Did Arizona’s ESA Expansion “Blow a Hole” in the Budget? – Dr. Marty Lueken with EdChoice

Dr. Marty Lueken’s report analyzes the fiscal impact of Arizona’s decision to expand its Empowerment Scholarship Account (ESA) program to all K–12 students. It estimates that the expansion cost $324.9 million in the first year and $411.9 million in the second, but a large share of these costs was offset by savings from “switchers” — students who would have attended public schools otherwise. These switchers generated $146.6 million in savings in year one and $293.8 million in year two, reducing the program’s net cost to $178.3 million and $118.0 million, respectively. The analysis finds that these amounts represent only about 1% of total K–12 education funding and a fraction of a percent of total state spending. Overall, Dr. Marty Lueken concludes that Arizona’s universal ESA expansion has had a modest fiscal impact, contradicting claims that it caused a “budget meltdown.”