The Governor’s Budget is Dominated by Education Freedom Accounts  

At Arkansas Advocates for Children and Families, we believe the state has the duty to invest in Arkansans, with a robust state budget that fully funds critical programs and services. Unfortunately, that investment is not seen in the governor’s Fiscal Year 2026 balanced general revenue budget.  

The proposed budget represents an increase in spending of $183 million, or 2.89% over the current year. Nearly half of the increase, or $90 million, is to prepare for the 2025-26 school year when Education Freedom Accounts (private and homeschool vouchers) will, for the first time, be available to all students statewide. This will bring the total funding for vouchers to almost $188 million. 

The governor and the Department of Finance and Administration are proposing an additional $90 million in a “set-aside” for Education Freedom Accounts. This money does not appear in the budget, but rather in “one-time funding” to be accessed if demand exceeds the budgeted amounts for vouchers. During the follow-up to the governor’s official remarks before the legislative Joint Budget Committee last Thursday, DFA Secretary Jim Hudson stated this set-aside was “a new approach.” State Budget Director Robert Brech added, “We didn’t want to put too much into the RSA.” The RSA, or Revenue Stabilization Act, is the official general revenue budget for the state.  

With the additional voucher set-aside, total funding available for Education Freedom Accounts reaches nearly $278 million. That’s a 185% increase over the current year. The governor and staff have good reason to expect this level of necessary funding. Demand for vouchers nearly tripled from the first to the second year as the program became available to more students. Representative Jim Wooten estimates that if this rate of growth continues over the next two years, vouchers will cost the state $402 million. According to the 2023 American Community Survey of the U.S. Census, there are an estimated 74,358 students enrolled in private schools in Arkansas. If they all sign up for Education Freedom Accounts, it will cost the state of Arkansas a whopping $510 million every year! While all families might not apply for vouchers, we know demand is high given the 3,318 students on the waiting list this year, even before Education Freedom Accounts are available universally. And this calculation does not include additional homeschool students who might also take the vouchers, nor does it include parents of new kindergarteners choosing private over public school at a higher rate than before. But we shouldn’t be surprised by the high price tag, given that we see the same excessive spending occurring in other states with established private school voucher programs. 

At this point, it is unclear whether the legislative Joint Budget Committee, and the full General Assembly, will debate the voucher set-aside since it doesn’t appear in the Revenue Stabilization Act. It’s not enough to justify the set-aside because we might not need it. Instead of a more traditional approach of increasing the RSA line item for Education Freedom Accounts to include the additional $90 million, budget officials are using uncertain demand as justification for the voucher set-aside approach. But if the expected demand for Education Freedom Accounts does not materialize, budget officials can lower the budget in subsequent years, just as a family may no longer budget for childcare when a child enters public kindergarten. 

The governor’s budget demonstrates once again that tax-funded vouchers for private schools and homeschooling dominate any policy priorities. Mr. Brech stated that the Education Freedom Accounts set-aside will be paid for from the current and previous years’ general revenue surpluses. But then how do we pay for vouchers in future years, when the surpluses are slowly evaporating thanks to a decade of tax cuts? And if a future legislature baulks at the total price tag for Education Freedom Accounts, will it be willing to reduce funding, in effect taking away vouchers from families who have received them? Budget making is policymaking, and we are shortchanging our future.