Arizona Public Schools Awash in Cash and Empty Classrooms: Why the ‘Underfunded’ Ruling is a Farce

A Maricopa County judge recently ruled that Arizona’s K-12 school facilities funding system violates our state Constitution, siding with four school districts in a lawsuit that began in 2017. This decision exemplifies how dysfunctional public school capital spending becomes by relying on formulas rather than need, available space, or common sense.

Judge Dewain Fox’s 114-page ruling asserts that Arizona fails to meet “constitutional minimum standards” for school facilities. As reported by 12NEWS, the judge included several pictures of damaged roofs, cracked floors, and peeling walls from various schools to emphasize how some districts ‘languish with substandard facilities for years.’

“After carefully and thoroughly reviewing the record and considering the parties’ arguments, the Court concludes that the current public-school capital finance system does not meet the constitutional minimum standards established by the Arizona Supreme Court,” the judge wrote.

Yet, this focus on a few isolated examples conveniently overlooks that Arizona’s district schools are not suffering from underfunding but from a profound mismanagement of existing resources.

The $20 Billion, 78 million square foot Elephant in the Room

While district officials and their lobbyists perpetually claim poverty, a comprehensive report from the Common Sense Institute (CSI) reveals a staggering reality: Arizona’s school districts hold more than $20 billion in combined cash reserves and underutilized real estate.

As documented by Heritage Foundation’s Jason Bedrick and Matthew Ladner, district schools have accumulated $7.8 billion in cash reserves, up $1 billion in just the past fiscal year, while simultaneously holding $12.2 billion worth of empty and underused buildings.

The scale of waste is almost incomprehensible:

Despite losing 47,500 students (a 5% enrollment decline) since 2019, districts have increased capital spending by 67% and added 499 new buildings
Arizona’s district schools operate at just 67% capacity, while charter schools run at 95%
The 78 million square feet of excess space in district schools could accommodate 630,000 additional students

This isn’t a funding crisis. It’s a management crisis.

And oftentimes, districts refuse to make better use of these assets. As Bedrick and Ladner put it:

“School districts often go to incredible lengths to avoid selling buildings to [charters and private schools], such as when Tucson Unified School District sold an unused building for 25% less than what a Christian school had offered, just so that a “competitor” wouldn’t have it.”

Here’s the real elephant in the room: despite bigger budgets, new or improved facilities, higher-paid faculty, and smaller classes, Arizona’s academic performance continues to plummet. Math proficiency has fallen 25% since 2019, according to NAEP assessments.

As Ethan Faverino reported in AZ Free News, administrative staffing has surged 6.7% since 2019, outpacing classroom staff growth. Teacher salaries have risen 24.1% to $65,113, and the average class size is just 17.7 students per teacher.

All this spending has yielded no improvement in educational outcomes. The CSI report reveals that the lowest-performing schools often have the most excess space, operating at just 19% capacity, while high-performing schools run at 70% capacity.

The Solution – Expand Educational Freedom

Rather than forcing taxpayers to pour more money into a broken system, Arizona should expand educational freedom and parental choice. As Bedrick and Ladner noted:

“The districts have enough cash reserves to raise the average teacher pay from $64,420 to more than $80,000 for 10 years and still have funds left over. If they sold off all their underutilized space, they could raise the average teacher pay to $100,000 for a decade and still have billions left over.”

The solution isn’t more funding. It’s better stewardship of existing resources and give parents more options. When 40% of incoming kindergarteners are already choosing charter or private schools, the market is speaking clearly about what Arizona families want.

Arizona Senate President Warren Petersen and House Speaker Steve Montenegro have both announced plans to appeal this ruling.

Good.

The judge’s decision ignores reality and demands more money for a system already flush with cash.

Our children deserve better than half-empty schools with overflowing bank accounts. True progress comes from efficiency and choice, not endless spending.

If you want to learn more about educational freedom here in Arizona, you can head to our page on Empowerment Scholarship Accounts (ESAs) here, or listen to our Engage Arizona episode on The Future of Educational Freedom in Arizona.

We also recently spoke with Sarah Parshall Perry, the Vice President and Legal Fellow at Defending Education at SoConCon 25, who shared insights on protecting educational freedom from government overreach. You can listen to that Engage Arizona podcast here.

Engage Arizona at SoConCon 25 – Continued

Speaking of SoConCon 25, here are the Engage Arizona podcast episodes we released this week:

Engage Arizona at SoConCon 25: Ryan McCann on Protecting Kids & Families

We sat down with Ryan McCann, President of the Indiana Family Institute, for a powerful conversation on defending parental rights, protecting children, and advancing pro-life laws in Indiana.

Engage Arizona at SoConCon 25: Matt Sharp on Public Policy and Defending Women’s Sports

We spoke with Matt Sharp from Alliance Defending Freedom about their shift to proactive public policy work, focusing on crafting legislation that protects religious freedom, parental rights, and fairness in women’s sports.

More SoConCon 25 Episodes