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How does school choice affect public schools’ funding and resources?

School choice programs affect public schools’ funding and resources in the same way they’re affected when a student leaves because their family moved to a new district—except with school choice programs, public schools get to keep almost all of the federal and local tax dollars and usually a portion of the state funds allocated for each child. Yes, public schools get to keep a significant portion of money for a student they no longer have the responsibility of educating.

In our opinion, when a student leaves a school—regardless of type—the school should no longer have to pay to educate that student. When any school gains or loses students, it must adjust accordingly. The most-used form of school choice in America is the one where families access a particular school by renting or buying a home in the district or utilize public-to-public transfer programs that allow them to attend a school outside the district where they live.

The biggest question policymakers have to answer when it comes to K–12 funding is whether the money set aside to educate children should follow them to the people and places that educate them—whether that’s in their district, outside their district, in a private setting, online or at home.

We believe it should.

What the Research Says

Researchers have conducted 52 analyses on the fiscal effects of private school choice programs. Forty-seven found these programs generated overall fiscal savings for taxpayers; four found programs were cost-neutral; and one found a Louisiana program for students with exceptional special needs generated net costs.

These studies not only account for the cost of a program, but they also account for students who switch from public to private schools and offset the program’s costs. Given that a large majority of students that participate in private school choice programs tend to be switchers (on average between 84 percent and 90 percent), it is not surprising that these programs generate significant fiscal benefits for states and school districts by relieving pressure on their budgets.

What each analysis has found is that public schools have some fixed costs, but most of their costs are variable, meaning costs are reduced when students leave the same way costs increase when new students enroll. That was true long before school choice programs existed, and it will continue to be. Click here for a detailed article that walks you through how researchers calculate the fiscal impact of school voucher programs.

To dive deeper into the complexities of school choice research, flip through this slide show.

For a fully cited list of studies, visit our school choice research bibliography page.

The Bottom Line

It is natural and crucial for taxpayers and policymakers to worry about public schools’ bottom line.

The reason we are often asked this question is because they’ve heard school choice will leave “already underfunded schools with even less funding.” But it’s important to understand how much funding public schools currently receive.

Total public school expenditures nationwide for fiscal year 2015 exceeded $650 billion, according to the most recent data available from the National Center for Education Statistics. That’s $12,500 per student. No state spends less than $6,800 per student. Some spend up to $20,700 per student.

Now, how much are states spending on school choice programs today?

Based on the most recent data available, only $2.3 billion across the entire country. The program (that isn’t a program limited only to students with special needs) with the highest average per-student funding is about $11,600. Some programs cost as low as $500 per student.

The truth? The people running public schools are often the biggest threat to public schools’ bottom line, not school choice.

School pension costs have doubled over the last 10 years from $500 per student to more than $1,000 per student because public school officials ignored fiscal experts’ warnings and chose to write checks for a pension plan they cannot cash…for decades.

To make matters worse, a recent study found that public schools have allocated $805 billion to hire seven times more non-teaching staff than they needed to meet the demand of student growth—while simultaneously reducing teacher salaries. That’s right. Public schools intentionally hired far more non-teachers than they needed to match student growth, causing an overall reduction in teacher salaries.

Anyone can see funding school choice today is a drop in the bucket compared to public school spending. And it’s pretty easy to argue that drop is spent more efficiently, too.

When we all begin to look at public education funding holistically and have an honest and objective conversation about it, we can begin to focus on what really matters: how school choice programs affect the lives of the families and children who use them.