Breaking Down “The School Voucher Audit”

Students transferring to private schools using publicly funded vouchers saved participating states more than $1.7 billion over a 20-year period. Here’s how:

From 1990 to 2011, students in six states and Washington, D.C., received $2.8 billion in voucher funds to attend private schools of choice. In making that choice, those students also relieved public schools of $4.5 billion in variable expenses. You do the math: $4.5 billion minus $2.8 billion equals $1.7 billion.

That is the chief finding from a new report by the Friedman Foundation for Educational Choice’s Jeff Spalding who analyzed the 10 voucher programs created between the 1990-91 school year, when Milwaukee launched America’s first such program, and 2010-11.

How states accrued the savings depended on the average voucher amounts compared with the average per-pupil variable spending in public schools, according to Spalding. When students leave public schools using vouchers that cost less than what was spent on them in the public school a net saving occurs.

Spalding found, for example, students in Ohio’s public schools labeled failing by the state cost, on average, $7,435 to educate. When those students left public schools using vouchers worth an average $3,702, either the state, the public schools, or both retained a portion of the difference for each departing student.

Those funds are most commonly captured by either the public school districts or the state treasury, which can use them to:

  • invest in public schools,
  • invest in other priorities such as law enforcement or healthcare,
  • lower total state spending,
  • build reserves, and/or
  • lower taxes

According to Spalding, voucher savings typically are funneled right back in to the public school system, something legislators, educators, and taxpayers aren’t often told—thus, many have the mistaken belief the savings never occurred.

And although such savings are only a small percentage of overall public education spending, the evidence provides yet another reason for states to consider, create, and expand vouchers.

What constituted public school spending in Spalding’s analysis were expenses tied to instruction, instructional assistance, and student support, which he said are most easily adjustable when schools must respond to enrollment changes.

There is an instance when school voucher calculations can become more complicated, however: When parents, who likely were going to enroll their children in private school without a voucher, are made eligible for such programs, that is an additional cost to states. But, even then, a voucher program can save states money.

In 1985, the proportion of American students enrolled in private schools was at its peak: 12.7 percent. Over the next 25 years, that number fell to 10 percent. As those parents, who cost taxpayers practically nothing when sending their kids to private schools, increasingly moved their children to public schools, that created a new expense for states and localities—which Spalding estimated to be $222 billion during that time span.

States either have had to increase taxes to cover that new cost or public schools have had to spread their finite resources over a larger body of students.

Had those same parents, from 1985 to 2010, received vouchers worth 50 percent of public schools’ per-pupil spending to keep their children in private school, states could have saved around $111 billion, according to Spalding.

Such public-to-private transfers enabled through vouchers likely are not going away anytime soon. From 2010 to 2013, 12 more voucher programs were created in eight states. In 2015, legislative attempts to create vouchers are expected in Alaska, Illinois, and Tennessee.