A Guide to Understanding State Funding of Arizona Public School Students

Posted on January 19, 2005 | Type: Policy Report | Authors: Susan Aud, Vicki Alger
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PREFACE, by Robert C. Enlow, Executive Director, Milton and Rose D. Friedman Foundation

As the debate surrounding school choice and school financing continues around the country, I am frequently struck by how little is known about how states fund K-12 education. Various legislatures and the courts mandate equalized funding and accountability, but states often lack the transparency necessary to ensure compliance. Given the complexity of school financing, typically only a handful of people in a state understand how funding formulas work or how much money is spent per student. Arizona is no different.

As a result, legislators must often develop school financing policies without accurate information, and the public must wade through competing claims that school choice would drain resources from public schools or save the state millions of dollars.

The analysis of Arizona's school financing system, conducted by Friedman Foundation Senior Research Fellow Susan Aud and our partners at the Goldwater Institute, helps remedy these problems by: 1) compiling Arizona Department of Education financial data and accurately detailing how public schools are funded; 2) clarifying the minimum funding amount the state has determined is tied to students when they enter the public school system or change districts; and 3) identifying the potential savings to the state under a system of education grants redeemable at both public and non-public schools. With this information, Arizonans now have the most comprehensive resource on school finance yet presented.

Importantly, the projected savings to Arizona from an education grant system resembles those found in several other states. Researchers from Utah State University and Southern Utah University, for example, projected that tuition tax credits could save the state between $26.4 million and $144.3 million annually. Studies by Clemson University's Cotton Lindsay and Brian Gottlob of PolEcon Research found, respectively, that an education tax credit program could save South Carolina $594 million by its fifth year, and a voucher program could save New Hampshire $9 million in its first year.

With the analysis of Arizona's school financing system, we are now seeing a growing body of evidence that simply cannot be ignored. In the end, this is not simply a study about school choice but about the transparency and accuracy necessary for ensuring a rational, informed and productive debate about education financing in Arizona. Ultimately, without these twin pillars of transparency and accuracy, states will have a much more difficult time ensuring the effectiveness of school financing and true accountability for performance.

Read A Guide to Understanding State Funding of Arizona Public School Students here.

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