Policy Documents

Projected Texas Vouchers Savings Increase $200,000

Joy Pullmann –
June 9, 2011

A new analysis on a proposed statewide voucher system in Texas increases the earlier estimate for state savings to $2.26 billion, in sharp contrast to the bill’s fiscal analysis from the legislature, which puts the savings at $195 million.

Because of the sharp difference between the legislative fiscal note and an independent analysis from the Heartland Institute, HB 33 sponsor Rep. Sid Miller (R-Stephenville) said he plans to request a new fiscal note for the bill before it gets voted forward from the Government Reform Committee.

“The bill is meant to give parents school choice, but also to have a savings we can funnel back into our education system,” Miller told School Reform News Wednesday.

If passed, the bill would be the broadest voucher program in the country.

The Texas legislature is currently in special session to address a $4 billion hole in education funds for this fall’s biennial budget. In legislative testimony this week, several superintendents and district administrators suggested the state dig money from its “rainy day education fund” rather than cut funds.

 “Dipping into the state reserves is a great short-term solution, but it’s terrible for the long term,” Miller said. “The rainy day fund was never meant to balance the budget on the front end, but be a reserve. It’d be financially irresponsible to go in and spend all your savings at the front of the month knowing you wouldn’t have enough to pay them at the end of the biennium.”

Differences Between the Estimates
The Texas Legislative Budget Board estimated that 0.5 percent of Texas students, or 22,545 students, would take advantage of the vouchers—available to any public school student—in the first year of the program, and about 1 percent of the state’s students thereafter.

Compared to both the best available research and other voucher programs around the country, says the Heartland Institute’s policy brief, that figure is a severe underestimate. Both indicate the correct number is about 6 percent, or 274,518 students initially and rising each following year.

Saving State Money
The more students who use the vouchers, the more the state saves by spending less on their educations.

The proposed vouchers would be worth 60 percent of average state funding per student or the cost of private tuition, whichever is lower. Since the Budget Board provided new information that the state’s cost to educate a pupil is higher than originally estimated, the voucher’s peak now sits at $5,281 and raises the estimate for state savings from the program from $2 billion to $2.26 billion over two years.

The plan would also send about $250 per student back to local districts to stanch cuts.

The bill is in committee now under government reform, awaiting a revised legislative fiscal note and a few alterations to clinch the projected costs and revenues. It is likely to receive a vote in that committee on Thursday, then head to the calendars committee to schedule a floor vote of the state House by the middle of next week.

With Republican control of the House and state Senate, Miller said he thinks it likely the bill can pass both and head to Gov. Rick Perry (R) by the end of the special session in early July.

Joy Pullmann (jpullmann@heartland.org) is managing editor of School Reform News.