Choice opponents have been known to throw contradictory arguments out against private choice programs. One moment they will claim that the majority of kids using universal choice programs were already going to private schools. A few moments later they will claim such programs are draining district schools of students and money. The irony of these mutually exclusive claims will often escape the person making them, and you can see hints of both in this New York Times podcast titled Why So Many Parents are Opting Out of Public Schools.
Sigh
Choice opponents make all kinds of claims, but not many can withstand even a modicum of scrutiny. Let’s take for instance a widely repeated fable- that Arizona’s universal ESA program has “busted” the state budget.
If you actually examine state reports like this one for district and charter funding and also this one for ESA funding, you wind up with:
Arizona districts have exclusive access to local funding among other things and are by far the most generously funded K-12 system in the state. Districts, charters and ESAs all use the state’s weighted student funding formula, and ESAs get the lowest average funding despite having a higher percentage of students with disabilities participating than either the district or charter sector.
If you track the percentage of students served by the district, charter and ESA sectors respectively, and the funding used by each as a percentage of the total, you get:
So, there you have it; supposedly the sector educating 6% of Arizona students for 4% of the total K-12 funding is “bankrupting” the state of Arizona. Meanwhile the system, which generated an average of $321,700 for a classroom of 20 ($16,085*20), is “underfunded.”
A group of 20 ESA students receiving the average scholarship amount receive $123,780 less funding, but they are (somehow) “busting the budget.” The fact that a growing number of Arizona students opt for a below $10k ESA rather than an above $16k district education tells us something about how poorly districts utilize their resources. So does the NAEP.
There is a school sector weighing heavily upon Arizona taxpayers, but it is not the ESA program.
Jason Bedrick and I published a piece at the Daily Signal about the Roosevelt Elementary School District in South Phoenix. The Roosevelt district has experienced enrollment loss for decades, and the school board of the district has announced plans to close five schools.
I first learned of Roosevelt Elementary School district some 20 years ago when a Roosevelt student brutally assaulted a co-worker’s child. The staff’s response was far less than satisfactory, but at the time, it was difficult to locate mid-year transfer spots for my co-worker’s children, even after we enlisted the aid of a person who specialized in such situations.
I’m happy to report that in 2025, it is less difficult for desperate parents to execute a mid-year transfer.
Multiple factors explain the decline of Roosevelt’s enrollment, including a nationwide baby bust that began around 2007. Students living in the boundaries of Roosevelt but attending other public schools, both districts and charters, outnumber ESA students approximately 10 to 1. So, Arizona’s open enrollment and charter statutes deserve more credit than the ESA program. An examination of the reviews of Roosevelt Elementary schools left by students, parents and staff on private school navigation websites made my co-worker’s experience from 20 years ago seem to be far from an isolated, unfortunate incident. Here are some examples:
“Please do not take your children here. Almost every child is bullied, and the staff won't do anything. If you truly care about your kid's school experience, don't sign them up.”
“This school makes kids act out by tolerating relentless bullying and cruel treatment by teachers for special needs kids.”
“The kids get bullied, my son got a Black eye the 1st day of school and they told me that because he didn't know who the kid was there was nothing they could do.”
“This school should be shut down.”
“…They don’t take care of bullies; they just ignore the problem and leave the kids (to) fend for themselves; it seems that this is a safe place for bullies not for other kids. I would recommend that you should never enroll your kid here, and if you do, be prepared to endure what seems to be a never ending bully problem, and its not only the teachers that don't do anything about bullies.”
“I would rate it ZERO stars. This school is not SAFE NOR ORGANIZED. Roosevelt school district needs to step up their game or close this school down.”
“Students are constantly fighting or involved in some type of confrontational altercation with each other. Teachers behave more as peers than educators. My grandchild has attended this school for the past five years. I have seen very little improvement. If it were my choice, they would not attend.”
People who work for school districts have organized, and they use the fact that Americans dislike school closures. I would submit, for your consideration, that it is not wicked legislators or dastardly choice supporters who have forced the looming closures of Roosevelt schools. Rather, it has been due to the action of thousands of families who live in the boundaries of the district, who desire safe schools that will equip their children with the knowledge, habits and skills necessary for success. They have chosen to prioritize the long-term interests of their children over the short-term preferences of Roosevelt staff in increasing numbers for decades.
This is a thumbs up for Roosevelt students, whose interests the community has collectively put first, more than a thumbs down for the district schools. Roosevelt district schools will remain the best funded option on a per-pupil basis and might just stage a comeback if they can secure the confidence of families regarding safety and academics. Some of my friends in Arizona’s K-12 reactionary community would prefer that Roosevelt schools receive unconditional immortality. It is difficult to view these folks as engaged in anything other than macabre traffic in other people’s children. Perhaps I judge too harshly; the Phoenix area K-12 industrial lobbying complex is probably large enough to delay the need for difficult decisions in Roosevelt. If they are willing to enroll their own children in Roosevelt schools through open enrollment or otherwise, they might be able to stave off the need for safety and academic improvements.
Opponents of choice in Phoenix have been avid users of choice. One of your humble author’s children graduated from a South Phoenix charter school just a few miles away from Roosevelt. He attended with the children of two gubernatorial nominees who campaigned against choice (including Gov. Katie Hobbs), a child of the president of the Arizona Education Association and a co-founder of Save Our Schools Arizona, among others. Rather than choosing safe and academically performing charter and district schools, this community could instead put their families where their mouths are and lead the renaissance of Roosevelt district schools by enrolling their own children and grandchildren.
While this noble project gets off the ground, we in the Arizona choice community will continue to prioritize the interest of families above those institutions.
In examining the 2024 NAEP results for Arizona, a rather stark picture emerged that Arizona charter and Arizona districts had strongly diverged- Arizona charter schools show academic recovery, whereas Arizona district scores sank, in some cases, to all time lows. This came despite district spending standing not only higher than charters on a per pupil basis and standing at or near record high levels. Arizona charter schools still have an incentive to attract students, whereas during the federal money printing extravaganza districts of the COVID-19 debacle often spent a lot more money even as their enrollments shrank. The NAEP shows the scale of the academic gulf between Arizona charter school students and Arizona district students placed into context with statewide average scores on the 2024 eighth grade math exam:
Drowning districts in cash even as their enrollments shrink may have turned off the positive competitive impact of choice programs, and data published by the Common Sense Institute Arizona shows just how stark this has been. Kamryn Brunner and Glenn Farley of the Common Sense Institute Arizona have been tracking the enrollment and expenditure trends of school districts that have announced school closings since January 2025. I used their data to make Figure 1:
So, the word cloud that pops in my head when looking at this data prominently features “RECKLESS” and “IRRESPONSIBLE” and “UNSUSTAINABLE.” A few months ago the Arizona State Board of Education put the Isaac School District into financial receivership. This enrollment loss was not driven by Arizona’s ESA program, as the state’s open enrollment report shows 2,319 students who reside within the borders of Isaac attend public schools outside of the district (through open enrollment and charter schools) and the ESA quarterly report shows only 82 ESA students reside within the Isaac school district. The number of students who transferred from an Isaac district school to the ESA program will be smaller still, as these students may have previously been attending other districts, charter schools or private schools.
The districts in Figure 2 have announced a total of 13 school closings. Another chart from the Common Sense Institute Arizona shows far more is needed. The Arizona district system has physical capacity to serve almost 1.3 million students, but only 850,000 enrolled.
So how did Arizona districts wind up with a spare 450,000 spaces? There is not a single culprit. A baby bust started in 2008, but this seems not to have informed the decisions of districts. Part of the story is that Arizona families have less demand for district schools. The main culprit however is the usual suspect: politics. The Arizona Center for Investigative Reporting (AZCIR) and KJZZ reported in 2017 on financial relationships between a small group of architects, construction companies and subcontractors and the school districts in Maricopa County. They found that architects, construction firms and subcontractors accounted for nearly all the financial contributions made to Maricopa County districts’ bond and override campaigns from 2013-2016. This is dubious enough in a fast-growing district with clear facility needs, but it has also been happening in districts with shrinking enrollments.
Arizona should collect K-12 capital funding statewide, rather than on a local basis and provide it on an equitable per pupil basis to students. District and charter schools should be free to spend these funds in whatever fashion they feel furthers their educational mission, whether that is building a new school, patching a leaky roof, or paying their teachers. Districts with large amounts of underused space should, however, not receive these funds until such time that they return or offload such space to some sort of productive use.
Arizona is likely not the only state where the positive impact of competitive effects drowned in a sea of COVID cash. With the 2024 election having hinged largely upon an inflationary spiral coinciding with federal money printing, and 10,000 Baby Boomers reaching the age of 65 per day until 2030, the reckless level of spending on K-12 seems all but certain to reverse.
“Sweet are the uses of adversity,
Which, like the toad, ugly and venomous,
Wears yet a precious jewel in his head;
And this our life, exempt from public haunt,
Find tongues in trees, books in the running brooks,
Sermons in stones, and good in everything.”
— William Shakespeare, “As You Like It”
Arizona students led the nation in improvement on NAEP between 2009 and 2015. During this period, Arizona students uniquely made statistically significant improvements on all six NAEP exams (fourth and eighth grade reading, mathematics and science). When your author stumbled upon the Stanford Educational Opportunity Project data, it found that Arizona students had the fastest rate of academic growth between 2008 and 2018. This improvement did not last, but it may be coming back.
Fast forward from these happy times to the 2024 NAEP and the improvement era is looking like a lost golden age. While Arizona’s charter schools show clear signs of academic recovery, Arizona’s school districts are a hot mess. For example, in eighth grade math the average Arizona charter student was comfortably a grade level ahead of the national average for district students, whereas Arizona district students were embarrassingly a grade level behind the average for district students, and approximately two grade levels behind Arizona charter students:
Oooof. What happened?
Well one can never be certain about the relationships between policy and outcomes, but here is your humble author’s working theory. First off, Arizona’s top-down accountability system is a joke. We grade schools A-F, but the formula makes no sense and hands out approximately 120 “A” grades for every “F” grade. Our lawmakers also passed a third grade retention law years ago, but the Arizona State Board of Education has seen to it that effectively no one gets retained. “Accountability” of the testing sort is approximately as firm as a soft-serve ice cream cone that has been sitting out in the Phoenix heat.
It is not as though it used to make sense/have some firmness to it: these policies have sadly never been either firm and/or made much sense, best I can tell. It used to not matter, however, because choice served as the de-facto accountability system.
During the 2009-2015 period, Arizona charter school enrollment surged as high-demand operators were able to access inexpensive property during the Great Recession. Arizona lawmakers expanded the state’s scholarship tax credit programs, and then created the nation’s first ESA program, which started small but steadily grew.
All of this triggered a virtuous cycle during the housing bust aftermath. High demand districts, even fancy ones like Scottsdale Unified, became increasingly open to and aggressive about open enrollment. Open enrollment remains the largest form of choice in Arizona. The financial impact of students transferring between schools and districts mirrors that of other forms of choice, with the state funding following the child. The ready availability of seats in high demand districts spurred a positive feedback loop into the charter school sector whereby high demand charter schools replicated and expanded, but low demand charter schools closed. Not many district schools closed, but many felt the pinch of lowering enrollment. Statewide academic achievement, as noted above, surged; the uses of our Great Recession induced adversity proved to be sweet.
So, what went wrong during the COVID-19 adversity? Basically, the influx of federal COVID relief funding turned off competitive effects, which left us solely reliant on our top-down accountability system, which is ineffectual to say the least.
Why did competitive effects go away? Between the 2019-20 school year and the 2022-23 school year, Arizona school district enrollment dropped by 5%. Arizona school district total revenue, however, increased by 36 percent (see page 3). Arizona school districts received more money to (mis)educate fewer students — not exactly a recipe for competitive pressure. Quite the opposite, actually. Arizona charters meanwhile get less money per pupil, and unlike Arizona districts, show signs of recovery in the NAEP:
Can Arizona regain the lost mojo? Possibly. The federal funny money is washing out of the system, meaning that competitive pressure will return. The advent of the Baby Bust in 2008 means that there are fewer students to go around despite the state’s growing overall population. Arizona has some very talented and competitive people working in school districts, and the competition knob is about to get turned to “11.”
Stay tuned to this channel to see what happens next.
Recently, because this is the sort of thing your friendly neighborhood school choice mad scientist likes to do, I examined the Arizona Superintendent of Public Instruction annual reports. Stick with me; this will be more interesting than you might suspect. So, if you go back to the 1994-95 report (the last year before any charter schools or district open enrollment) and go to page 273 you find that the Arizona school system spent almost $1.3 billion on teacher salaries, on a total spend of $3.5 billion. In other words, 37% of Arizona’s K-12 investment went to teacher salaries.
The latest edition of this same report keeps districts and charter schools separate for these calculations. In 2022-23 (see page I-253) Arizona’s total spend on school districts had increased to $13.2 billion, and the line item for district teacher salaries stood at $3.2 billion. Teacher salaries had dropped from 37% of the total spend to 25%. Dividing the total district teacher salary by the number of teachers and then adjusting for inflation revealed that the average teacher salary remained essentially flat in real terms over the 30 years.
That might seem odd at first. Arizona more than doubled the investment in school districts after accounting for inflation but somehow managed to prioritize every other type of spending except teacher salaries. How does this fit with the notion that school districts have been politically captured by teachers unions?
This puzzle is not overly difficult to solve. “Teachers unions” are actually “district employee unions,” and district employee unions can maximize their dues revenue by maximizing the employment of non-teachers. If for example you can hire two non-teachers for the same cost as hiring a single teacher, you can potentially double your dues revenue. The same reports cited above show that Arizona’s district system somehow soldiered on with one non-teacher employee per 19 students in 1994-95, but that had dropped to one per 15 students in 2022-23.
If in fact Arizona’s school districts spent 37% of their revenue on teacher salaries in 2022-23, it would have pushed the average annual teacher salary over $100,000. This could have been achieved without changing student-teacher ratios and would have left 63% of revenue to spend on everything else.
Other factors are at play as well; districts constructing buildings to the 21st century nowhere, etc. Chubb and Moe instructed us back in 1990 that the central problem in K-12 education is politics, a lesson that we seem prone to forget. The K-12 system isn’t just broken. Rather it is broken on purpose, and teachers have been hugely shortchanged in the process. Fortunately, the development of a solution is underway, and choice is key:
In 2005, the Alaskan Congressional delegation created a national controversy when they attempted to secure $398,000,000 to build a bridge to an island with 50 inhabitants. Known as “the Bridge to Nowhere” this effort lingered on until Congress finally halted it in 2011. The islanders continued to make do with a ferry. Arizona school districts, however, already full of vacant space, are determined to make Alaskan Congressional pork look reasonable by comparison in building schools to nowhere.
This chart from a revealing study by the Common Sense Institute shows a central planning/crony capitalism dynamic in Arizona district school construction. The red line (projected statewide enrollment) departed from reality beginning with the Great Recession, whereupon it departs dramatically from the blue line (actual statewide enrollment). A giant nationwide real-estate bust that prevents people from selling their houses and moving to Arizona was not great for enrollment growth. The Baby Bust 2008 kicked off depressing enrollment growth once the real-estate crisis faded.
Despite the statewide district enrollment decline that started that year, Arizona school districts added approximately 20 million square feet of new district school space. Note that the blue line in the Common Sense Institute chart above represents total K-12 enrollment, rather than district enrollment. What has been happening with district enrollment? Glad you asked:
Between a Baby Bust that shows no sign of relenting, continued charter school enrollment growth and new kid on the block Universal ESA, you might think that Arizona school districts would buckle down and focus on putting more resources into the classroom. You would however be entirely mistaken. Instead, districts are asking voters for billions of dollars in (you guessed it!) new school construction! More than $4.3 billion, to be precise.
The district I live in, Paradise Valley Unified School District, is going out for a half billion dollars in total bond debt. In 2013, the Arizona auditor general noted that the district had a physical plant space for 42,000 students, but only 32,000 students enrolled. Therefore, the auditor general recommended leasing vacant space:
Paradise Valley Unified was down to 28,707 students in 2022. In the summer of 2023, the district announced the possibility of closing schools in response to enrollment decline. In the fall it will hold a bond election to take on an extra $558,716,667 in debt for the following purposes:
The solution to a district with space for 42,000 students but fewer than 29,000 students would be to retire aging facilities rather than replace or repair them. The district’s enrollment has declined by 18% since the year 2000, making the notion that the district needs to “accommodate growth” odd.
Right about now you might be wondering, “what’s going on here?” The Arizona Center for Investigative Reporting provided an important clue in 2017 when it found that district bond campaigns are often 100% financed by school construction firms. Like the construction of ghost cities in China, politics and cronyism rather than necessity drive these bonds.
When the Baby Boomers moved on to college and careers and were replaced by Baby Busters, many schools closed. Today, we see schools remaining either under-used or vacant. Arizona policymakers should require all future bond elections to be held on the uniform election date in even-numbered years and should consider creating a base-closing commission to get zombie schools out of district backlogs and into some sort of productive use.
Editor’s note: Here is the introduction to a new white paper authored by Matthew Ladner, director of the Arizona Center for Student Opportunity, and reimaginED executive editor. You can read the full paper here.
Arizona has long ranked fairly low in rankings of per pupil funding. Demographic and other factors beyond the reach of a normal budgeting process influence per-pupil funding levels, including age and family size.
To illustrate, as a retirement destination with 7.4 million residents, Arizona boasts 1.4 million aged 65 or older, and older people vote at higher rates than people aged for school aged children. Economists have established an empirical relationship between the number of elderly voters and school spending – basically the more, the less.[i] Arizona also ranks eighth in average household size among states.[ii]
The impact of larger families requires states to stretch funding over a larger number of students. It is no coincidence for instance that Utah ranks first in average household size and last in per pupil K-12 funding. Rapid rates of enrollment growth also have a depressing effect on per pupil funding. Between 2000 and 2015, all states with at least a 30% increase in per pupil funding experienced less than a 10% increase in enrollment.
A majority of states in that category experienced an absolute decline in K-12 enrollment. Those states spent more per pupil in part because they kept spending the same amount of money on fewer students. In Arizona, K-12 enrollment increased by more than 25%.[iii]
Societal wealth and budgetary priorities across policy domains and tax efforts strongly impact K-12 funding. Real per capita income increased by 14.9% between 2015 and 2020, but the state still ranks among the lowest states for per-capita income.[iv] Advocates of increased spending in health care, higher education, public safety and transportation directly contend with K-12 education for increased state investment. Demand always exceeds the supply of public dollars.
The faults that lie in our stars thus include relatively low-income state with large average family sizes, many elderly residents, and relatively rapid K-12 student population growth. Despite all of this, Arizona spends more inflation adjusted dollars per pupil today than it did in the past-a 16.5% increase per pupil between 1999 and 2018 in current expenditures per pupil.[v]
Arizona could choose to spend more on K-12 education, either by spending less on other priorities or taxing more heavily. These decisions are made democratically and within a pluralistic competition for resources.
Arizona’s failure to equitably distribute K-12 funding however is a fault that lies within ourselves. As will be outlined below, local funding factors have driven Arizona to distribute K-12 funding inequitably. Worse still policymakers actually equalized K-12 funding in an admirable fashion in decades past, only to subsequently undo the progress.
Funding inequality today is even greater than in 1980. Arizona may be vulnerable to legal challenge, and the history of court challenges to school funding systems far from unambiguously positive even when “successful.”
The following pages will lay out suggestions for modernizing a funding formula for the needs of the 21st century.
REFERENCES
[i] M. Alejandra and Stefan C. Wolter. 2007. “Are the Elderly a Threat to Educational Expenditures?” Publication of the IFO Institute, CESIFO working paper No. 2089, available on the internet at https://www.cesifo.org/DocDL/cesifo1_wp2089.pdf
[ii] Statistica, 2019. “Average size of households in the United States in 2019, by state.” Publication of Statistica, available on the internet at https://www.statista.com/statistics/242265/average-size-of-us-households-by-state/
[iii] Petrilli, Michael J. 2019. “The Baby Bust Goes to School.” Article appearing in the Summer 2019 edition of Education Next, available on the internet at https://www.educationnext.org/baby-bust-goes-to-school-falling-birthrates-crisis-opportunity/
[iv] DePietro, Andrew. 2021. “United States Per Capita Income by State, 2021.” Article in the December 28, 2021 edition of Forbes, available on the internet at https://www.forbes.com/sites/andrewdepietro/2021/12/28/us-per-capita-income-by-state-in-2021/?sh=68d9eb2e37be.
[v] U.S. Department of Education, National Center for Education Statistics, Statistics of State School Systems, 1969-70; Revenues and Expenditures for Public Elementary and Secondary Education, 1979-80; and Common Core of Data (CCD), “National Public Education Financial Survey,” 1989-90 through 2018-19. Available on the internet at https://nces.ed.gov/programs/digest/d21/tables/dt21_236.65.asp
