School Vouchers Make a Great Recession-era Program

Barring a sudden economic U-turn, last year’s stimulus and this year’s additional $10 billion education bail-out will only delay painful state budget cuts. A huge portion of most state budgets go to public schools, making them an obvious place for cash-strapped legislatures to turn for savings.

Schools across the nation are already cutting services and teachers despite the influx of stimulus dollars, and in most cases kids are worse off for it. But Florida’s experience over the last decade has shown that there is one budget area that schools can cut to both save money and improve educational services: students. These tight fiscal times provide just one more reason for state legislatures to embrace school choice.

Started under the governorship of Jeb Bush, Florida’s Corporate Tax-Credit Scholarship Program has paid for students to attend secular and parochial private schools since 2001. As its name suggests, the program is funded by corporate donations for which companies receive a dollar-for-dollar tax credit.

To be eligible for a voucher a student must come from a family with an income low enough to qualify for free- or reduced-price lunch. Last year, nearly 29,000 students across the state used a voucher from this program to attend a private school. That number is sure to increase now that the state legislature has significantly lifted the cap on the program’s enrollment.

Most state legislatures aren’t in the mood to consider programs that siphon-off corporate tax revenues. But corporate tax-credit voucher programs reduce state public school expenditures by far more than they cut tax receipts.

Each voucher offered under Florida’s tax-credit program is worth $3,950. In comparison, taxpayers pay a total of $11,077 to educate the average student in a Florida public school. The voucher is worth only 77 percent of what public schools spend on instructional services alone.

The cost savings from vouchers are quite real. According to the Florida’s Office of Program Analysis and Government Accountability—the state equivalent to the federal Office of Management and Budget—each dollar foregone in corporate tax revenues due to the program saves the state about $1.49 in public school expenditures. Overall, the program saved Florida’s taxpayers an estimated $36.2 million during the 2008-09 school year.

Now that the cap has been raised, those savings will surely grow. Only about 2 percent of eligible students in the state used a voucher last year.

Unlike other cost-saving measures, voucher programs don’t eliminate services or force citizens into unwanted new arrangements. Vouchers address the truly perverse arrangement whereby states force taxpayers to cough up multimillion dollar premiums in order to keep kids from low-income families enrolled in public schools that they’d rather not attend.

Whether or not food stamps make good policy, no current user of that program would choose to exit it. But there are many thousands (perhaps millions) of parents who yearn to send their child to a private school but can’t afford the tuition.

Parents are under no obligation to take the voucher. They can continue to send their kids to the local public school if they wish.

For parents, it’s not important how much a school spends but how well it teaches their children. Many families opt to take the vouchers because they are fed up with ineffective, expensive public schools.

According to a recent evaluation of the program by Northwestern University economist David Figlio—who, it should be noted, is one of the few researchers whose reputation is unchallenged by either side of the education policy debate—students participating in Florida’s tax-credit scholarship program are more likely to come from the state’s lowest performing public schools and tend to be among the lowest performers within their school.

Vouchers are one of the precious few policies that not only save money but also improve learning outcomes. According to Figlio’s study, students who use one of Florida’s tax-credit vouchers do slightly better in math than their peers in public school.

In addition, consistent with other research, Figlio found that competition from the voucher program actually produced improvements in public schools. That is, Florida’s tax-credit scholarship program has helped all of the state’s students, even those who opt not to use a voucher to attend a private school.

There is no avoiding the fact that most state budget cuts will leave citizens worse off than before. In public education, however, there are still major efficiencies to be found. Voucher programs both help kids and save money. In these tight fiscal times, vouchers don’t just make good policy, they make good sense.

This piece originally appeared in Washington Examiner

This piece originally appeared in Washington Examiner