Policy Documents

Policy Tip Sheet No. 7 - Texas Taxpayers’ Savings Grants

May 25, 2011

Texans face the daunting challenge of balancing the state’s biannual budget. The Republican-controlled legislature and Gov. Rick Perry have vowed not to increase taxes, seeking instead to control spending. With education representing a significant share of the state’s spending, it is estimated public school budgets will need to be cut by more than $4 billion.

According to The Heartland Institute’s 2010 State School Report Card, Texas public schools are mediocre at best. The state ranked 30th in academic achievement, 31 in efficiency, and 30 overall. Per-pupil spending is at an all-time high, growing almost 65 percent from 1999 to 2009. That growth is more than twice what could be accounted for by inflation.

With a special session looming to deal with the state’s budget, the legislature must look at new approaches to contain rising spending without sacrificing student achievement.

Policy Solution

The Taxpayers’ Savings Grants proposal is an innovative way to use empirically tested and parent-empowering reforms to help balance the state’s budget. The program gives grants of up to 60 percent of current state per-pupil spending on maintenance and operations to parents who move their children from public to private schools, saving the state approximately $3,500 each time a child is moved.

Approximately 350,000 students are likely to participate in the program in its first two years, saving the state about $2 billion during the next biennium. Per-pupil spending would increase by approximately $473 for students who remain in public schools.

Ultimately, this program would save taxpayers $2 billion while benefitting students and teachers.

Policy Messages

Point 1. The TSG program allows parents of children attending public schools to help the state save $2 billion during the coming biennium.

Point 2. Participation in the program by both parents and schools is entirely voluntary.

Point 3. Students already enrolled in private schools would not be eligible to participate in the program.

Point 4. Parents benefit by being able to choose the schools their children attend. Surveys show that parents want this kind of choice.

Point 5. Students benefit because programs that empower parents lead to increase academic achievement.

Point 6. Teachers benefit from higher compensation, due to schools competing to hire them, and better work conditions.

Policy Facts

Fact  1. Texans spend more than $11,500 per child on public education, while many private schools spend a fraction of that and do just as well, if not better.

Fact  2. The average Taxpayers Savings Grant under this program would be $5,143.

Fact  3. Economist John Merrifield estimates school choice in Texas would increase teachers’ compensation by $2,173 to as much as $12,000.

Fact  4. The TSG  program will increase per-pupil spending for public schools by $473, increasing Texas’ national per-pupil spending rank by three to eight positions.