Are Arizona Classrooms Really in Crisis?

Get the Facts:

  • While Arizona’s spending on education is growing faster than the national average, our state still ranks 49th in the nation ($13,000 behind the national median) for median elementary teacher pay and 46th in the nation ($4,200 behind the national median) for per-pupil spending.

  • AZ has the 2nd most crowded class sizes in the US

  • There are 3,400 classrooms without a certified teacher, and 70,000 students without a permanent teacher

Teacher Retention Crisis:

According to the Morrison Institute for Public Policy’s report “Finding and Keeping Teachers for Arizona’s Classrooms”

  • 42% of AZ teachers (and 52% of charter teachers) quit within 3 years (2013-2016)
  • 22% of the teachers hired between 2013 and 2015 were not teaching in AZ after one year
  • Over ⅓ of AZ teachers have been in the classroom for four years or less
For more information, visit the Arizona School Personnel Administration Association‘s data on teacher vacancies for 2018 and the Arizona Community Foundation’s extensive research on Addressing the Teacher Labor Market Challenge (2018).

Attrition Data Table

Spending Cuts:

Arizona has suffered more cuts to K-12 education than any other state – and AZ was ranked 47th in funding before the 2008 recession. Despite economic recovery after the recession, AZ has cut an additional $1 billion from our education budget since the recession ended. Capital funding has been cut by $2 billion since 2009, $1.2 billion for full-day kindergarten was cut in 2011, and $256 million has been cut from the building renewal formula.

Spending cuts since 2008 by state

Spending cuts since 2008, by state.

Despite the need for more funding for priorities like education, lawmakers continue to actively reduce state revenues. Arizona’s many tax exemptions, deductions, allowances, exclusions and credits affect how much money the state has to spend on its priorities, including education. These carve-outs (known in state law as “tax expenditures”) easily dwarf the state budget: in FY 2018, tax expenditures totaled more than $14.7 billion, compared to a budget of $9.8 billion. 

What is school privatization?

“School privatization” is a blanket term used to describe any mechanisms that put education services under the control of private, for-profit corporations instead of locally run school boards. This can include private school vouchers (such as tax credit scholarships and empowerment scholarship accounts), online digital learning services, for-profit charter schools, and much more. 

What are ESA Vouchers?

In Arizona, ESAs (Empowerment Scholarship Accounts) provide state tax dollars to families to pay for educational services. ESA vouchers are valued at $5,000 to $33,000 per student, per year. The state tax dollars are loaded onto a debit card, which parents may use for many educational services, including private, religious school tuition and homeschooling.

In 2009, vouchers were ruled an unconstitutional appropriation of public money because tax dollars went directly to private, religious institutions (Cain v. Horne). Empowerment Scholarship Accounts were created as a workaround, giving state tax dollars directly to parents to use as they saw fit. In 2011, Arizona was the first state to pass ESA voucher legislation.

Since 2011, Arizona’s ESA vouchers have been expanded nearly every year to new categories of students, including those with special needs, students in military families, children on Native American reservations, and those opting out of D and F-rated school districts. 

The ESA program, which began as a small $1.6 million program in 2011, now diverts over $75 million per year from public schools to private schools and other educational services.1 In 2017, the Arizona State Legislature passed SB1431, which would have opened up the program to all students in Arizona (commonly referred to as “universal voucher expansion”). This bill was referred to the 2018 ballot by Arizona citizens as Proposition 305, which was soundly defeated by a 2-to-1 margin.

What are STO Vouchers?

In 1997, Arizona passed the first of four tax-credit scholarship programs, called school tuition organizations (STO vouchers). These STO vouchers allow individual taxpayers and corporations to receive dollar-for-dollar tax credits for their donations to STO companies that process school scholarships for private school tuition to K–12 students. This is money that never hits the state general fund, thereby greatly decreasing the amount of funding available for public schools.

Arizona’s STO voucher programs include: the Original Individual Income Tax Credit Scholarship Program (1997), Low-Income Corporate Income Tax Credit Scholarship (2006), Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program2 (2009), and the “Switcher” Individual Income Tax Credit Scholarship Program. STO vouchers primarily go to students in metropolitan areas and 93% of the vouchers are granted to schools with a religious affiliation.

In Arizona, STO companies are legally permitted to keep 10% of all donations to pay for operational costs. Other states that have adopted STO voucher programs charge a significantly lower administrative fee of 3-5%. Arizona’s high administrative fee has led to a cottage STO industry that is very lucrative for owners and operators in Arizona. STOs have very few procurement policies and very little accountability or oversight of the program or the schools to which the funding is given.

Arizona’s STO tax credits topped $160 million in 2017. There is no limit to how much a corporation can donate; however, in 2016 an aggregate limit on corporate STO tax credits was capped at $69.1 million. After years of unrestricted growth, the Arizona State legislature passed a bill in 2019 that will gradually reduce the cap on annual group of corporate STOs to 2% and keep up to $263 million from being diverted to private schools over the next 5 years.

STO growth by year

What are the funding impacts of school privatization?

Through the mid-1990s, Arizona’s public schools were adequately funded. Sixty years ago, Arizona ranked 19 in per-pupil spending. By 1990, we ranked 34th, and our rank dropped to the bottom 5 states by the end of the 1990s. This directly coincided with the ushering in of school tuition organizations and other privatization schemes in the late 90s.

In the past 25 years, we have seen a dramatic increase in public funds used for private and for-profit schools through private school vouchers, which drain hundreds of millions of public dollars away from our public schools each year.

The annual amount of money being diverted from our state general fund (and therefore our public schools) via STO and ESA vouchers:

$ 0
Total amount lost

1 2019 JLBC Appropriations Report estimates $75,918,600 for 5,730 students in FY 2019 up from $60,218,100 for 4,545 students in FY 2018, also an estimate. Actual FY 2017 figures: $44,517,700 total awards for 3,360 students.

2 Lexie’s Law is names for Lexie Weck, an 8 year old girl born with autism, cerebral palsy and an intellectual disability.

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