Horne: Governor’s ESA cost alarms unfounded Independent analysis shows program will save tax dollars

For immediate release: August 7, 2023
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Horne: Governor’s ESA cost alarms unfounded
Independent analysis shows program will save tax dollars

PHOENIX – Arizona schools chief Tom Horne says an independent analysis of how much the Empowerment Scholarship Account (ESA) program will cost shows the dire predictions made by Governor Hobbs and other opponents of the program are incorrect.

After studying a detailed review by education analyst Dr. Matthew Ladner, Ph.D, regarding the various sources of school funding and how ESA funding impacts the state budget Horne offered these comments:

Horne stated, “I agree with Dr. Ladner that the cost of the ESA program will never be $943 million for reasons which I will explain. But even if it were, that would be only about one percent of the fiscal 2022 state budget of $80.5 billion.

Here are the reasons the cost will never be anything like $943 million.

Taxpayers pay both state and local taxes. Combined they contribute about $13,000 per student for every student in public school. If a student leaves a public school for a private school, and obtains a payment from ESA of $7200, that is a savings of about $6000 per student to the taxpayers.

If the student was never in a public school but was already in a private school when the ESA program was adopted, there is still a benefit to the state for the following reasons: many students in private schools are beneficiaries of the tax credit available for contributors to the student’s tuition. If they choose to take the $7200 from the ESA program, they have to give up that tax credit. This increases revenues to the state, because the tax liability that previously was erased by the tax credit now has to be paid to the state.

Dr. Ladner has studied the issue thoroughly and without political bias. His analysis should be read to reassure taxpayers the ESA program saves tax dollars and is sustainable.”