Arizona’s cautionary tale that Idaho lawmakers can still avoid repeating

Idaho’s legislators need not step blindly into the financial quicksand of taxpayer-supported vouchers during this year’s session. They just need to look toward Arizona to see how using taxpayer money to support private and religious schools will hurt Idaho’s public schools. And how vouchers will eventually destroy our state’s historically conservative fiscal policies.

Unfortunately, for the taxpayers and school children of Arizona it is too late. That state is heading into a fiscal twilight zone thanks to the misguided decision two years ago to expand its Empowerment Savings Account (ESA) to every student and the skyrocketing expense of its longtime voucher tax-credit program.

The immediate concern in Idaho comes from legislation proposed by Rep. Wendy Horman and Sen. Lori De Hartog who last week announced they would sponsor a voucher tax-credit bill that would provide $5,000 for each student to attend a private or religious school and cost the state $50 million the first year and even more in future years. Other legislators are reportedly working on a voucher Education Savings Account (ESA) bill like the one in Arizona.

At first glance, the Horman-Den Hartog bill seems reasonable just as Arizona’s first voucher bill did in 2011 when the cost was only $1 million. But over the past dozen years the Arizona voucher program steadily expanded thanks to pressure from an army of lobbyists. By 2022, 12,000 students received vouchers at a cost of $189 million.

Meanwhile, Arizona created a voucher tax-credit program in 1998 to provide money to private and religious schools. That program, which is like the one Horman and Den Hartog are proposing, now costs Arizona $272 million per year. Since its adoption, the tax credit has cost Arizona $2.6 billion.

Two years ago, the voucher lobbyists struck gold when Arizona lawmakers passed the nation’s first universal education savings account law, which made taxpayer money available to every student regardless of family income. Now 73,000 students have signed up for a taxpayer-supported voucher subsidy and the state’s legislative budget staff projects that by next school year 100,000 students will apply for the tuition subsidy. (Source: Capitol Media Services, July 1, 2023)

When the Arizona legislature passed the universal voucher law, proponents said it would cost $33.4 million in the first year and $65 million in the second year. Those numbers were a pipedream. The cost of the universal program skyrocketed to $550 million the first year and more than $800 million this school year.

In a memo last spring to the legislative budget office, Christine Accurso, who then ran the Empowerment Scholarship Program, said that by the end of the next school year the program could have 100,000 students and cost $900 million. She said that would amount to one dollar out of every eight now earmarked for public education in Arizona, which already has the third lowest per pupil funding in the country. (Source: Capitol Media Services)

Arizona’s vouchers don’t serve the students they were supposed to help

In signing Arizona’s new universal voucher law, then-Governor Doug Ducey said universal vouchers would benefit students who currently attend public schools and switch to private and religious schools. “Our kids will no longer be locked in underperforming schools,” Ducey proclaimed.

But Ducey’s promise now rings hollow. Research by the Grand Canyon Institute shows that most of the families taking the taxpayer subsidies live in high-income zip codes and mainly in suburban areas. Few of the students live in rural communities or low-income neighborhoods. (Source: Grand Canyon Institute report, November 6, 2022)

In a recent report, Save Our Schools Arizona, a grassroots anti-voucher group, estimates that up to 80 percent of the students receiving the voucher subsidy already attend private and religious schools or are home schooled.

Under the leadership of Arizona’s new superintendent of schools, Tom Horne, the Department of Education quit reporting how many students accepting the voucher subsidy never attended public schools. But earlier last year Horne’s staff acknowledged that three out of every four students who applied for the taxpayer subsidy already attend private or religious schools, or were homeschooled, according to a report by Capitol Media Services.

News that most students receiving the subsidy never attended public school shouldn’t surprise Arizona lawmakers. They were warned during the debate on the bill that most of the subsidies would go to families who had already sent their kids to private and religious schools. That has also been the trend in nearly every state with vouchers.

“We expect that most of the growth in the universal ESA participation will likely occur among private and home school students,” a report by Arizona’s Joint Legislative Budget Committee said. “They have already decided to opt out of the public school system and would be likely to receive financial gain from ESA program participation.”

Vouchers help private, religious schools increase revenue

There is also evidence that some Arizona private and religious schools are taking advantage of the taxpayer subsidy to increase their bottom line. An analysis by The Hechinger Report of 55 private schools which posted their tuition rates online showed that all had raised tuition since passage of the universal law. (Source: The Hechinger Report, November 27, 2023)

The Hechinger Report said some of the schools made increases in line with the Phoenix area’s 6% inflation rate, but nearly half of them had increased their tuition by 10% or more. Five schools raised their tuition by 20% – more than three times the local inflation rate. Hechinger concluded such an increase could put tuition out of reach for the moderate- and low-income families Ducey and lawmakers claimed they wanted to help.

For example, Hechinger wrote, the tuition at one Montessori school increased by $4,200 to $15,000. A Christian school raised tuition by 25% for most grades. A Catholic elementary school raised its tuition by $1,800 for non-Catholic students, increasing the total cost to $14,000. Meanwhile, the average state voucher is about $8,000, leaving a sizeable gap between the voucher subsidy and private school tuition.

“That (increasing tuition) risks pricing the students that lawmakers said they intended to serve out of private schools, in some cases limiting those options to wealthier families and those who already attended private institutions,” Hechinger wrote.

Beth Lewis, director of Save Our Schools Arizona, said it makes sense that they would raise tuition. “If a family was already able to pay $11,000, what’s stopping the school from increasing tuition by the average (taxpayer subsidy) ESA?” Lewis told Hechinger.

Yet Arizona private and religious schools aren’t the only ones taking advantage of the taxpayer subsidy to raise tuition. In Florida, where the Legislature passed a universal voucher bill in 2023, St. Paul’s Catholic School in St. Petersburg raised its tuition last fall to take advantage of the new voucher law, according to the Tampa Bay Times. (Source: Tampa Bay Times, May 30, 2023)

“We decided that we need to take maximum advantage of this dramatically expanded funding source,” Monsignor Robert Gibbons, St. Paul’s pastor, announced during a YouTube video circulated to families last year. “Otherwise, we would be negligent,” he said.

Gibbons said the school would raise tuition for parish members from $6,000 per student to $10,000. Non-parish members would pay $12,000 per student instead of $7,000. Meanwhile, families who signed up for the taxpayer supported voucher would receive $8,000 from the State of Florida.

In other words, when all the bills are accounted for, St. Paul families would be paying less in tuition, even as tuition increased, and the school would bring in more money thanks to the taxpayers of Florida. Based on the number of students attending the school, the Tampa Bay Times calculated that the school would bring in about $1 million more per year in tuition thanks to the voucher subsidy.

But Gibbons made it clear to parish families that they all needed to sign up for the taxpayer-supported voucher. “If we don’t take full advantage of this funding source, we will be leaving money on the table and it will revert back to the state,” he said in the video. The increased revenue would be used to raise teacher salaries and make capital improvements at the school, he explained.

Meanwhile, Florida’s newly approved universal Empowering Scholarship was estimated to cost between the Florida House’s $209.6 million estimate and the Florida Senate’s $2.2 billion estimate. But the Education Law Center and Florida Policy Institute, which oppose vouchers, estimates that the cost of the universal program could eventually reach $4 billion. (Source: The Washington Post, June 5, 2023)

Of the 122,895 students who had signed up for the universal Florida voucher program, 69% were already enrolled in private or religious schools and only 13% were transfers from the public school system. The rest were first-time kindergarten students, according to a September report from Step-up for Students, which administers the Sunshine State’s voucher program. (Source: NBC6 News, September 15, 2023)

But that isn’t the only cost for Florida’s so-called “school choice” policy. The Florida Tax Credit Scholarship, which is like what Horman and Den Hartog want to start in Idaho, has risen 62% since it was created in 2001. The program now costs Florida more than $1 billion per year. (Source: The Hechinger Report, April 24, 2023, and the Florida Department of Education, March 2023)

Vouchers help free market schools survive with taxpayer subsidies

In America, private and religious schools have historically operated independently in the free marketplace and without government funding and control. Like other free market enterprises, if these schools served students, they survived. If they didn’t, they would close or were forced to merge with other private or religious schools.

But private and religious schools are not so comfortable depending upon the free market since the first voucher bill passed in Wisconsin 34 years ago. They still don’t want the government to intrude or hold them accountable, but increasingly they are looking toward taxpayer subsidies to survive and thrive.

This can be especially problematic in states like Idaho whose Constitution prohibits the state from supporting religious schools with taxpayers’ money. But voucher advocates have gotten around these constitutional requirements by giving money to private schools, knowing that the U.S. Supreme Court ruled that if a state gives money to a private school, it must also fund religious schools. (See Article IX, Section 5 of the Idaho Constitution, also see Espinoza v. Montana Department of Revenue and U.S. Supreme Court’s 5-4 decision, June 30, 2020. Chief Justice John Roberts wrote in the majority opinion that the Court was not endorsing vouchers)

In other words, voucher advocates are repealing constitutional safeguards against giving money to religious schools by statute, instead of going to the voters to amend the state constitutions in states like Idaho, Arizona, and others which have a so-called Blaine Amendment.

Religiously affiliated schools take in most of the voucher money

These developments are important because a 2017 study by the National Bureau of Economic Research indicates why the current trend to fund religiously affiliated schools is significant and historic. The Bureau’s study found that religiously affiliated schools receive 85 percent of the billions of dollars spent annually on taxpayer supported vouchers in the U.S. The Bureau also found that 80 percent of all private school students in the U.S. attend religious schools. (Source: National Bureau of Economic Research, February 2017, “Beyond the Classroom: The Impact of School Vouchers on Church Finances)

Moreover, the Bureau found that taxpayer voucher subsidies have a significant positive fiscal impact on these religious schools. “We find that expansion in voucher policy is, unsurprisingly, associated with increases in voucher revenues for parishes with schools. We also find that voucher expansion prevents parish closures and mergers.”

The Bureau’s research showed that taxpayer voucher subsidies helped the overall bottom line for churches as attendance and collections have faced a large decline in the U.S. “The idea that public funding would provide an important, even dominant, source of support to congregations would have been unthinkable a few years ago. But this possibility has quickly become reality. In our data, the typical parish accepting vouchers gets more revenue from government-funded vouchers (nearly a million dollars annually) than from offertory donations,” the Bureau’s study said.

In other words, the billions of dollars spent on taxpayer voucher subsidies across the country in states like Arizona and Florida are mainly helping church schools and their religious organizations survive during this tectonic shift in American society and religion. Research in Wisconsin, the first state to adopt a voucher program, also shows that religious schools receive most of the Badger State’s tuition subsidies.

Reacting to the Hechinger Report that showed many Arizona private and religious schools were raising tuition thanks to the voucher program, Dan Hungerman, an economics professor at the University of Notre Dame, pointed out that Hechinger’s tuition study lacked the rigor of typical academic research. But he admitted that his own research found the same thing the National Bureau of Economic Research found — voucher programs are improving the bottom line of church schools and preventing their closure or merger. (Source: Hechinger)

That is exactly what concerns Joshua Cowen, a professor of education policy at Michigan State University. He told Hechinger that private school tuition was already too high for many families and would continue to be regardless of whether they get a tax subsidy. He argued that pro-voucher campaigns by lobbying groups are really aimed at saving religious schools through voucher subsidies.

“Vouchers are at least partly about bailing out financially distressed church schools,” Cowen told Hechinger. “Once school vouchers come to town, taxpayers become the dominant source of revenue for churches.”

Another example of how voucher advocates are pushing the historic boundary between church and state is an effort by the Archdiocese of Oklahoma to have taxpayers convert it St. Isidore School into a charter school. If that happens, St. Isidore would become the first religious school in America to be funded 100 percent by taxpayers. (Source: Politico, December 29, 2023)

Oklahoma’s Republican attorney general says it is unconstitutional for the state to fund a St. Isidore charter school. But voucher proponents are preparing to take the case to the U.S. Supreme Court to see if they can knock down another wall in the separation of church and state. (Source: Politico)

If the voucher lawyers are successful in the Supreme Court, as they were in the 2020 Espinoza case, voucher opponents fear that legislatures across the country will start funding church-sponsored charter schools. Then, at least in education, the historic Jeffersonian view of church and state separation will be virtually non-existent. (Source: Politico)

As voucher costs soar, Arizona faces a financial crisis

Meanwhile back in Arizona where taxpayers are on the hook to pay more than $1 billion in private and religious school subsidies, the state is facing an estimated $407 million deficit, according to Arizona’s Joint Legislative Budget Committee. The committee was told in late December to expect that deficit to continue growing over the next six months. (Source: Arizona Mirror, December 29, 2023)

Voucher proponents say, no problem, they will just tap the state’s limited rainy-day fund to make up for the shortfall. But others worry that the expensive universal voucher program, along with the adoption of a flat income tax, is digging the state into a financial hole. Arizona Governor Katie Hobbes warns that the voucher program “is not sustainable.”

Hobbes said the Arizona lawmakers need “to explain why it is forcing this runaway spending on Arizona taxpayers and making working families foot the bill for private school tuitions. We need to bring an end to the wasteful school voucher spending that threatens to decimate our state’s finances.”

Hobbes isn’t alone in her concern. Former Republican Rep. Joel John, who cast the deciding vote to adopt the universal voucher program after voucher lobbyists threatened to defeat him in the GOP primary, now regrets that he voted for the bill. “It was such a bad policy, I was embarrassed I supported it,” John said on X (formerly Twitter). “I’d like to see the legislature roll it back and reconsider the soundness of this policy, for sure.” (X: September 11, 2023)

Hobbes and John’s warning about the skyrocketing cost of vouchers is reminiscent of the warning Wisconsin Republican state Rep. Steve Kestell, the former chair of the state Assembly’s Education Committee, made when his fellow lawmakers considered a statewide voucher bill.

“This is a case where ideology sort of overwhelms good sense and judgment,” Kestrell told the Sheboygan Press. “Where people who should have known better and are good mathematicians aren’t willing to do the math. It’s because they don’t want to show that would be detrimental to their plans. And the math doesn’t work. It just doesn’t work.” (Source: Sheboygan Press, September 28, 2014)

Kestrell added, “That (fiscal) problem will be on steroids with the wide-open school choice program cutting across the state. No one has even tried to explain how we’re going to deal with that as a state. No one has tried to explain how we’re going to fund parallel school programs. Because that is where we are heading.”

As Kestrell warned, the Wisconsin voucher program now costs taxpayers $444 million a year. Recent efforts to make the law universal could raise property taxes in Wisconsin by $570 million a year, according to Wisconsin Department of Public Instruction. (Source: The Cap Times, December 13, 2023, and Wisconsin Examiner, February 17, 2022)

Hobbes and John are right. The problem facing Arizona policymakers and taxpayers is simple math: The state cannot afford to fund three new school systems – private, religious and homeschool. The state already ranks 48th in the amount it spends on public schools, pays teachers less than almost any state, has among the most overcrowded classrooms in the country, and faces a growing budget deficit.

That’s where Arizona’s story becomes a cautionary tale for Idaho’s lawmakers where the Gem State ranks 51st in per pupil funding and faces a $1 billion or more backlog in school facility improvements. Meanwhile, the Idaho Supreme Court has already ruled that legislators are not fulfilling their Constitutional mandate to support our public schools. Not to mention that passing the first private school voucher bill will repeal the Idaho Constitution’s prohibition against funding religious schools by statute instead of by a vote of the people, as the Constitution requires.

The voucher lobby is gearing up for the 2024 Idaho Legislature

The effort to win approval for the Horman-Den Hartog voucher tax-credit bill and a voucher ESA bill in the upcoming Legislature is being led by many of the same organizations that led passage of the Arizona and Florida universal voucher and voucher tax-credit laws, including the American Federation for Children (AFC), which has hired pricey lobbyists in Idaho to pursue its school privatization goals.

The AFC and Young Americans for Liberty are by far the biggest lobby spenders in Idaho, according to the Secretary of State’s Office. AFC reported spending the most last year, $81,313, and Young Americans for Liberty the second most, $59,279, of any lobbying organization. Another pro-voucher group, the Citizens Alliance of Idaho, is the fourth biggest spender at $36,313.

The Idaho Freedom Foundation, which is the loudest voucher advocate in the state, claims it didn’t spend a dime lobbying last year, even though its lobbyists are a constant fixture at the Statehouse. The IFF also doesn’t disclose who funds its organization. But it is one of two Idaho “affiliates” of the State Policy Network, a dark money fund that is bankrolling pro-voucher advocacy groups across the country.

The pro-voucher lobby’s spending far exceeds Idaho’s traditional lobbying groups such as the Idaho Farm Bureau ($18,712); the Idaho Realtors ($14,448); and the Idaho AFL-CIO ($14,037). For the record Idaho Business for Education spent about $14,000, including on the organization’s annual Legislative Academy, which is designed to educate legislators, education leaders, concerned citizens, and the media on pressing education issues.

The stakes are high

As you can imagine from what has happened in Arizona and Florida, the stakes are high in the fight over vouchers for Idaho’s public-school students and taxpayers. The years of having large budget surpluses in Idaho are over and there will be a lot of competition for funding in the upcoming session.

Any money that is diverted from the state coffers to pay for vouchers or voucher tax credits, will be money that cannot go to help students get the education they need for a good career through Governor Little’s Idaho Launch program. And every taxpayer dollar that goes to vouchers, would be a dollar that can’t go to fix Idaho’s decrepit school buildings.

Like in Arizona, it is simple math – Idaho can’t afford to financially support two new school systems – one private, the other religious. Especially when it can’t adequately fund the public schools that more than 80 percent of our children attend.

The voucher lobby will put incredible pressure on our lawmakers to pass a voucher-scholarship or a voucher tax credit this year. They will threaten that they will defeat them in the May primary, just as they did Rep. Joel John in Arizona. But lawmakers should not be fooled – even if they vote for a voucher bill they will be opposed in the primary. That’s exactly what happened to John when he cast the deciding vote for the universal bill.

No doubt there will also be pressure on Gov. Little to support one of the voucher bills in return for the Legislature supporting his Idaho Launch program or his plan to fix Idaho’s dilapidated schools. That has happened to other governors in the country who have been held hostage by voucher advocates.

But the governor should not yield to these threats. We can always fight for Idaho Launch or school restoration, but once we approve the first voucher bill, we will fall into the fiscal abyss other states have. Idaho taxpayers will have to live with the cost of those vouchers for decades to come.

Idaho’s historically conservative lawmakers should not bend to the voucher lobby’s pressure. They still have time to avoid the fiscal nightmare that states like Arizona face. They still have time to stick up for their public-school students, their communities, and for the taxpayers of Idaho. They still have time to heed the cautionary tale from Arizona.

In short, they have time to decide that vouchers are not good for Idaho.

Rod Gramer

Rod Gramer

Rod Gramer is president and CEO of Idaho Business for Education, a group of Idaho business leaders dedicated to education excellence.

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