ESA Utilization in Rural Arizona
By Mr. Sean Rickert, President, Arizona Rural Schools Association
During the past year, it seems hardly a single news article has been written about schools in Arizona without mentioning Arizona’s Empowerment Scholarship Accounts (ESAs) also known as vouchers. So, I decided to take a look at the latest report on ESA utilization through a rural lens.
The news about ESAs covers concerns about the effect on our state budget and the ability of Arizona to fund everything from K-12 schools to non-education needs like roads, healthcare and prisons. The narrative is that the funding being provided to support ESAs is diverting resources from everything else in a state where there is traditionally very little extra money. Reports on the upcoming budget (always dire this time of year) indicate the FY 2027 budget may have some deficits needing to be addressed. ESAs are also part of the discussion whenever the struggles many school districts are facing because of declining enrollment. Along with declining birthrates and rising home costs, ESAs are touted as a factor forcing school boards to have to make hard choices about staffing levels and school closures. Most of this news, like the news about everything else in Arizona is focused on the population centers of Phoenix and Tucson. So, what is happening in the rest of the state?
Data used in this analysis comes primarily from the ESA FY25 Q4 Report published by the Arizona Department of Education pursuant to ARS 15-2406. Included in that report is a wealth of information about who receives ESAs, where they attended school before receiving an ESA and where they live. It also breaks down how ESA dollars are spent and looks closely at the special needs student population being served through the ESA program. We aren’t going to cover even a fraction of the information included in the report, but its content is very informative. Additional analysis was performed to break out the rural ESA students from the non-rural. This was done using the same definition of rural I’ve used elsewhere. The thirteen rural counties along with the portions of Pima and Maricopa counties with rural NCES designations. This approach captures some non-rural areas, especially in Pinal County, but leaves out some rural areas in Maricopa and Pima counties.
What can we say about ESA utilization in Arizona and how it compares to ESA utilization in rural Arizona? First, of the state’s 1.1 million K-12 students 7.75% are ESA recipients. Of those 85,195 students 25,591 live in rural Arizona. That accounts for 30% of ESA recipients in a state where only 21% of the student population comes from rural schools. Of the 226,000 students attending rural schools, 11.32% participate in the ESA program. So, it appears ESA enrollment is more prevalent in the rural counties.
Like so many other aspects of the Arizona education landscape, looking at statewide averages obscures a great deal of useful understanding. So, how does ESA participation vary across the state? ESA participation rates range from 5.41% in La Paz County to 33.36% in Greenlee County. That is a huge amount of variation, and it is notable that based on population those are the two smallest counties in Arizona. Gila, Graham, La Paz, Mohave, and Navajo counties all have ESA utilization rates below the state average. One thing these counties have in common is higher than average percentages of students living on reservations. Because of the additional funding provided to schools serving student populations living on federally designated reservations, ESAs cover a smaller percentage of non-ESA school funding making it hard for ESA funded private schools to compete with the much better funded public schools. At the other end of the spectrum Cochise, Greenlee, Pinal and Yavapai counties all have ESA utilization rates greater than 150% of the state average. Basically, we can see that there are rural areas where ESA utilization is lower than the state average, but for most of the state’s rural counties ESA students represent a disproportionate segment of the student population, far greater than what we see elsewhere.
Whenever you break out the rural student population it also sheds light on the non-rural student population. As mentioned above and often referenced in the news, just shy of 8% of Arizona students have elected to participate in the ESA program. But, if the level of participation in rural Arizona is greater than the state average, how much lower is the participation rate in the non-rural parts of the state? It is almost a full percentage point lower than the state average. Only 6.87% of the non-rural Arizona student population funds their education through ESAs. That is lower than all but two – Gila and La Paz, rural counties. So, while the news touts the challenges being faced by the big metropolitan districts, we know that the challenges they are experiencing are being felt even more distinctly in rural Arizona. Rural schools are just as likely to have to reduce their teacher force as schools in Mesa. They are just as likely to have to close schools as Kyrene or Tempe Elementary districts. And, they are just as likely to find themselves in financial distress as Isaac.
An undiscussed portion of the dynamic surrounding ESA participation in rural counties is the higher level of homeschooling found in rural Arizona. At this time data isn’t available to show how the high levels of ESA participation in rural counties is affecting public school enrollment. Many rural districts were facing perennial declines in Average Daily Membership for many years before ESAs showed up on the scene. As soon as that information becomes available, it will be worth looking at in this context. However, it is difficult to disaggregate the effects of ESAs on enrollment from other factors like birth rate, shifting employment opportunities and highly variable housing costs, which we know affect school enrollment. In a world where the rural education leader must unravel the mysteries and uncertainty around current year enrollment based funding, ESAs definitely add an extra wrinkle. While it is clear that ESA participation is higher in rural Arizona, and we know there are students leaving public schools to participate, there are still many aspects of this puzzle which are difficult to understand or anticipate .