The Grand Canyon Institute of Arizona audits the use of tax dollars that are spent for public and private schools. Under Governor Douglas Ducey, the state has been very generous to private, religious, and charter schools, but not with public schools.

Here is its latest report:

Dave Wells, Research Director, (602) 595-1025 Ext. 2
Amy Pedotto, Communications Manager, 602-595-1025, Ext. 3

State pays $10,700 subsidy for private school students;
75 percent more than their public school peers

Phoenix — According to a new policy paper, Arizona’s two private school subsidy programs cost the state $10,700* on average per regular education student who would not otherwise have enrolled in private school. This imposes an additional $62 million expense on the state’s General Fund.

Published by the non-partisan think tank the Grand Canyon Institute (GCI), the policy paper $10,700 Per Student: The Estimated Cost of Arizona’s Private School Subsidy Programs looks at how the state’s two private school subsidy programs — private school tuition tax credit scholarships and Empowerment Scholarship Account (ESA) vouchers — have impacted private school enrollment and then estimated a per student cost to taxpayers. The paper looks at regular education students; it does not include students with disabilities because of the significant cost differences in providing their education.

The study’s findings also include that:

The estimated cost per subsidized private school student has increased $700 in the two years since GCI first analyzed the cost of the subsidy programs in Arizona.

On average, taxpayer-funded private school subsidies cost an additional $4,700 or 75 percent more per student than the $6,000 the state pays to educate a regular education public school student when paid entirely from state funds.

In 2015-16, private school subsidies cost Arizona’s General Fund a total of $141 million, nearly a 50-fold increase from $3 million in 1999-2000.

In 2015-16, GCI estimates that 13,170 students who used the taxpayer-subsidized program would have attended public school if the scholarships and vouchers were not available.

Private school as a percentage of total student enrollment has declined from 5.9 percent to 4 percent since Arizona first introduced a private school subsidy in the late nineties. An increase in the percentage of private school enrollment would have occurred if the programs were more effective.

“GCI’s research of academic studies found that lower income families using similar subsidy programs in other states frequently had negative academic impacts compared to public school peers,” Wells says. “The study raises questions about the efficacy of private school subsidy programs as voters are asked to expand Arizona’s ESA voucher program with Prop. 305 this November.”

George Cunningham, GCI’s board chair and former state legislator, commented, “Arizona can’t afford fiscally irresponsible private school subsidies that siphon money away from its public education system. These subsidy programs are placing an increasing burden on the state’s General Fund meanwhile research shows they provide no academic benefit when comparing demographically similar students attending public and private schools.

“Given these facts, it is appropriate to ask why our state government would continue tuition tax credit scholarships and seek to expand ESA vouchers to the general education population. At a minimum, it is strongly recommended that the total amount in tuition tax credit scholarships a student can receive be limited to the amount paid by the state for regular education public school students similar to ESA vouchers.”

What are Arizona’s two private school subsidy programs?

Tuition tax credit scholarships were introduced two decades ago. They divert individual and corporate taxpayer dollars from the state’s General Fund, providing donors a dollar-for-dollar reduction in taxes owed while decreasing the state’s revenue. GCI’s research found that in many cases students are receiving more than one tax credit scholarship by applying for funding from multiple School Tuition Organizations (STOs), the private organizations that accept tuition tax credit donations and distribute them to students.

ESA vouchers were introduced in 2011. Distributed by the state’s Department of Education and financed from the General Fund, ESA vouchers allow certain categories of students to attend private schools such as those with disabilities, students from D and F rated public schools, foster children and children of veterans. GCI’s paper did not include vouchers used by students with disabilities in its analysis due to the significant cost differences in meeting their needs. In November 2018, Prop. 305 will give Arizona’s voters the opportunity to decide whether ESA vouchers should be made available to all students, a significant expansion to the program.

Click here to read the full report.


First, GCI’s analysis estimated that 13,710 out of 46,252 regular education students attending private school in Arizona did so because of the state’s private school subsidies. The ratio of Arizona to US private school enrollment as a portion of all students (0.45) was the dependent variable used in the regression analysis to control for any factors outside of Arizona that impacts private school enrollment such as recessions or economic growth. All of these factors impact private schools generally and would not have a separate impact on Arizona’s private schools. The analysis’ independent variables were the state’s enrollment growth of charter schools and private school subsidies because in both cases Arizona far exceeds the national average.

Next, GCI determined the cost of private school subsidies to the state, for those regular education students that chose private school because of the subsidy programs. This amount was calculated based on the total value of subsidies allocated for regular education students ($140,874,776) divided by the number of students that opted for private school due to the subsidies (13,710). GCI determined that subsidies cost the state an average of $10,700 per regular education private school student for those that would have attended public school if the private school subsidy programs weren’t available.

Finally, Arizona’s private school subsidies cost $140,874,776 for regular education students who would not have otherwise attended a private school. For this analysis, GCI uses the cost of educating a charter school student ($6,000) for comparison because the state government uses this amount to determine the value of ESA vouchers for a regular education student. The cost of educating a charter school student is used in GCI’s analysis because they are completely state funded, whereas the cost of educating a public district school student varies per district based on a state and local funding. (This provides a more conservative comparison because the average cost of educating a regular education student in a district school is less than a charter school.) Arizona would have spent $82,260,000 to educate taxpayer-subsidized private school students if they had attended a charter school instead. Therefore, Arizona’s private school subsidies increased the cost of educating these regular education students by $4,700 each or $62 million in total.

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