By Kevin McCarthy
The Arizona Republic

July 22, 2002

The recent U.S. Supreme Court decision on school vouchers has reignited debate on this important public policy issue.

This decision, as well as a similar ruling from the Arizona Supreme Court in 1999, opens the way for a healthy and focused debate on the benefits of vouchers.

While few would argue that the overriding benefit of vouchers is to empower parents with the choice of where to send their child to school, the financial benefits vouchers provide to taxpayers should also weigh heavily in future debates.

According to the most recent report from the state Department of Education, Arizona spent an average of $7,300 to educate every K-12 public school student for fiscal 2001. Total statewide spending for K-12 schools topped $6.2 billion, up from $5.5 billion in fiscal 2000, a one year jump of $699 million (12.7 percent).

As one the fastest growing states in the country, Arizona's top fiscal challenge is meeting the annual costs associated with ever-increasing student growth in our K-12 schools. By far the largest increase in the state budget each year is the appropriation to fund student growth.

The taxpayer savings associated with vouchers obviously hinges on the dollar amount of the voucher and the resulting shift of students from public to private schools. The optimum dollar amount would be one that provides an adequate incentive to parents to use private schools yet still provides significant savings to taxpayers.

The last serious effort to advance vouchers in Arizona in the mid-1990s pegged the voucher amount at $1,500 and was targeted at low-income parents.

Despite the fact that a limited voucher would not only save the state money and thereby provide greater budget flexibility for potentially higher per-pupil funding in our public schools, the public schools talk of financial ruin.

In Arizona this is a particularly curious argument. We have been conditioned by the public school lobby to believe that per-pupil funding levels do not cover the costs. To the extent that was true it would be financially advantageous for the public schools to shift the burden of student growth to the private sector.

Two recent changes in our school finance laws make vouchers an even more important tool to manage the significant fiscal challenges in Arizona's future.

First, as a result of a Supreme Court ruling Arizona is now responsible for not only the maintenance and operation expenses of our K-12 schools but the construction of schools as well. As a result, parents that chose to place their child in private school not only save the state those expenses but also the significant capital costs associated with building schools.

For years Arizona has been one of the nation's leaders in school capital outlay spending. With court-mandated capital spending and assured student growth our costs will only increase in the future.

The second major change was the mandatory increase in maintenance and operation funding required by Proposition 301, which increased the state sales tax rate 0.6 percent for K-12 school funding.

While the most prominent feature of Proposition 301 was the dedicated sales tax increase for schools, arguably the most important feature was the guaranteed increases in per-pupil funding required in the future.

The costs of this Proposition 301 mandate are not covered by the new sales tax, so the funding responsibility falls to the state general fund.

As a result, the challenges of funding unabated student growth in Arizona public schools will grow as lawmakers are locked into funding increasing costs per student.

Parental choice and competition in education are obviously sound policy reasons to embrace vouchers. However, as school costs skyrocket in Arizona, the taxpayer benefits of vouchers argue for quick action on the part of policymakers.

Kevin McCarthy is president of the Arizona Tax Research Association.