Goldwater Institute: Arizona Must Update the Education Finance Formula

by Jonathan Butcher

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On April 4, Gov. Jan Brewer vetoed an expansion to Arizona’s education savings account program and drew attention to a subject that affects all Arizona educators and students.
Originally passed in 2011, the savings account program provides families of students with special needs a bank account worth 90 percent of a students’ state funding as calculated by the state finance formula. Parents can use the funds for a variety of education expenses, including tutoring services, textbooks, online classes or even private school tuition. This freedom allows parents to customize their child’s education.
The bill would have expanded eligibility to students in chronically failing schools, academically gifted students, and children in military families.
In her veto, Gov. Brewer says education savings account students will be funded twice in the first year of participation. This double-funding is not unique to the savings accounts, Arizona taxpayers already spend tens of millions double-paying for students every year, but it can be avoided.
The weakness in the school funding formula: Public schools report enrollment after the midpoint in the school year – but are funded in the next school year based this count. Schools are paid for students they enrolled in the first 100 days of the previous school year, insulating them from enrollment changes due to grade promotion, the state’s open enrollment law or any school choice program.
It’s this funding model, based on old information, that causes inefficiencies such as the double funding of students once they transfer to a new school.
Arizona already funds charter schools based on current enrollment counts, and there is still time this session to apply this model to education savings account students, too. The policy can be structured so that the state does not count students twice.
This adjustment will save the state money and not interfere with parents’ ability to customize their child’s education with the savings account program. Hopefully with this fix, the Governor will reconsider her position on the expansion of education savings accounts.
Jonathan Butcher is education director for the Goldwater Institute.
Learn More:
Arizona Capitol Times: Huppenthal: Poor Information Technology Hurting Arizona Schools
Goldwater Institute: Education Savings Accounts: Questions and Answers
Goldwater Institute: Education Savings Account Expansion Will Help Hispanic Students