School Choice Can Help States Meet Budget Challenges

Washington Gov. Gary Locke’s response to President Bush’s State of the Union address highlighted state budget woes.

Washington and other states are facing the “worst budget crises since World War II,” Locke said, and are being forced to “cut vital services from police to fire to health care.”

However, reforms in one area of state spending could both save money and improve services. That area is education.

Since public education accounts for the largest category of state spending in every state, governors should look for ways to optimize education spending. One way to do that is to give parents a free choice of public or private schools. Since private schools cost less than average per pupil spending in government-run schools, states would save money.

According to the National Center on Education Statistics, per pupil spending in private schools is around $4,600.  Washington State per pupil spending is currently $6,100. So, giving parents a voucher of $4,600 for each child who switches to a private school would save the state $1,500 per child.  Washington State has nearly one million elementary and secondary students, so they would save one and a half billion of the state’s $13 billion education budget.

Some states have already started to move in this direction, reducing class sizes and saving on their education budgets. Florida, which allows children with disabilities to attend private or public schools, will save nearly $8 million dollars this year because of students attending less expensive private schools. With participation in the program doubling each year, the savings will continue to grow.

Because of the recently adopted constitutional mandate to reduce class sizes in Florida, lawmakers there are considering expanding tuition vouchers and tax credits as a way to reduce the enrollment and budget burden on the state’s elementary and secondary schools.  The number of private schools in Florida has grown from 1,785 in May 2000 to 2,138 this year, demonstrating that new private schools open as demand increases.

Arizona gives tax breaks to residents who contribute to private school scholarship funds.  Since the program began five years ago, more than 19,000 students have received scholarships to attend private schools. If the program continues to grow at current rates, by 2015 the scholarship credit will fund 35,000 to 65,000 scholarships every year, saving taxpayers as much as $100 million annually.

States could also save money by expanding dramatically the number of charter schools.  Charter schools are public schools that operate free from the regulations and requirements of the local public school district. According to a recent survey of the nation’s charter schools, the average per pupil cost is $4,507, significantly less than the $7,000 average in traditional schools, and charters are forced to use that money to underwrite facilities costs not included in traditional public schools' operating budgets.

Parental demand for charter schools is growing. "On a dollar-for-dollar basis, successful charter schools are outperforming their traditional public school brethren and doing more for students, and that performance is why parental demand is increasing," said Jeanne Allen, director of the Center for Education Reform, which conducted the survey.

An even more radical approach would be to allow communities to opt out of the public school system altogether and just let private schools take care of educating children. The idea isn’t so unrealistic as you might think. Maine and Vermont have allowed communities to utilize private schools exclusively for decades. Some of those communities have never even built a public school. In 1995, the citizens of Arrowsic, Maine voted down an attempt to build a public school. Arrowsic preferred the freedom of being able to select among various private schools.

In Vermont, 17 towns either have no public school or have a school too small to accommodate all local students, and 95 towns have no public high school. Rather than building their own public schools, the state and town combine funds to pay tuition for students at local private schools. Families choose from more than 83 independent schools or utilize public schools in surrounding towns. In 1998, the town of Winhall voted to close its public school and become a “tuition town,” sending its students instead to two local private schools.

Tuition vouchers, tuition-tax credits, charter schools, and even total privatization are all viable solutions to the states’ budget crises. Rather than cutting basic services and raising taxes, governors like Gary Locke should implement school choice programs to save money and improve education.

David Salisbury is director of the Center for Educational Freedom at the   Cato Institute.