Education vouchers play a key role in $206 million funding shortfall for school districts and charters as lawmakers remain on vacation
Some state education leaders were stunned to learn they may not get their June payments on time from the state because of a $206 million funding shortfall.
One of the key reasons: State vouchers.
Empowerment scholarships, which 12News found primarily help the wealthy, are a key factor in the shortfall, according to the Arizona Department of Education.
That agency on Wednesday notified schools across the state that their June payment could be late, as the Republican-controlled Legislature and Democrat Gov. Katie Hobbs have not agreed to a budget.
State Schools Chief Tom Horne told 12News the shortfall was supposed to be rolled into the new budget that begins July 1.
State Sen. John Kavanagh, R-Fountain Hills, told 12News that lawmakers since January have been aware there was going to be an education funding shortfall. Yet, Kavanagh said the price tag has increased by more than $30 million.
He said the state has enough money to cover the shortfall and everyone will get paid—but the payouts could be late.
Lawmakers have mostly been in recess for about a month due to a breakdown in budget negotiations.
Horne said the funding would not have been a problem had lawmakers and the governor agreed to a spending plan for 2025-2026. He said his office is not to blame.
The two biggest reasons for the shortfall are that more kids are in public schools than projected, and there was a settlement involving school districts in Maricopa County. That accounted for $114 million of additional spending, or more than half the deficit.
Then there's the voucher issue.
In 2022, then Gov. Doug Ducey signed a massive expansion to the state's voucher program, giving them to anyone regardless of income. The state had projected that vouchers would cost the state $820 million for this school year. But the actual number was $872 million.
That's a $52 million difference and roughly one-fourth of the funding shortfall.
Vouchers are projected to cost taxpayers $1 billion for the upcoming school year.
"ESAs are an unaccountable, billion-dollar entitlement program that's taking money from public education and funneling it to buy baby grand pianos, ski passes, and luxury car driving lessons for the wealthiest Arizonans," Hobbs said in a statement to 12News. "It's time that we demand the same transparency and accountability from ESAs that we demand from any other entitlement program in Arizona."
Horne defended the empowerment scholarships, saying they were not the driving factor for the shortfall.
However, he has come under fire recently from far-right Republicans and primary challenger Kimberly Yee for putting limits on lavish purchases.
The money crunch shouldn't affect most teachers because they have already been paid for this past school year, said Paul Tighe, executive director of Arizona School Administrators.
He said administrators or other employees, like custodians, could take a hit, and vendors may have to wait to get paid.
"If they don’t have significant cash reserves that could present problems for them for being able to meet payroll and pay bills, or cause districts to borrow money," he said.
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