ESA Trailblazer Arizona Paves Way, Provides Lessons for States

By Matt Ladner

In “The Aviator,” director Martin Scorsese tells the story of Howard Hughes.

Hughes is portrayed by Leonardo DiCaprio as obsessively pushing the envelope forward in aviation, breaking both technical and legal barriers to progress. Pan American Airways serves as the film’s antagonist, attempting to preserve a legal monopoly on trans-Atlantic flight. Hughes sees this as “un-American.” He overcomes the Pan Am monopoly within a couple of hours of screen time.

District near-monopoly on K-12 education has greater staying power. K-12 has been slowly evolving to become more diverse, pluralistic and dynamic. Education scholarship accounts (ESAs, also known as education savings accounts) represent the next step for Georgia to modernize K-12.

The first K-12 education savings account program was created in 2011, in Arizona. Participating students receive an account with 90 percent of the state education funds in lieu of attending a public school. These accounts have multiple uses: private school/community college or university tuition, tutoring, online programs, special education-related therapy services, curriculum, and testing, among others.

Families can use either single or multiple service providers to craft the best possible education for their individual child. Following Arizona’s lead, Florida, Mississippi, North Carolina and Tennessee implemented ESA laws. Each state, like the original Arizona legislation, focused on students with disabilities.

Currently, families of students with disabilities can sue school districts for a private school placement when officials have failed to provide appropriate services under federal law. These placements and lawsuits can be very expensive for districts. One of Arizona’s first ESA families was on the verge of filing such a lawsuit but decided to use the new ESA program instead when they learned it would take tens of thousands of dollars and years in court.

Everyone won. The district didn’t get sued or tied up in a lengthy lawsuit and, best of all, the family was able to double the amount of physical therapy their child had been receiving in the public school. The families of students with special needs have realized large benefits to an approach that allows them to hire multiple tutors and therapists.

Arizona’s experience can hold lessons for Georgia. Arizona lawmakers implemented the ESA program with a debit card mechanism. The ugly truth is that any publicly funded program will result in misspending of funds to some degree, but this can be minimized. Approximately 1 percent of Arizona funds have been misspent. The solution is usually a simple requirement to have the family reimburse the account.

Actual cases of fraud have been prosecuted. For the sake of perspective, however, consider that misspending and fraud in the food stamps (SNAP) program often reached a whopping 7 percent of funds.

Subsequent ESA states have learned from Arizona and implemented a closed-market system:  Officials authorize vendors into an online platform for purchases. These systems will reduce misspending and fraud further. They also allow families to rate schools, products and service providers to help inform the decisions of other participating families. Arizona officials recently put out a request for proposals to transition to such a system.

The Georgia Constitution guarantees public funding for public education; that is in no way at any risk from an ESA program. In fact, Georgia has both hundreds of thousands of new students on the way, and even more students already in the system not getting the knowledge, skills and habits needed for success in life.

Georgia’s K-12 education system should evolve over time from a one-size fits all system to one that embraces a pluralistic and growing number of choices in both schools and education service providers. It’s the way of the future.

Dr. Matthew Ladner, Senior Research Strategist for the Arizona Chamber of Commerce Foundation, wrote this commentary for the Georgia Public Policy Foundation.

The Foundation is an independent, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (March 29, 2019). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.

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