• Commentary

Time for Change: School Choice Will Have a Positive Fiscal Impact




Commentary 

By Kelly McCutchen

Georgia’s revenue numbers are going from bad to worse, and education is one of the areas facing challenges. These trying times could provide parents of the state’s K-12 students with the opportunity to finally join the parents of college students, pre-k and special needs students able to use their tax money to choose a school that best serves their children while ensuring more funds are available for education.   

Senator Eric Johnson (R-Savannah) has unveiled a plan that would allow parents to use a scholarship to send their child to the public or private school of their choice. Yet within minutes of Johnson’s Groundhog Day announcement, it was like “Groundhog Day” the movie, with the naysayers repeating their predictions. Critics claimed his legislation would “take money from underfunded public schools.”  

An analysis of this proposal by the Georgia Public Policy Foundation, however, shows that revenues per student would in fact increase by about $900 per student – 10.3 percent – if a large number of students left public schools for a school that their parents believe better serves their child.  

How does that happen? If a child moves to a private school, only state funding follows that child. Local tax revenues, which account for more than 40 percent of school funding on average, are not affected. As a result, funds available for the students still in that school system are increased because the funding that would have been spent on the students who are no longer there can be spread out among the students who remain. Put differently, local school systems will still get paid for students they do not teach. And, with the state likely to see more fiscal belt-tightening, those funds are critical. Information on the increase in funds available for all school systems in Georgia can be found at www.gppf.org/pub/system_savings.pdf.

The first question to answer is how many students would choose another school. Experience suggests there will not be a mass exodus from public schools, as some doomsayers predict. In Milwaukee, where school choice has been in place for almost 20 years, about 20 percent of the students enrolled in the public school system have chosen to move to a private school. In Sweden, which implemented a universal school choice program in 1992, the increase in private school attendance has been only about 11 percentage points despite a voucher that covers the full cost of tuition.

Suppose critics of the Georgia plan are correct in their prediction that large numbers of students will leave public schools. In an analysis of the impact of this plan on the finances of local school systems, the Georgia Public Policy Foundation assumes that 20 percent of the children choose a private school. Under this extreme scenario, what would happen to the finances of a local school system?

The result would be that every school system in Georgia would have more money available to spend on students who remain in public schools, because local public schools would be getting paid for students they no longer serve. Under this scenario, funds available to local public schools would increase by about $900 per student. That amounts to $18,000 for every classroom of 20 students. Statewide, the children remaining in local school systems would keep more than $1 billion. 

Should local school boards get to keep all this money? How about this for a grand bargain:

  • Parents who feel there is a better alternative for their child in a public or private school may choose the better alternative.
  • Public schools increase their spending per student by $450, which is $9,000 per classroom of 20 students.
  • Local school boards cut property taxes by $450 per student.

Everybody wins, except the status quo.  

Policy-makers often need reminders that education is fundamentally about children – children with unique needs, interests and personalities. It’s not about good schools or bad schools. It’s about finding the right setting, the right programs, the right expectations, the right discipline or the right teacher to unlock the potential in every child. A top-down policy cannot anticipate the needs of every child. The facts are clear. The financial impact of providing parents with choice is to leave more money per child in public schools. The potential impact on each child’s future is priceless.


Kelly McCutchen is executive vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (February 6, 2009). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.

Commentary 

By Kelly McCutchen

Georgia’s revenue numbers are going from bad to worse, and education is one of the areas facing challenges. These trying times could provide parents of the state’s K-12 students with the opportunity to finally join the parents of college students, pre-k and special needs students able to use their tax money to choose a school that best serves their children while ensuring more funds are available for education.   

Senator Eric Johnson (R-Savannah) has unveiled a plan that would allow parents to use a scholarship to send their child to the public or private school of their choice. Yet within minutes of Johnson’s Groundhog Day announcement, it was like “Groundhog Day” the movie, with the naysayers repeating their predictions. Critics claimed his legislation would “take money from underfunded public schools.”  

An analysis of this proposal by the Georgia Public Policy Foundation, however, shows that revenues per student would in fact increase by about $900 per student – 10.3 percent – if a large number of students left public schools for a school that their parents believe better serves their child.  

How does that happen? If a child moves to a private school, only state funding follows that child. Local tax revenues, which account for more than 40 percent of school funding on average, are not affected. As a result, funds available for the students still in that school system are increased because the funding that would have been spent on the students who are no longer there can be spread out among the students who remain. Put differently, local school systems will still get paid for students they do not teach. And, with the state likely to see more fiscal belt-tightening, those funds are critical. Information on the increase in funds available for all school systems in Georgia can be found at www.gppf.org/pub/system_savings.pdf.

The first question to answer is how many students would choose another school. Experience suggests there will not be a mass exodus from public schools, as some doomsayers predict. In Milwaukee, where school choice has been in place for almost 20 years, about 20 percent of the students enrolled in the public school system have chosen to move to a private school. In Sweden, which implemented a universal school choice program in 1992, the increase in private school attendance has been only about 11 percentage points despite a voucher that covers the full cost of tuition.

Suppose critics of the Georgia plan are correct in their prediction that large numbers of students will leave public schools. In an analysis of the impact of this plan on the finances of local school systems, the Georgia Public Policy Foundation assumes that 20 percent of the children choose a private school. Under this extreme scenario, what would happen to the finances of a local school system?

The result would be that every school system in Georgia would have more money available to spend on students who remain in public schools, because local public schools would be getting paid for students they no longer serve. Under this scenario, funds available to local public schools would increase by about $900 per student. That amounts to $18,000 for every classroom of 20 students. Statewide, the children remaining in local school systems would keep more than $1 billion. 

Should local school boards get to keep all this money? How about this for a grand bargain:

  • Parents who feel there is a better alternative for their child in a public or private school may choose the better alternative.
  • Public schools increase their spending per student by $450, which is $9,000 per classroom of 20 students.
  • Local school boards cut property taxes by $450 per student.

Everybody wins, except the status quo.  

Policy-makers often need reminders that education is fundamentally about children – children with unique needs, interests and personalities. It’s not about good schools or bad schools. It’s about finding the right setting, the right programs, the right expectations, the right discipline or the right teacher to unlock the potential in every child. A top-down policy cannot anticipate the needs of every child. The facts are clear. The financial impact of providing parents with choice is to leave more money per child in public schools. The potential impact on each child’s future is priceless.


Kelly McCutchen is executive vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (February 6, 2009). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.