Arizona voucher expansion: Cost of program grows far above initial projections as enrollment soars

Enrollment in the state's new universal school voucher program is approaching 34,000 students and will cost the state at least an extra $200 million this year, the latest records show.

That's far above what budget officials estimated in June 2022, when a narrow party-line vote opened up empowerment scholarship accounts to students statewide.

At the time, the estimated cost for the first year was $31.2 million, which would cover about 4,500 students, plus $2.2 million for administrative expenses. But the figures were "highly speculative," the Joint Legislative Budget Committee cautioned in a memo. Predicting enrollment was difficult and there was no model to follow as Arizona is the first state to create universal vouchers.

The program's fast-out-the-gate launch in July quickly changed the numbers landscape. By January, the JLBC estimated the program would draw 42,700 students by late June, the end of the current budget year, at a cost of $274 million.

As of mid-March, with nearly three months left in the budget year, the number of students with universal vouchers is at 79% of the year-end projection.

The only certainty appears to be that predictions are hard to make.

"We have no template for forecasting future growth," the budget committee reported in January. But it took a stab at it, estimating enrollment will hit 52,500 students by June 2024, at a cost of $376 million.

The costs, while not precise, are of little concern to lawmakers as they work on a new state budget.

"We will always fund education," said Rep. David Livingston, R-Peoria and the chairman of the budget-setting Appropriations Committee in the House.

The universal ESA program, long sought by Republican lawmakers, is the priority, he said.

His Senate counterpart, Sen. John Kavanagh, agreed. Besides, the state has a $1.8 billion surplus this year that will easily absorb the costs.

While Republican legislative leaders are confident the state can cover the cost of the booming program now and in the future, Democratic Gov. Katie Hobbs sees a train wreck coming.

"(T)he previous Legislature passed a massive expansion of school vouchers that lacks accountability and will likely bankrupt this state," Hobbs said in her State of the State address in January.