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The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?


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Today, the Friedman Foundation released a one-of-a-kind fiscal assessment that covers the operational life spans of school voucher programs. What fiscal effects do vouchers have on states, schools, and taxpayers?

In it, Jeff Spalding, our director of fiscal policy and analysis, addressed the following questions:

-What is the proper way to measure school vouchers' fiscal impact?

-Why are the fiscal effects of voucher programs so often misunderstood?

-What are the annual and long-term fiscal impacts of school vouchers?

Published in: Education
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The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?

  1. 1. breaking down THE SCHOOL VOUCHER AUDIT Do Publicly Funded Private School Choice Programs Save Money?
  2. 2. School choice advocates have always used the savings potential of vouchers as a positive selling point. @edchoice
  3. 3. Since the creation of the first voucher program in 1990, six studies have examined the fiscal impact of school choice on taxpayers. @edchoice
  4. 4. All six show school choice saves money for taxpayers. None found a negative impact. @edchoice
  5. 5. @edchoice But still, that wealth of evidence hasn’t stopped school choice opponents from claiming otherwise.
  6. 6. “Myth 1: Vouchers save money” -National Education Association “Vouchers do not save taxpayer money” -Americans United for Separation of Church and State “MYTH: Vouchers save taxpayers money” @edchoice -Education Voters of Pennsylvania
  7. 7. So what is getting lost in translation? @edchoice
  8. 8. Our Director of Fiscal Policy and Analysis... @edchoice JEFF SPALDING • Former Controller/Chief Financial Officer for the City of Indianapolis • Two-time Fantasy Football Champion • Elton John Enthusiast • Roger Federer Fan • Dad of sixth-grader Elly
  9. 9. ...not only examined the fiscal impact of voucher programs... Student Scholarships for Educational Excellence Program | Louisiana Georgia Special Needs Scholarship Program | Georgia Educational Choice Scholarship Program | Ohio Carson Smith Special Needs Scholarship Program | Utah Opportunity Scholarship Program | Washington, D.C. Autism Scholarship Program | Ohio Opportunity Scholarship Program | Florida Cleveland Scholarship Program | Ohio 1990 2001 1995 2006 1992 2003 1997 2008 1991 2002 1996 2007 1993 2004 1998 2009 1994 2005 1999 2000 2010 @edchoice Milwaukee Parental Choice Program | Wisconsin John M. McKay Scholarships for Students with Disabilities Program | Florida
  10. 10. ...he also walks through how he made each calculation for full transparency. @edchoice
  11. 11. @edchoice To make sense of a calculation, first you’ve got to understand what you’re calculating.
  12. 12. After all, the numbers alone don’t indicate whether an outcome is good or bad. @edchoice 10 4 6
  13. 13. Opponents claim, simplistically, that school choice drains money from the public school system. I do not support vouchers. And the reason I don’t is because I don’t think we can afford to siphon dollars away from our underfunded public schools.” -HILLARY CLINTON @edchoice “
  14. 14. @edchoice
  15. 15. @edchoice
  16. 16. That rhetoric obscures an important fact: @edchoice A public school is also relieved of the cost burden for any student switching to private school. $ • speech therapy • remedial reading specialist • all other standard instructional costs +
  17. 17. By not acknowledging such variable cost savings, opponents implicitly argue that all public school costs are “fixed.” @edchoice
  18. 18. By that logic: If costs don’t go down when a public school’s enrollment declines... @edchoice
  19. 19. ...costs wouldn’t go up when a public school’s enrollment grows. @edchoice Enrollment Dollars Revenue Cost
  20. 20. One could argue school choice opponents basically say the relationship between funding and costs for instructing students looks like this: @edchoice Enrollment Dollars Revenue Cost
  21. 21. In actuality, the relationship between funding and costs looks more like this. @edchoice Enrollment Dollars Revenue Cost
  22. 22. For a voucher program to result in savings, this must be true: @edchoice Per-Student Cost Burden Removed from Public School Net Savings Per Student Cost of Voucher
  23. 23. To determine whether that is the case for a voucher program, use this equation: @edchoice ( Public School Cost Per Student x ) Number of Voucher Students ( Voucher Amount x ) Number of Voucher Students TOTAL NET SAVINGS
  24. 24. @edchoice We did the math.
  25. 25. @edchoice By taking their educational needs to independent schools, voucher students removed a cost burden of $4.5 billion from public schools. $4.5 billion ? ?
  26. 26. @edchoice From 1990 to 2011, students received $2.8 billion in voucher funds to attend independent schools of their choice. $4.5 billion $2.8 billion ?
  27. 27. @edchoice You read that right.
  28. 28. Voucher programs saved $1.7 billion. $4.5 billion $2.8 billion $1.7 billion @edchoice
  29. 29. @edchoice What happened to those savings?
  30. 30. Those funds are most commonly captured by either the public school districts or the state treasury, which can use them to: 1. invest in public schools, 2. invest in other priorities such as @edchoice law enforcement or healthcare, 3. lower total state spending, 4. build reserves, and/or 5. lower taxes
  31. 31. In fairness, however, some kids who use vouchers are not diverted from public schools. That is, they maybe could have attended private school without a voucher. @edchoice
  32. 32. But if a family’s financial hardship and inability to get a voucher were to cause parents to withdraw from private schools... @edchoice
  33. 33. ...already cash-strapped public schools would be hit with the financial responsibility of adding those kids to classrooms and funding their education. @edchoice
  34. 34. With that in mind, wonder how much more voucher programs could be saving? @edchoice
  35. 35. If vouchers would have been available to keep private school enrollment steady from 1985 to @edchoice 2010, our country could have saved $111 billion.
  36. 36. What has the U.S. education system accomplished instead? @edchoice Additional Cost of Total U.S. Enrollment Shift to Public Schools Private School Share of K-12 Enrollment 13% 12% 11% 10% $16B $14B $12B $10B $8B $6B $4B $2B 0 Private School Enrollment Share $222 billion cumulative additional cost for public schools, over 25 years, because of erosion in the private school enrollment share 2009-10 2005-06 2001-02 1997-98 1993-94 1989-90 1985-86 2007-08 2003-04 1999-00 1995-96 1991-92 1987-88 School Year
  37. 37. If these numbers piqued your interest, check out individual program breakdowns @edchoice and more in the full report at