Policy Documents

Texas Taxpayers’ Savings Grants: Q&A No. 4 - Taking the Best Kids

Marc Oestreich –
August 24, 2012

Taxpayer Savings Grant Program
Questions and Answers

by Marc Oestreich and Joseph L. Bast
The Heartland Institute
Last Updated: August 2012

Q4: Would the TSGP take the “best kids” out of public schools?

Answer in brief: No. The Taxpayer Savings Grant Program (TSGP) would appeal mostly to students who are struggling in their current public schools and help reduce the segregation by race and income levels that results from assignment of students according to their parents’ ZIP codes.

The longer answer: Experience with other school choice programs shows choice schools draw disproportionately from students who are struggling in their current public schools. Students attending public schools would benefit from higher per-pupil spending levels due to the savings generated by the TSGP, even if the state chooses to “keep” its share of the savings. Choice programs help reduce the de facto segregation of the public school system caused by assigning students to schools based on their parents’ ZIP codes.

 

Background and Analysis

1. TSGP would allow approximately 350,000 students to move from public schools to private schools chosen by their parents.

The version of the Taxpayer Savings Grant Program (TSGP) introduced in 2011 as HB33 read,

Any parent or legal guardian of a school-age child who resides in Texas and is entering kindergarten or attended a public school for all of the academic year prior to their participation in this program ... may receive reimbursement from the state for tuition paid for enrollment of said child at a private school in the amount of actual tuition or sixty percent of the state average per-pupil maintenance and operations expenditure, whichever is less....

State average per-pupil maintenance and operations (M&O) expenditure, according to the Legislative Budget Board, was $8,801 in 2011. The savings grant would be a maximum of 60 percent of that amount, or $5,280. 

Based on a review of the academic literature and the experience of two somewhat comparable school choice programs, The Heartland Institute estimates that approximately 350,000 students would use savings grants to enroll in private schools in the second year of the program.

The experiences of other school choice programs operating around the country allows us to make some predictions about the kinds of students whose parents would take advantage of the program.

2. TSGP would attract disproportionately those students who are struggling in their current public schools.

Opponents of school choice have long suggested that choice programs benefit the most talented students or those students with the most highly motivated parents. Besides showing a lack of confidence in public schools, many of which produce a high-quality education for their students, this argument is flawed empirically.

Hanushek, Rivkin and Kain studied the academic achievement records of public school students who left for charter schools compared to those who stayed. The students who left were scoring .14 standard deviations lower than average on standardized tests in reading and .30 standard deviations lower in math. 

Similarly, Harvard University Prof. Caroline Hoxby examined annual gains in standardized test scores and found that students most likely to participate in choice schools were typically reporting below-average gains during their public schools careers. As Hoxby summarizes, “if anything, choice schools are disproportionately drawing students who are generally considered to be less desirable or who are already experiencing achievement problems.”

3. TSGP would increase student achievement in public schools.

Since a fairly representative mix of students would flow out of public schools into private schools, those “left behind” wouldn’t be any more difficult to teach than the current population of students. In fact, based on the data reported above, students left in public schools would probably be higher achievers and on more upward trajectories than average.

The TSGP would require public schools to compete with private schools for students and teachers. This would have a positive effect on public schools, just as competition spurs higher achievement in everything from amateur and professional athletics to car companies. The Foundation for Educational Choice’s Greg Forster recently found that “18 [of the 19 studies done to date] find that vouchers improved public schools and one finds no visible impact.” “No empirical studies find that vouchers harm public schools,” he writes.

4.  TSGP would increase per-pupil spending by public schools.

Several provisions in the TSGP would ensure that per-pupil spending by public schools would increase. Only students who are entering kindergarten or who were enrolled in a public school for at least one year before entering the program would be eligible for grants. This means there would be no one-time or up-front cost for covering the cost of tuition for students currently attending private schools.

Second, because the maximum TSGP grants would equal only 60 percent of the state’s average spending on management and operations (M&O), public spending on students attending would be much less than current per-pupil average. If all the savings of the program were “recycled” or returned to the public school system, per-pupil spending by public schools would increase by approximately $473. If the state uses its savings to fund services other than education, per-pupil spending would still rise by $208.

5. TSGP would reduce the de facto segregation caused by assigning students to schools based on their parents’ ZIP codes.

Many opponents of school choice fear that such programs will allow for voluntary or involuntary sorting based on race or income. Vouchers have an unfortunate history in the South that is sometimes invoked to support this fear. But modern voucher programs spring from much different motivations, and they have much different effects.

Caroline Hoxby has examined “odds ratios” for different student characteristics between voucher-takers and public school students and found the likelihood of a voucher-taker being white was less than the likelihood a public school student being white. In other words, blacks, Hispanics, and Native Americans were all slightly over-represented in voucher programs.

We believe the situation would be the same in Texas with the TSGP. There is tremendous pent-up demand for school choice among black and Hispanic populations in Texas. Religious schools that might be attractive to these populations are severely resource-constrained and cannot expand to meet the demand. Low-income black and Hispanic families cannot afford the tuition that these schools currently charge.

Meanwhile, many middle- and upper-income white families have either made their choice to enroll their children in private schools – and to pay twice, once with their taxes for public schools they choose not to use, and again with tuition payments to the private schools they choose – or to move to communities with high-quality public schools. Children already attending private schools would not be eligible for the TSGP, and those attending high-quality public schools are much less likely to use the TSGP to move to private schools.

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Sources

All of the following sources are available online at www.heartland.org/ideas/taxpayer-savings-grants:

John Merrifield and Joseph L. Bast, “Budget Impact of the Texas Taxpayers’ Savings Grant Program,” Policy Brief, E.G. West Institute for Effective Schooling and The Heartland Institute, April 2011.

Joseph L. Bast, “Corrections to Fiscal Note for Taxpayers’ Savings Grants Programs,” Policy Brief, The Heartland Institute, June 8, 2011.

Joseph L. Bast, “Making Texas Public Education More Efficient: Taxpayer Savings Grant Program,” Testimony to the Texas Senate Committee on Education, August 24, 2012.

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For more information, contact Joseph Bast, Joy Pullmann, or John Nothdurft, The Heartland Is Institute, at 312/377-4000 or by email at jbast@heartland.org, jpullmann@heartland.org, or jnothdurft@heartland.org.