves fewer students than it did in 1990 when Mesa had just 290,000 residents.
An additional cause for alarm comes from the pronounced decline in Mesa USD’s Kindergarten-6th grade enrollment. For large, comprehensive school districts like Mesa, enrollment in feeder schools is an important signal of a district’s future headcount. Over the last 20 years, 16 of Mesa USD’s elementary schools have lost over 40% of their students. In the same period, the district’s junior high schools saw an average decline of 50% of their enrollment.
Source: Mesa Public Schools – Demographics Report 2021-2022
As another signal of its unpopularity, Mesa USD is one of the state’s largest sources of ESA students, which has its most substantial adoption rates in the elementary grade levels. Given the expansion of ESAs and charter schools, Mesa USD will continue competing for a depleting student pool. In turn, a decline in enrollment necessitates a reduction in operational expenses, which Mesa USD has rebuffed in favor of taxpayer-funded bailouts.
Around 77% of school districts in Maricopa County have one or more overrides in effect. While East Valley voters have typically displayed enthusiasm for K-12 bonds and overrides in the past, the powerful impact of free market principles via ESAs makes the decision different today. With nearly 70,000 Arizona families using ESAs today, enthusiasm for the program has made it larger than any school district in the state, with the additional benefit of not requiring bonds or overrides.
To realize the substantial cost savings from ESAs, a corresponding change is required from public schools in rightsizing their districts by adjusting their property and personnel costs. In preparing for the inevitable, Mesa USD must take steps now to address under-capacity and explore the sale of its real estate before requesting additional funds from taxpayers. In rejecting this bond and override, Mesa voters sidestep a lousy deal and send a clear message about taxpayer accountability.
Arman Sidhu is a lifelong Arizona resident and previously worked in K-12 education as a principal and teacher. He currently leads a nonprofit microschool.
For the Democrats and their sycophant media allies, the problem is always too much parental choice in education and letting taxpayers keep more of their hard-earned money. Yet this narrative couldn’t be further from the truth. A closer look at Arizona’s budget and the projected budget deficit reveals that we have a spending problem, not a revenue problem…
Projected Budget Shortfall Is a Spending Problem
Just 5 years ago, the legislature enacted the FY 2019 budget that included $10.1 billion in on-going spending, plus $500M in “one-time” expenditures ($10.7 billion total). By last year, that number had exploded to nearly $15 Billion in ongoing spending, a 50% growth in ongoing spending in 5 years! The most recent budget negotiated with Democrat Katie Hobbs earlier this year kept ongoing spending at a lower trajectory but included “one-time” outlays that brought the total budget cost to $17.8B…
On Wednesday, October 11, Arizonans learned the budget Katie Hobbs signed into law will possibly have a $400 million shortfall. This means the state won’t have enough money to fund the budget because it’s too big and is spending too much money.
The left wants to blame the budget shortfall on the implementation of former Governor Ducey’s state income flat tax a couple years ago. They also demonize the families participating in the state school choice ESA program. However, if it weren’t for Hobbs’ spending increase of $2 billion and vetoing a $2 billion smaller budget, the state would still have an outlook with a budget surplus.
Let’s review the short history.
In June of 2022, Arizona Governor Ducey signed into law the Fiscal Year 2023 Arizona Budget. The Radical Left and then-Secretary of State Katie Hobbs praised that budget for being bipartisan.
Moving ahead to the most recent 2023 legislative session, Arizona Senate President Warren Petersen and Speaker of the House Ben Toma wanted the new legislature to prioritize their most important responsibility — the state budget. Accordingly, in February, the state legislature passed a continuation of the same $15.8 billion budget from 2022.
Hobbs vetoed it. The budget Hobbs vetoed is the same as the one she applauded after Ducey signed it into law. This year, Hobbs called the budget partisan and extreme. The budget Hobbs decided was good enough to sign into law was $17.8 billion, exactly $2 billion larger than the budget she vetoed.
Hobbs insisted on a budget that is $2 billion larger even while many economists predicted Arizona and the nation are at risk for an economic slowdown due to rising interest rates. Forbes reported, “At the end of 2022, the National Association of Realtors predicted a 15.8% drop in combined sales and prices for the Phoenix-Mesa-Scottsdale [housing] market in 2023.”
The Federal Reserve, the nation’s central bank, currently shows the median home price in the United States is collapsing faster than any other point in recorded history.
If a recession occurs, Arizona will see less tax revenue. This would also have a negative impact on the budget’s revenue because people are spending less money; therefore, the state is collecting less in taxes.
While the Radical Left wants to blame the budgetary shortfall on the flat tax that benefits everyone, one thing is clear. The state of Arizona is spending too much money, and Hobbs’ extra $2 billion budget is destroying Arizona. It is her fault.
Jeff Caldwell currently helps with operations at EZAZ.org. He is also a Precinct Captain, State Committeeman, and Precinct Committeeman in Legislative District 2. Jeff is a huge baseball fan who enjoys camping and exploring new, tasty restaurants! You can follow him on X here.
Arizona’s Republican legislative leaders continue to come to the unwavering aid of the state’s Empowerment Scholarship Account (ESA) Program.
After the ESA program sustained another political attack from Democrat Governor Katie Hobbs, House Speaker Ben Toma released a statement in support of the landmark school choice expansion for the state. Toma said, “Governor Hobbs continues to blast the ESA program as unsustainable and exceeding estimates. Neither are true. We remind the Governor that she leads the entire state of Arizona, and if she seeks changes to the ESA program, she ought to propose serious policies, not tweet vague threats. The State Legislature has yet to see any policy proposals from her office. Arizona will continue to responsibly fund students, not systems.”
Arizona’s K-12 Budget Is Right on Track: "Governor Hobbs continues to blast the ESA program as unsustainable and exceeding estimates. Neither are true," said Speaker Ben Toma. "We remind the Governor that she… pic.twitter.com/eNlnXwz2db
According to the Speaker’s press release, “the Department of Education reported on October 4 that the budget is currently on pace to have a year-end surplus of roughly $77 million,” adding that “the budget estimate of 68,000 total users (in the ESA program) is within 1% of the current program enrollment.”
The Speaker’s defense of ESAs came soon after Hobbs unleashed another attack against it, claiming that the program “threatens to decimate our state’s budget.” In a post on the platform “X,” Governor Hobbs stated, “The school voucher program is unaccountable and unsustainable. It does not save taxpayers money, and it does not provide a better education for Arizona students…I call on Superintendent Horne, Speaker Toma, and President Petersen to join with bipartisan leaders to pass accountability and transparency measures, and bring an end to this wasteful, runaway spending.”
The school voucher program threatens to decimate our state’s budget.
I call on Superintendent Horne, Speaker Toma, and President Petersen to join with bipartisan leaders to bring accountability to the school voucher program and end the wasteful, runaway spending. pic.twitter.com/6pvsovlWBO
Horne and Petersen also took time to respond to the governor’s assertions, pushing back against her allegations and supporting the integrity of the program. Horne said, “The Governor’s calculation is in error. She is counting the $7,200 paid for each ESA student without offsetting the $13,000 paid per student that would otherwise be spent for that student to attend a public school. The overall numbers bear this out as the expenditures for all public-school spending, including the ESA program are $72 million below budget.”
Petersen added, “Arizona families want choices for their children’s education. ESAs are one of many choices the Legislature is prioritizing. The fact is, we budgeted for the 68,000 kids currently enrolled and have responsibly planned for incremental spending increases for this program in the years to come, as we do with a variety of other programs in our overall budget. We’re always open to improving our state’s programs, but for the sake of Arizona families who want to choose the best educational settings to meet their children’s needs, ESAs are here to stay.”
Since failing to address ESA changes in the state’s budget, which was passed earlier this year, Governor Hobbs has increased her political volleys against the program, joining allies who were enraged at her perceived capitulation to Republican lawmakers. As a new legislative session nears, Hobbs and her staff will likely be more focused on exacting some concessions when the next round of budget negotiations resume in 2024. Ultimately, Arizona voters will have a significant role in determining the direction of the state’s ESA program, whether by changes to the political party make-up of the legislature or through a yet-to-be-filed ballot initiative.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Amid the passage of historic school choice legislation in Arizona, the educational opportunities available to students and families today are unparalleled with the state’s universal ESA program. In addition to providing Arizona families with voice, choice, and agency in their child’s education, the ESA program has the potential to save Arizona taxpayers considerable funds from future school district bond and override measures.
However, to realize these savings, a long overdue conversation about rightsizing Arizona’s public schools is necessary. Despite significant population growth within Arizona, the enrollment forecasts for most school districts anticipate a period of long-term decline due to lower childbirths, affordability, and alternative options. This demonstrates a pressing need to review the budgets and assets of public school districts and align them with future enrollment projections.
Given the significant competition from the rise in homeschooling, as well as charter and private schools, public schools are no longer the only game in town. As a result, greater scrutiny from local taxpayers is needed in holding school districts fiscally accountable by questioning their need for additional funds through bonds and overrides.
What Are School Bonds & Overrides?
School bonds are loans that school districts sell to investors, who are repaid through the district’s future property taxes. These bond funds have specific limitations on their use and cannot be used to increase staff salaries. In most instances, these funds are leveraged for infrastructure projects involving the construction of new facilities or upgrades to existing ones. In contrast, overrides go directly to school districts and can be used for staff salaries and various programs outlined by the district requesting the override.
This November, a total of 23 school districts in Maricopa County will have bond and/or override measures on the ballot. Among these 23 districts, at least 4—Kyrene Elementary School District, Mesa Unified School District, Gilbert Unified School District, Scottsdale Unified School District—are in dire need of rightsizing before requesting additional funds from taxpayers based on their pronounced decline in enrollment.
In particular, Mesa USD, the state’s largest school district, enrolls fewer students today than it did in the fall of 1990. Yet, the district’s real estate portfolio somehow contains 78 schools, in addition to various non-instructional facilities and offices throughout the city. Mesa USD, as well as surrounding districts in similar positions, need to do right by taxpayers in exploring the sale of underutilized real estate before passing the buck to taxpayers.
As seen in the table below, only Gilbert USD has shown an increase in enrollment since the fall of 2000, and none of the districts can report an increase in enrollment in the last 10 years. Given the growth in ESA adoption and charter school enrollment, the pragmatic move is to respond to these declines now by rightsizing these districts, pursuing the sale of district assets, and removing administrative bloat.
Among the clearest signs of waste and inefficiency can be found in the amount of unspent federal pandemic relief funds provided to schools around the country. In the case of the 4 school districts requesting additional funds from taxpayers, they collectively still have access to tens of millions in unspent, flexible funds that are set to expire in a year.
What this experiment in “helicopter money” confirms is that the problem ailing local school districts is not a lack of funds, but rather their inability to direct funds efficiently. In the absence of a public monopoly, this decline in public school enrollment will continue to eat into taxpayers’ wallets with the additional forces of demographic shifts, affordability, and competition from the growing number of viable and efficient alternatives in the form of charter schools, private schools, microschools, and homeschool co-ops.
In adjusting to this historic era of school choice, the need for fiscal accountability remains essential on behalf of public school districts that have been reluctant to change and control their costs. To avoid perpetually funding buildings and bureaucracy, local taxpayers and residents must ensure their voices are heard.
Arman Sidhu is a lifelong Arizona resident and previously worked in K-12 education as a principal and teacher. He currently leads a nonprofit microschool.
