Study: Choice Doesn’t Threaten Public School Finances

Published April 4, 2012

School choice programs don’t threaten public school budgets, according to a new study by the Friedman Foundation for Educational Choice.

A popular argument against school choice programs is allowing children to leave public schools leaves the school with fewer resources to pay fixed costs, notes study author  Benjamin Scafidi, an associate professor at Georgia College & State University.

“They’re saying that all costs of running a public school are fixed costs,” Scafidi said. “If that’s true, taxpayers should not give them any extra money when they get additional students. But of course the public education establishment doesn’t believe that.”

Scafidi analyzed public schools’ short-term variable and fixed costs. Fixed costs are overhead like buildings and heating bills. Variable costs such as books and staff can be trimmed more quickly. In the long run, he said, all costs are variable.

Most Costs Variable
His findings show U.S. average per-pupil public school spending is $12,450 per year. Over one year, he said, 36 percent of that amount is a fixed cost and 64 percent is variable.

If a student leaves, any dollar above the fixed cost of that student’s education is profit for the public school. In most choice programs, far less than 100 percent of per-pupil costs follow the child.

“In no other business in America do you get to keep money for customers you no longer serve,” Scafidi said. “Public education is the only enterprise in America that gets paid for customers they no longer serve.” 

Focused and Productive
Research also shows school choice fosters improved academic achievement in public schools.

“The empirical studies consistently find school choice programs improve outcomes both for participants and public schools,” said Greg Forster, a Friedman Foundation senior fellow.

School choice gives participants the opportunity to “find the right school to meet their needs,” and helps public schools by creating “healthy incentives to keep them mission-focused and productive,” he said.

Once a school choice program has been in place for a few years and surrounding public schools have adjusted enrollment, school choice programs can be expanded and given more equal funds, Scafidi said.

“In the long run, I would allow all money to follow the child,” he said.


Learn more:
“The Fiscal Effects of School Choice Programs on Public School Districts,” Friedman Foundation for Educational Choice, February 2012:

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