Arizona governor proposes overhaul of school voucher program

By JACQUES BILLEAUD Associated Press

PHOENIX (AP) — Democratic Arizona Gov. Katie Hobbs has proposed requiring students to attend public school for 100 days before becoming eligible for the vouchers in a move designed to rein the voucher program’s skyrocketing costs and reduce the number of participants.

The voucher changes sought by Hobbs are a key feature of the budget proposals that her office unveiled Friday as the state faces a growing deficit.

The Legislature’s budget analysts provided a new forecast on state revenues Friday, saying the shortfall has grown from $400 million to $835 million this year and from $450 million to $879 million next year.

The state faces plummeting revenues from a massive tax massive tax cut that took full effect last year and growing costs from the school voucher program expansion.

In addition to proposing restrictions on the voucher program, the governor wants to confront the steep deficit by having state agencies return unspent money, delaying state construction projects and cutting more than $400 million in transportation projects that had been previously approved by the Legislature.

She also has proposed doing away next year with school tuition organizations that funnel tax credits to students to pay private school tuition.

The governor’s office estimates this could lead to $185 million in savings for the state in 2026.

Some proposals by Hobbs, particularly her plan to rein in the voucher program and repeal the school tuition organizations, are considered non-starters among the Republican-majority Legislature.

Still, Hobbs spokesperson Christian Slater defended the proposals as necessary for bringing accountability to taxpayers.

“They want to see their money used wisely,” Slater said. “So we think that this is something that we’re going to put forward, and we’re really hoping that this is something we can get passed” by the Legislature.

Sen. John Kavanagh, a Republican who chairs the Senate Appropriations Committee, said the ideas floated by the governor are either a negotiating strategy or “red meat to her base before she gets down to serious discussions at the Legislature.”

“If it’s a starting point, it’s too extreme — and it’s alienating a lot of Republicans,” Kavanagh said.

The voucher program lets parents use public money for private-school tuition and other education costs. It started in 2011 as a small program for disabled children but was expanded repeatedly over the next decade until it became available to all students in 2022.

More than 73,000 students currently participate in the program. Critics say the expansion is a drain on the state’s coffers and is subsidizing private school tuition, while backers say the expansion lets parents choose the best school for their children.

Hobbs’ office says the program would cost $822 million and have an additional 9,400 students next year if the program isn’t overhauled.

The governor has said the vouchers shouldn’t be used to pay for ski resort passes, pianos and other items. Her office says her proposals would reduce the costs of the vouchers by $244 million next year.

The governor is proposing that students who receive the vouchers, beginning next year, would have to first attend a public school for 100 days to remain eligible for the program.

Hobbs’ office doesn’t expect private school students who receive the voucher would go into the public school system and thus would end their vouchers.

Hobbs vowed to bring accountability when she began her term a year ago as the first Democratic governor since 2009. Despite her criticism, the budget proposals negotiated by Hobbs last year didn’t include any caps on the expansion, leading Democratic lawmakers to express dissatisfaction with the lack of action.

Kavanagh said Republican lawmakers will not agree to Hobbs’ proposed 100-day requirement. “Hopefully, we will begin serious negotiations behind the scene and broker something that both sides can agree to,” he said.

House Democratic Leader Lupe Contreras responded to the Governor's budget plan.

"We applaud the Governor for producing a budget that protects the priorities that will drive our state forward and that our caucus has consistently championed for our communities – public education, affordable housing, childcare for working families and vital services for the most vulnerable Arizonans. She is listening and leading. However, decades of irresponsible Republican tax policies and expansion of ESA vouchers with no oversight have created a revenue shortfall that appears to be ballooning. Even in a strong and growing economy, our job gets tougher every day. We will have to work very hard and together to fulfill our obligations to help our most vulnerable populations, to fund our public-school students and teachers, to ensure public safety, to help our overburdened border communities and to secure our incarcerated populations. We have our starting point and it's time for the adults in the room to get to work on some tough decisions." 

House Democratic Leader Lupe Contreras

President of the Arizona Education Association, Marisol Garcia, also sent out a statement on the proposal.

“In 2021, former Governor Doug Ducey and his supporters in the legislature passed a massive tax cut for the rich. In 2022, they passed an ESA voucher program with zero financial accountability and no spending limitations. 

Today, as a direct result of those decisions, our state has an enormous budget shortfall, as much as $1.7 billion. In face of this shortfall, our message is simple. We cannot allow our legislature to prioritize the out-of-control ESA voucher program over K-12 public schools and other vital public services. 

Arizona educators are committed to helping all of our students succeed, no matter who they are or where they live. We work long hours every week to live up to that commitment. But there is only so much we can do when our A/C systems haven’t been repaired in years, our colleagues keep leaving for better-paying jobs in other states, and our kids show up to school late because our district can’t hire enough bus drivers. Our K-12 public schools are underfunded as it is, and funding cuts are simply not acceptable. 

We’re grateful to Governor Hobbs for laying out a budget framework that prevents cuts to K-12 public education, avoids major cuts to other critical programs, and reins in the cost of the ESA voucher program. Now it’s up to legislators of both parties to follow her lead and craft a budget that actually meets the needs of Arizonans – not just the very rich. “

President of the Arizona Education Association, Marisol Garcia