School Choice Could Help States Deal with their Cash Shortages

Published January 29, 2011

Empowering parents to choose the best school for their children — whether public or private, regardless of ZIP Code — isn’t just the right thing to do. With states struggling to overcome yawning budget deficits, school choice makes good fiscal sense.

Governors and state legislatures across the nation are facing a grim financial reality: More than $100 billion in federal education stimulus money is gone. Another bailout isn’t forthcoming, and voters have no great appetite for additional tax hikes. After years of pumping up school spending, real cuts are coming. In fact, they’re overdue.

With resources tight, the smarter lawmakers and governors are proposing some ambitious reforms. These include establishing new teacher evaluation rules and ending the practice of “last hired, first fired” that punishes younger teachers and protects time-servers; removing expensive class-size mandates; and renegotiating “Cadillac” pension plans.

Excellent ideas all. But states such as Florida, Indiana, New Jersey, Ohio, and Pennsylvania are also considering legislation to establish or expand opportunity scholarship programs currently offering low-income parents or parents with disabled children the means to send their children to the school of their choice instead of one determined by their residence.

Opponents argue tax credit scholarship programs are expensive, deprive traditional public schools of resources, and use taxpayer dollars to enrich private or even religious enterprises. Despite these claims, the programs have expanded slowly but steadily, successfully raising academic achievement where they’ve been tried in 14 states and the District of Columbia.

In addition, study after study shows school choice saves money. The Foundation for Educational Choice estimated the 12 voucher and tuition tax credit programs operating before the 2006-07 school year produced a 15-year cost savings of $444 million.

According to the same study, Pennsylvania’s tax credit program had saved Keystone State residents $144 million since 2001. Florida’s trailblazing McKay Scholarship Program for disabled children saved taxpayers $139 million in its first seven years. Another study by University of Arkansas economist Robert M. Costrell concluded Milwaukee’s Parental Choice Program has saved Wisconsin taxpayers money every year since 2000, with estimated savings reaching $31.9 million in 2008.

Far from depriving states of limited resources, choice makes more money available for other uses.

As for enriching private schools, it’s worth noting the vast disparity in per-pupil spending between public and private schools. Whereas New York or New Jersey spends upwards of $20,000 or more per pupil per year, and Washington, D.C. spends more than $25,000 per pupil each year, the average annual private school tuition is just $8,500, according to the National Center for Education Statistics.

A robust system of school choice, in which funding followed students and wasn’t filtered through a clogged sieve of bureaucracy, would provide further benefits. Traditional public schools currently operating as de facto monopolies would be forced to compete for students. Schools that consistently failed to persuade enough parents to trust them with their children would no longer be guaranteed funding from the state.

When businesses compete for customers on an even playing field, people get better value, businesses prosper, and the economy grows. Opponents of school choice often argue public education is somehow different and shouldn’t be subject to “the whims and caprices of the market.” But the truth is the current system has failed to do its job of creating knowledgeable, self-governing citizens. It’s time to allow choice.

State and federal laws already provide an option for officials to shut down failing schools and allow parents to send their children to higher-performing public schools nearby. The next short, logical step is to give parents the means to choose a higher-performing (and typically more cost-effective) private school if they want.

This would have the additional value of empowering parents. After all, nobody is more likely to understand their children’s individual needs and concerns, and parents have much stronger incentives to choose the right school for their children than a government bureaucrat.

All these reasons — fiscal sanity, taxpayer savings, competition, and parental empowerment — suggest the time is right to embrace school choice.

Ben Boychuk is managing editor of The Heartland Institute’s School Reform News. E-mail him at [email protected].