But diverting public funds away from public K–12 schools and toward private schools does not guarantee educational opportunities will be expanded for all students—and this is especially true in rural communities. Most obviously, because students in rural communities often don’t have a private school option and therefore cannot use the vouchers, state voucher programs—which are financed by all the taxpayers in a state—amount to an education subsidy for wealthy urban families at the expense of strong public schools. Moreover, for rural areas that can support multiple school systems, voucher programs introduce a potentially large cost for the students that remain in public schools, as any sharp drop in public school enrollment will raise the fixed cost per pupil of running schools. For example, school facilities and staff that are efficient for 1,000 students in a school may no longer be efficient if enrollment were to drop to 800 or 900.

Voucher programs work like this: Parents who wish to send their kid to private school can receive public funding to cover part of the tuition or education-related expenses, rather than paying out of pocket. In states with vouchers programs, this added cost to government of paying for private educational expenses makes a big dent in state budgets—see examples here, here, and here. These programs also often entail fraud and abuse of funds and strip away funding for public schools. As a share of K–12 budgets, voucher spending accounted for as much as 26% in 2025, squeezing public schools of sorely needed funds. Moreover, recent reports have documented accounts of voucher funding getting used for high-end concert tickets and rideshare apps like Uber and Lyft. For wealthy parents in urban districts who were already planning to send their kids to private school, these slippery regulations and extra funding for education expenses are a feature, not a bug, of voucher programs. Vouchers are disproportionately taken up by students already attending private school, compared with those who consider a private school option when voucher laws get passed in their state.

For students in rural areas with no private school option, voucher programs simply mean there is less to spend on public schools, which leads to teacher shortages, fewer educational opportunities, and worse building maintenance. In rural communities with homeschooling or private school options, voucher programs impose an added cost to public education when students transition from public to private school.

We call this cost the fiscal externality of voucher programs, and it is borne by school districts, students, and their families when voucher-driven declines in student enrollment intersect with the fixed nature of many school costs. In rural districts, many key education costs—such as interest on bonds issued in the past, heating, electricity for school buildings, bus drivers, and even some staff—cannot easily adjust to student enrollment declines.

While public schools’ fixed costs do not decline when they lose students to voucher programs, their revenue does. Thus, when students in rural areas take up vouchers to leave public school for private school or homeschool, public schools have less revenue to cover the same level of fixed costs. The costs that can be adjusted—such as supplies or certain personnel—will get forced down due to shrinking school budgets. These variable costs are crucial for effectively educating children, meaning students who remain in public schools will pay the price of voucher program takeup.

This fiscal externality therefore leaves districts unable to deliver the same level of instruction to the remaining public school pupils. When students leave public schools in rural areas with voucher programs, there are fewer resources available on a daily basis to educate kids—fewer teachers and other staff members and fewer curriculum and education supplies. Education quality suffers.

How large is the fiscal externality that voucher programs impose on public schools in rural districts? Take the McComb Local School District in Ohio, which had 627 students in 2022 and is classified as a rural district according to the U.S. Census. Using EPI’s Fiscal Externality Calculator, we estimate that a 5% decline in enrollment would lead to an increased cost of $520 per pupil for the remaining students in the district, or a total of $309,530.

The key assumption is that there is some fraction of schools’ costs that is fixed and can’t be adjusted in the near term when enrollment falls. We assume that instruction and services costs (the cost of teachers and services like transportation, counseling, nurses, and school administrators) can only partially adjust to changes in enrollment. Specifically, we assume that when enrollment declines, instruction costs are only able to adjust by 50% of the enrollment decline, and service costs are only able to adjust by 20%. We assume that capital and building and maintenance costs can’t be adjusted at all. (Users can set their own adjustment rates for their school districts using the fiscal externality calculator here. The method behind this calculation is detailed in our report.)

Under these assumptions, aggregating all the rural Ohio districts using the rural categorization of school districts from the National Center for Education Statistics, a voucher-driven 5% enrollment decline would impose a fiscal externality of just over $206 million on Ohio public schools.

Rural districts have the most to lose when states enact voucher programs. For rural communities, vouchers are not a cost-free policy that simply expands education options for children—they are a subsidy for wealthy urban and suburban families at the expense of strong public schools. Voucher programs also introduce a large potential cost for the students that remain in rural public schools. The public spending declines associated with the introduction of vouchers will reliably cause significantly worse educational outcomes at a time when states should be spending more—not less—on public schools. States that promote voucher programs at the expense of funding for strong public education are signaling that rural students are not a priority. 

All children deserve to attend welcoming and well-funded schools where they can learn and grow, regardless of race, disability, or income. But funding for public schools, where nearly 90% of all U.S. students learn, is at a near crisis point. The Trump administration’s goals, which are taken right out of Project 2025, seem to be to defund public education to the point that it doesn’t work, then offer private school vouchers as a solution to a manufactured problem. In this post, we highlight five ways public education is on fire in the United States and the damage this will do to students’ abilities to learn and thrive. Instead of cutting funds, lawmakers should invest in public schools, one of the best tools we still have to build a prosperous, equitable country.

Alarm level 1: COVID-19 relief funding for public schools is winding down. In some cases, the administration is ending it prematurely

This academic year (2024–2025) marks the end of the financial support schools were receiving to address the impacts of the COVID-19 crisis, the Elementary and Secondary Schools Emergency Relief III funds (ESSER III). The COVID-19 pandemic, and the changing learning environments that ensued, meant that schools needed funds to address the significant academic, social, emotional, physical, and mental health needs of their students. This funding was distributed in recent years with the last distribution, ESSER III, worth a total of $122 billion allocated to districts around the country. Many students, especially those living in poverty, have not recovered from pandemic-related learning loss. The end of this funding means that districts will now have fewer resources to help students get back on track. Rigorous research has demonstrated that this federal aid to public schools was highly successful, with measurable improvements to student outcomes in states and districts where more aid was spent. Taking the educational challenges imposed by the pandemic seriously would mean recognizing the high value this aid has provided.

However, in late March, the Trump administration canceled extensions that had been granted to states to spend remaining ESSER funds. Effectively, districts are losing out on the funding allocated to them in the form of COVID-19 relief funds. Canceled extensions represent almost $3 billion in lost funding that had already been committed to tutoring services, reading interventions, building improvements, and more. Clawing back these funds jeopardizes improved academic outcomes for many students and their ability to learn in healthy and safe environments. The administration’s refusal to reimburse school districts for funding that has already been spent could force them to cut teaching and other staff positions to make up the cost, ultimately harming students.

Alarm level 2: The administration is lawlessly dismantling the Department of Education and attacking inclusive schools

The winding down and clawing back of ESSER funding are simultaneously occurring at a time when President Trump signed executive orders to (1) dismantle the Department of Education and “return the funding to the states” and (2) regulate curriculum taught in the more than 13,000 public schools in the country.

One order directed Secretary of Education Linda McMahon to shut down several functions of the Department of Education (ED) and send them back to the states. Prior to this order, the White House had directed the ED to lay off 1,300 employees, a directive that is currently in litigation. The other order resulted in a “Dear Colleague letter” from Secretary McMahon demanding that states certify that they will not engage in “illegal DEI practices” as a condition of receiving the federal funds (This order is also currently in litigation.). As it stands, much of the Department of Education funding goes directly to state and local school systems. The ED provides targeted funding to public schools for special education through the Individuals with Disabilities Education Act and supports high-poverty districts through Title I grants. These grants make up for shortfalls in funding that high-poverty districts experience when they get funding from local sources.

To be clear, closing the Department of Education, and reappropriating major funding programs requires an act of Congress, and it is local school districts who have control over what is taught in schools—not federal regulators. Thus, while these executive orders have the potential to inflict a lot of damage, it’s unclear whether these orders can proceed without running afoul of federal laws. If these orders result in delays in funding distributions or outright cuts, students could experience declines in academic achievement, exacerbating existing racial and income disparities and limiting students’ long-term opportunities. If President Trump acts outside of his authority to slash the agencies’ work, the guardrails will essentially be pulled off this funding, which is extremely effective at redistributing funds based on district need. President Trump says he’ll return money to states for them to distribute it, potentially creating a situation where states have to compete for funds. This would create a patchwork in public funding for public schools, one in which some districts risk falling even further behind.

Alarm level 3: Lawmakers are pushing a mounting wave of voucher programs, an increasingly large cost to state-funded education

While many school districts struggle to maintain basic education funding, school privatization efforts are continuing throughout the country, and states like Arizona, Florida, and Ohio are notorious for the budget-breaking cost of universal voucher programs.

Figure A shows the current cost of voucher programs as a share of K–12 education funding in states where over 5% of the budget is currently going to school voucher programs. In the current school year (fiscal year 2025), voucher costs make up anywhere from 5% for states with early voucher programs to upwards of 25% of the entire public education budget for states with mature programs.

Figure A

Because statewide private school voucher programs are funded with state dollars, voucher spending is shown as a proportion of state education funding rather than state and local funding. On average, about 46% of funding for K–12 schools comes from state revenue sources. In states with voucher programs, private schools divert state dollars that could otherwise be available to public schools. For now, local funding for public schools is protected from diversion to voucher programs, although some states with voucher programs are also threatening this source of public school funding by cutting or eliminating property taxes.

Vouchers degrade the quality of education for students who use them

Time and time again research has shown that vouchers harm academic outcomes. Causal studies across three states and Washington, D.C., demonstrate negative effects on test scores for students who use a voucher to switch from public to private school. These test score declines can persist over two years or more and are comparable or worse than declines due to COVID-19 and Hurricane Katrina. Meanwhile, students who leave private schools and return to public schools have experienced increased academic achievement. While some may argue that test scores from the National Assessment of Educational Progress indicate that private school students fare better academically than their public school peers, this is more a reflection of the parents’ socioeconomic status and education level than the impact of private schooling on students. Research also suggests vouchers do not reliably improve high school graduation and college attendance rates. Because of these reasons, lawmakers looking to improve student outcomes should not pursue vouchers.

School vouchers have costs for students who remain in public school

In addition to the direct costs that the state incurs for school vouchers, school districts experience an additional cost when they lose students to private school: the cost of providing the same level of education for fewer students in public education. This cost is entirely borne by the students who remain in public education, even though they affirmatively did not make the choice to take up vouchers. When students leave public schools with a voucher, the school districts must still pay the same amount for costs that can’t immediately adjust to declines in enrollment, such as cooling/heating and utilities. These required payments for a district’s fixed costs mean that districts will have even less to spend on the costs that can adjust due to changes in enrollment. What this means is that public school students who remain in public school will have less funding allocated to them for adjustable costs like teaching, curriculum development, and pupil support services due to other students taking up voucher programs. (To calculate this cost for your district, see EPI’s fiscal externality calculator).

Alarm level 4: National voucher proposals threaten public schools throughout the country

Beyond state voucher programs, Congress is considering national voucher proposals. This would enlarge the scope of vouchers beyond Republican-controlled states. The Educational Choice for Children Act, or ECCA, (H.R. 817, S.292) is a proposal to create a national voucher program. The program would divert over $10 billion per year in tax dollars to private schools and families who homeschool. The bill would do this by establishing a new dollar-for-dollar tax credit for individuals and corporations that make charitable contributions to organizations that give scholarships— or vouchers—for students to attend private schools. Donors who give corporate stocks would receive more back in tax cuts than the after-tax value of the stocks if they had sold them. 

Beyond vouchers harming student educational outcomes, the program itself would be extremely expensive. The bill proposes that Congress allocate $10 billion in tax credits for the voucher programs. But that doesn’t even account for the cost of voucher programs to public schools. The sponsors of the bill estimate that ECCA would provide vouchers for 2 million students. Given that at least two-thirds of students who take up vouchers previously attended private school, we can estimate that 666,667 voucher recipients will come from public school, which is about 1.4% of total public school students. Using our fiscal externality calculator, we estimate that students who remain in public schools would lose an average of $151 per pupil, and public school systems would lose a total of $6.225 billion dollars due to a national voucher scheme.

Alarm level 5: Tax cuts reduce available revenue for public schools

Many states are following a recent trend of reducing revenue available for schools through sweeping tax cuts. Corporate and personal income tax revenue represents about half of state tax revenue, which, in turn, funds about half of K–12 education budgets. From 2021 through 2024, 28 states passed personal or corporate income tax cuts, which will result in hundreds of billions of dollars in lost revenue by 2028, and more states are considering or have passed income tax cuts in 2025. At the same time, some states are cutting and attempting to eliminate property taxes, which account for over a third of revenue for K–12 education on average. States that want to invest in opportunity and long-term economic prosperity and to help their students continue recovering from pandemic-related learning loss should reverse this harmful trend.

Conclusion: What would happen if we boosted public school funding instead?

Given the real and damaging threats to public school funding, we conclude by asking what students actually need to succeed. Growing evidence over the last decade shows that public schooling in the United States simply needs more resources to deliver even better student achievement—not some radical disruption in how it is delivered and by what institutions.

For example, research has shown that school finance reforms between 1972 and 2010 led to a 10% increase in school spending for 12 years, which increased high school graduation rates, wages and family incomes in adulthood for children from districts with the spending increase. Others have similarly found that a $1,000 increase in per-pupil spending for low-income districts would reduce the test score gap between low- and high-income school districts within a state by nearly 40% of the baseline gap.

Increasing funding, rather than withholding federal aid or using public dollars to pay for private schooling, is the path forward for public schools. Public schools have fallen short in many communities because of lawmakers’ choices to underfund them. But the only education system that can fulfill the promise of equal opportunity for all children, regardless of race, disability, or income, is a fully funded system of public schools. Lawmakers interested in building prosperous communities should invest in public schools rather than defunding and privatizing them.

The U.S. public education system needs all sorts of reforms to boost its capacity to provide an excellent education to all children. But public education is also why the United States became the richest country the world has ever seen, and its future depends on maintaining and strengthening this system—not tearing it down.

What does the Department of Education do?

The Department of Education (DOE) accounts for about 3.5% of the entire federal budget and provides crucial funding for public K–12 schools, narrowing some of the huge gaps between needed resources and state and local revenue. Specifically, the DOE provides funding for low-income children through Title I funds and funding for special education through IDEA programs. These resources help balance the scales of school funding, as high-poverty districts often get less funding from local sources, which rely heavily on property taxes. The DOE also administers crucial programs—like Pell grants and loans—that make college attendance possible for those who are not rich. 

Often, demands to “abolish” the DOE are accompanied by vague reassurances that the money spent by the DOE will somehow be “returned to the states.” But the vast majority of money spent by the DOE is exactly given to state and local school systems. Figure A shows that just over 51% of federal funding goes to the third of districts with the greatest need (as measured by district poverty), while only 18% goes to the third of districts with the lowest neighborhood poverty. Unless one is entirely confident that a Trump administration-led effort to “return” this money to state and local districts will somehow be as effective in targeting higher-poverty districts, it is a near-guarantee that any effort to cut or abolish the DOE will take money directly out of those districts whose students need it the most.

Figure A

The DOE has also sought genuine efficiencies as one of its key endeavors. The DOE in previous administrations has tightly monitored colleges that took federal government resources and failed to provide a quality education. Given the skyrocketing cost of college attendance and the rising importance of having a college degree, the DOE’s efforts to find these efficiencies should have been widely praised and built upon. Instead, however, the Trump administration has blocked these efforts. For example, the Obama administration’s DOE implemented two rules cracking down on for-profit colleges that saddled students with debt but failed to provide a quality education. These rules sought to cancel debt for these ill-served students and fine the colleges. But the first Trump administration rolled back these rules.

The biggest proponents of abolishing the Department of Education make vague claims about K–12 public schools “indoctrinating” children in “leftist” values. But the federal government has almost no direct sway over what is taught in K–12 public schools, that is overwhelmingly decided on the ground in local school districts. If parents in these districts (or anybody else) want a curriculum change, they should focus their attention on local decision-makers, not the DOE.

Privatization is not the answer

Nearly 90% of K–12 students attend public schools. A strong research base indicates that these schools would benefit from higher levels of resources, with dollars translating directly into higher test scores and better post-school outcomes for students. Privatization of public schools is not a serious option to make them better—yet privatization is the clear goal of the Trump administration.

Secretary McMahon has a long history of favoring voucher programs, which allow parents to use public taxpayer dollars to send their children to private school or home school. There is no evidence to suggest that private schools or homeschooling could possibly translate these resources into more effective student outcomes than public schools (see evaluations of the evidence here, here, and here). Further, the majority of students who “take up” vouchers are already attending private school, basically providing a windfall to affluent parents at the expense of public schools.

These voucher programs pose a grave danger to public school budgets in states where right-wing advocates have had early success. In states like Arizona, voucher programs have ended up costing nearly 10 times its projected cost. To the degree that growing voucher programs do entice some parents to send kids to private schools, there are direct fiscal costs to students choosing to remain in public schools (see our district-level calculator to learn more).

Recent proposals put forward by Republicans, backed by the White House, seek to create a national voucher program in the form of a new tax credit where taxpayers who donate would get 100% of their money back. While most tax credits for charitable causes are structured where part of the contribution is paid by the government and part by the taxpayer, in the case of this national voucher tax credit proposal, the government would pay for all of it. In effect, their effort to privatize education at the national level essentially functions as tax shelters for the wealthy.  

Like most of the Trump administration’s efforts, the drive to diminish the DOE shows they have no serious interest in making public institutions work better or more efficiently, they just want them stripped of resources.

What this report is about

Voucher programs for schools are rapidly expanding across the country. Under these programs, public budgets provide funding to parents to either send their children to private school or homeschool them.

These programs’ growing popularity raises the question of whether letting public money leave the public school system and subsidize private forms of schooling is a way to improve children’s access to an excellent education. EPI’s analysis shows that vouchers harm public schools.

To illustrate the damage, EPI has developed a tool that estimates fiscal externalities—the dollar costs to school districts from students leaving public schools with a voucher. An externality produces an outcome for those who aren’t responsible for the decision at hand. In this case, the fiscal externality is the negative effect that voucher programs will have on public school systems: Voucher programs redirect money away from traditional public schools.

Users of the tool can try out different scenarios to see how much money students will lose out on. The fiscal externality helps to put a number to the reality that children who don’t participate in voucher programs will still bear the cost for educational choices that others make. The fiscal externality does not quantify the entire cost of voucher programs. It represents a piece of those costs, but an important, and often hidden, cost.

Some factors affecting the impact of voucher programs on public schools

• How many children will go to private schools or be homeschooled in a given year?
• How quickly will enrollment numbers in public schools fall?
• How many of the school district’s costs are fixed and can’t be changed in response to lower enrollment numbers? (For example, heating and cooling costs for school buildings will remain the same regardless of enrollment.)
• How many of the school district’s costs are variable and can be changed in response to the drop in enrollment numbers?

Download the fiscal externality calculator

Summary

Universal voucher programs for schools are rapidly expanding across the country. Under these programs, states give parents stipends to either homeschool their children or send them to private school.

The growing popularity of vouchers raises a host of crucial questions and concerns. Key to informing the debate are questions of public finance and education quality. Is allowing public money to leave the public school system and follow kids to private schools the most effective or equitable way to make sure every child has access to an excellent education? Our view is that it’s not. Public dollars allocated to education should go to boosting spending in public systems, not subsidizing private education.

Proponents of vouchers try to claim that expanding them would not harm public resources for education. Their argument hinges on the fact that public school spending is generally determined by governments setting a per-pupil allocation and then multiplying this allocation by projected enrollment. This funding model allows voucher proponents to claim that if vouchers pull children out of public schools, it still leaves per-pupil spending untouched, even though vouchers might reduce overall spending. In effect, proponents are arguing that vouchers would not degrade public schools’ ability to provide educational services.

But there are many flaws in this argument. Most obviously, introducing any new demand on public expenditures will lead to some pressure throughout public budgets—including school budgets—even if it does not immediately come directly from public school allocations. Many vouchers end up going to students who have never been in public schools, so funding these students’ private school expenses introduces new pressures on public budgets.

This report focuses on another often underrecognized, but extremely important, source of stress that voucher programs can impose on the ability to provide an excellent public education for all. This is the fiscal externality imposed on school districts, students, and their families when declines in student enrollment numbers intersect with the fixed nature of many school costs. An externality produces an outcome for those who, otherwise, aren’t responsible for the decision at hand. In this case, the fiscal externality is the negative effect that voucher programs will have on public school systems that will now receive less money from the government.

The key contribution of this report is the introduction of a calculator for policymakers, researchers, and advocates to assess the quantitative impact of this fiscal externality for every school district in the country. In what follows, we walk through the general nature of the fiscal externality and then explain how it is operationalized in our tool.

We offer an example in Ohio, a state with one of the oldest active voucher programs in the country and where vouchers have grown substantially. We calculate the fiscal externality for a 5% decline in enrollment for the Cleveland Metropolitan School District, which has its own voucher program that works in conjunction with several state voucher programs.1 The results show that Cleveland public school students stand to lose between $364–$927 per pupil in education spending, which adds up to $12–$31 million in a total fiscal externality. 

Background on vouchers

As a policy tool, school vouchers have a long and questionable history. Following the Brown v. Board of Education ruling in 1954, several Southern states used vouchers as a tool to undermine school integration efforts, with states offering voucher programs to enable parents of white children to afford segregated private schools (Ford, Johnson, and Partelow 2017). Starting in the 1990s, states have enacted “modern” voucher programs with the claim of supporting students with special needs or students in low-income districts, offering a small number of these students pathways to private school. The number of students using vouchers stood at just 11,000 in 2000 but has increased to over 600,000 in 2021 (Welner, Orfield, and Huerta 2023). 

More recently, legislation has broadened the applicant pool for vouchers by creating universal programs in which any student can use public funds to pay for private education. Eight states have enacted universal voucher legislation in the past three years, bringing the total number of states with universal voucher programs to 11 (EdChoice 2024).

Figure A shows the 31 states with voucher programs and highlights the 11 states with universal programs. A program is considered universal when nearly all students are eligible for the benefit. Voucher programs are dominant in the Southeastern and Midwestern parts of the country, places that are also less likely to have robust public education budgets in the first place.

Figure A

While additional costs to provide quality education are not a problem in itself, (and we at EPI are huge advocates of increasing funding for public schools), study after study has found that voucher programs do not improve student achievement and, hence, are not a cost-effective way to spend any additional dollars that states or localities are willing to commit to K–12 education. In three states that enacted voucher programs —Louisiana, Indiana, and Ohio, researchers assessed student test scores in periods following program enactment and found that academic performance worsened.2

Students in Louisiana’s Scholarship voucher program experienced declining achievement in both language arts and mathematics during their first two years in the program (Mills and Wolf 2023). Similarly, Waddington and Berends (2018) found that voucher students in the Indiana Choice Scholarship voucher program experienced declining achievement in mathematics one year after attending private school. Under the Ed Choice Program in Ohio, voucher students who previously attended high-performing public schools performed worse than they would have had they remained in public school (Figlio and Karbownick 2016).

Instead of boosting student achievement in equitable and cost-effective ways, voucher programs generally end up putting large new demands on state and local budgets and increase the cost of educating students who remain in public school. In Arizona for example, where 75% of voucher program users are already in private school (SOS 2024), legislators grossly underestimated the cost of voucher programs—by tenfold. The voucher program was initially projected to cost $65 million in 2023 but actually cost upwards of $708 million. Because of these overruns, Arizona’s voucher policy is now leading to a state budget crisis (Hager 2024).

The intuition behind the fiscal externality

Public schools—like nearly every other economic entity in the modern economy—require a mix of inputs, some of which are variable and some of which are fixed. Variable inputs are those that are needed to produce any extra increment of a good or service. Fixed inputs are those that are needed to produce even a single increment, but whose costs don’t rise in lockstep with how much is produced. Take the example of a gas station. The fixed costs of the gas station are the pumps and the land. The owners must have secured these before they can sell a single gallon of gas to customers. And once the owners have bought the pumps, owners won’t need to buy them again as more gas is pumped. The variable costs of the gas station include the gas that is dispensed. Owners need to purchase each new gallon from suppliers before selling the gas to customers.

The revenue brought in by each new provision of the good or service must be sufficient to cover both variable and fixed costs. Otherwise, problems will arise. Say that a gas station rents its pumps and land for $10,000 per month and pays $2.00 per gallon to suppliers for each gallon of gas it sells. With the gas it sells each month, the gas station must earn not just enough to pay suppliers for the variable costs, but also the $10,000 to cover fixed costs. If the gas station doesn’t earn this much, it will eventually go bankrupt.

Unlike gas stations, schools don’t go bankrupt, but if they lose revenue and have a significant share of total costs accounted for by inputs that are not adjustable in the short run, then deep problems can result. Take the case of revenue loss driven by uptake of vouchers. Total revenue for public school systems is generally based on enrollment, with a per-pupil allocation of total spending being multiplied by the school district enrollment to determine total funding. At first, it would seem that reducing enrollment would reduce both total revenue and the number of students needing educational services proportionately, which should leave the schools’ ability to provide education unaffected.

But if any significant share of school costs is fixed, this is not true. Fixed costs, such as building electricity or utilities, do not automatically fall when student enrollment declines. As a result, when total revenue declines, districts are stuck paying more per pupil for costs they can’t adjust. All the downward adjustment that occurs when enrollment is reduced must be absorbed by variable costs, which fall even on a per-pupil basis. The fiscal externality is the per-pupil funds each district would require to maintain the same level of variable cost spending for remaining public school students due to voucher programs. This cost is entirely borne by state and local education budgets and leaves districts unable to deliver the same level of instruction to the remaining public school pupils.

What exactly would it mean for schools if variable costs per pupil fell? There would be fewer resources available on a daily basis to educate kids—fewer teachers and other staff members and fewer curriculum and education supplies. Education quality would suffer. To the degree that daily services provided to students by schools require all inputs—variable and fixed—it is fair to say that this reduction in variable inputs per pupil translates 1-for-1 into reduced services for students.

The key pieces of information for assessing how much stress this fiscal externality would place on public schools’ ability to provide high-quality education are these: how large and how quickly an enrollment decline could be triggered by the introduction of vouchers and what share of public schools’ costs are fixed.

Figure B

Figure C

To illustrate the fiscal externality, let’s take the example of a hypothetical school district of 30,000 students. The colored bars in Figures B and C show a stylized breakdown of aggregate expenditures (Figure B) and per-pupil expenditures (Figure C) before and after a decline in student enrollment for this school district. The navy bar on the far left in Figures B and C shows the aggregate spending and per-pupil spending before a decline in enrollment. This hypothetical district’s total expenditures are $500 million and, when divided by 30,000 students, yield a per-pupil spending of $16,667. The light blue bar illustrates the change to aggregate and per-pupil spending after a decline in enrollment by 10%. When enrollment declines by 10%, total spending reduces by 10% to $450 million, but per-pupil spending stays the same.

If schools were able to reduce all expenditures in direct proportion with declines in enrollment, then the fiscal externality of voucher programs would be zero. For example, schools might be able to reduce instruction costs by not renewing teacher contracts. These expenditures would be considered variable, in that they can adjust to enrollment changes.

In the short run, however, schools will still have to continue heating buildings and conducting basic maintenance and paying interest on accumulated debt regardless of enrollment changes. These fixed costs cannot be reduced commensurate with enrollment. The middle bars in Figure B and C show the changes in total and per-pupil fixed costs when enrollment is reduced by 10%. Because schools cannot reduce their fixed costs regardless of a change in enrollment, their total fixed costs stay the same, even if they receive less money to pay their costs.

That leaves schools no other option but to reduce their spending on variable costs more than proportionally to the decline in enrollment. The far-right bars in Figures B and C show the change in variable costs due to a 10% enrollment decline. In Figure B, the school district has to reduce total variable spending more than in direct proportion with enrollment declines because they cannot change their fixed costs when enrollment is reduced. As a result, when enrollment declines by 10%, total fixed costs remain at $250 million, while total variable costs drop by $50 million to $200 million.

Figure C shows per-pupil spending on fixed and variable costs if both spending categories could adjust to changes in enrollment in the middle and far-right bars. Like overall spending, if fixed and variable costs were both adjustable, per-pupil spending would stay the same at $8,333 for both categories. However, because total fixed costs cannot be reduced in the short run, per-pupil fixed costs increase, and variables costs decline by more than in direct proportion with enrollment change, from $8,333 to $7,407.

We can calculate the fiscal externality by taking the difference between the per-pupil variable costs before and after the enrollment decline. It doesn’t take a substantial drop in public school enrollment for these costs to be significant. In this hypothetical example, the externality is $926 per pupil or $25 million overall.

Considerations in calculating the fiscal externality

The stylized example in Figures B and C illustrates the potential impact of a decline in enrollment due to a voucher program that draws students away from public schools toward private schools. Turning these illustrations into policy-relevant magnitudes for specific school districts requires some careful considerations around the change in enrollment rate and their unique combination of fixed and variable costs. In the following sections, we describe some considerations users should take when using our accompanying calculator to project the fiscal externality of voucher programs for their own district.

Changes in public school enrollment

The fiscal externality will be proportional to the fraction of public school students that transition to voucher programs in a given year. Using the 2021–2022 National Center for Education Statistics (NCES) data, we provide enrollment for every district, and the user can choose the projected rate of enrollment loss they believe might occur in a district.

At present, the share of public school students that use voucher programs to transition to private schools is small. A large share of students that use voucher funding is already enrolled in private school. For example, in Wisconsin, over 80,000 students are enrolled in voucher programs, and research shows only 25% of these students are coming from public schools, suggesting the total loss in public school enrollment to vouchers is only 2% of public school enrollment in the state.3 In the accompanying calculator, users need to input the decline in public student enrollment to calculate the fiscal externality, not the share of total students enrolled in voucher programs, which is likely significantly larger than the decline in enrollment from public school.

In our calculation of the fiscal externality, we assume that the composition of public school students leaving the district to take up voucher programs is the same as the composition of public school students remaining in the district. This is more likely to be true when the voucher program is universal in nature, allowing all students to participate. However, if the voucher program targets a specific group—for example, students below a certain income threshold or those with disabilities—the composition of students leaving and those staying will be different, and results should be interpreted with caution.

For example, if a voucher program exclusively targets students with disabilities and these students take up the program, the resulting composition of public schools will have fewer students with disabilities, and the composition of private schools will have more of these students. This changing composition would alter the types of resources required for public schools, and districts would need to plan accordingly. Similarly, we don’t make assumptions about the grade level a student might be coming from in a transition away from public school to private school, which might have implications for the types of cost-cutting strategies districts can take. In reality, the choices a school has for cost reduction would be different if all the students came from a single grade, compared with if they were spread out across several grades.

How do schools adjust to less funding? An explainer on fixed and variable costs

The lost revenue of students transitioning away from public school should be blunted if public schools are able to commensurately reduce expenditures in proportion to the reduction in enrollment. However, as described in our hypothetical example in the previous section, only certain costs can likely be adjusted in the short run. Many educational costs, such as ongoing construction contracts, heating and utilities, curriculum development and principals’ offices, cannot be changed in the first several years of an enrollment decline. These costs are fixed.

Using district-level data from the National Center for Education Statistics, we categorize education costs into three major categories: instruction, service, and capital. In this section, we describe these categories in detail and provide some context for determining what share of each cost category might be considered fixed or variable. Ultimately, users can rely on their context-specific knowledge to identify the share of each category that is fixed or variable.

Instruction costs: The first major cost category for districts is instruction, which includes teacher salaries, benefits, and non-personnel costs (supplies and materials) for regular, special, and vocational programs. Prior literature has categorized the vast majority of instruction cost as variable: When enrollment declines, districts can reduce the number of teachers much faster than they can halt a building being constructed (Ladd and Singleton 2020; Bifulco and Reback 2014).

Yet, there may be several instances when not all instruction costs can be reduced commensurately with enrollment even over a year or two. First, not all teachers are subject to annual contract renewals, so even if a district decided to lay off some teachers, it might not be possible to do so in the time frame being estimated. Second, many teachers are spread out across grade level, subjects, and even schools, which makes reductions in teachers hard to justify. If, for example, fourth graders were exclusively targeted by voucher programs, school districts could reduce the number of fourth grade teachers in response, but often the decline in enrollment is much more diffuse, making the choice to let go of any one teacher difficult. Third, non-personnel costs like materials and supplies may be bought in bulk and can’t be changed in the short run in response to enrollment declines. Fourth, districts of different sizes may have different abilities to adjust instruction costs (Lapp et al. 2017). Rural districts, which are smaller in population, may make different choices in adapting to enrollment reductions than large urban districts, which may have greater ease in moving resources around.

Service costs: Service costs include the costs a district incurs to support instruction, student development, and achievement. These costs include pupil services (expenditures for attendance recordkeeping; social work; student accounting; counseling; student appraisal; record maintenance and placement services; medical, dental, nursing, psychological, and speech services), instructional staff services (supervision and instruction service improvements; curriculum development; instructional staff training; and instructional support services, such as libraries, multimedia centers, and computer stations for students outside the classroom), costs associated with general and school administration, and food services. Service costs also include any nonelementary and secondary services provided by the district such as adult education and English-language learning,

Prior literature has categorized at least some service costs as variable, while categorizing other service costs as fixed (Bifulco and Reback 2014). While some districts may view all services as nonadjustable in the very short run, other districts may be able to cut certain types of services, such as nursing or mental health services, in an effort to protect resources that directly support student learning in the short run. Users looking to identify a longer time horizon to estimate a projected change in district expenditures may decide that a larger share of service costs is variable, while users looking to identify a fiscal externality in the short run may decide to categorize a majority of service costs as fixed.

Capital costs: The final category of district costs is the cost of capital and debt service: school buildings, operations and maintenance, and outstanding payments that a district owes. Prior literature has often categorized these costs as rigidly fixed over the short and even medium run because the time horizon for schools to make such large cost-cutting changes (closing a building, for example) is much longer than the time horizon needed for districts to make changes to instruction or other services. However, if a researcher is looking to project the medium- to long-run effects of voucher programs, capital costs may very well be adjustable, as schools decide to take increasingly drastic measures to respond to enrollment reductions.

Table 1 shows the average cost of instruction, service, and capital costs across all public school districts in the U.S in the 2021–2022 school year. Overall instruction costs average to $9,237 per pupil or about 51% of total costs. Service costs made up 27% of a district’s overall spending, costing $4,845 per pupil. Total pupil services ($1,012 per pupil), total instructional staff services ($756 per pupil), and school administration ($836 per pupil) comprised the majority of service costs. Capital costs make up the remaining 22% of the budget, and construction costs and operation and maintenance costs were the largest costs in this category. 

Table 1

Categorizing costs as fixed and variable through adjustment rates

The accompanying calculator lets users determine the share of each cost category that is variable and the share that is fixed. These choices are formally defined as picking an adjustment rate.

The adjustment rate identifies the rate at which costs can be reduced in relation to enrollment changes, and ranges from 0 to 1. When costs can be reduced exactly proportionally to enrollment changes, they are considered variable. When costs cannot be reduced at all, they are considered fixed, and the adjustment rate is 0, meaning that enrollment declines do not reduce costs at all. When costs are fully adjustable, the adjustment rate is 1, meaning that each percentage decline in enrollment reduces costs by 1%.

For example, if the adjustment rate for instruction costs is equal to 1, then 100% of instruction costs can decline commensurate with changing enrollment. If the user chooses an adjustment rate of less than 1, say 0.5 for example, spending is thought to be “stickier,” or less adjustable. In the case of instruction, given that not all teacher contracts can be halted when there is a change in enrollment, it’s likely that instruction costs are not fully adjustable in the short run. In such an instance, the adjustment rate might be closer to 0.8. In effect, 80% of their costs might be adjustable in the short run, but 20% are fixed. 

Service costs are likely to have a lower adjustment rate than instruction since many functions of education in this category are required to run and maintain a school district regardless of how many students are enrolled. For example, school districts will always need nurses, guidance counselors and social workers, food prep workers and staff professionals to develop curriculum materials for students. These needs imply that service costs are likely a bit stickier than instruction costs. In the short run, service costs might have an adjustment rate of 0–0.5, meaning that each percentage point decline in enrollment can only reduce service costs by 0–0.5 percent—the rest remain fixed. In the longer run, these costs will likely become more adjustable, districts will have time to respond to declines in enrollment, and the adjustment rate should increase commensurately.

Capital costs likely have the lowest rate of adjustment for districts in the short run. This is because districts must continue to pay for construction, operation and building maintenance costs, and to make payments on debt, regardless of small- or even medium-sized enrollment changes. In the longer term, it’s possible these costs will be more adjustable. Prior literature generally categorizes 100% of capital costs as fixed, or as having an adjustment rate of 0 in the short run. However, users looking to make longer-term estimates can decide whether to raise the adjustment rate of capital costs.

When using the calculator, users considering an analysis in their district should think carefully about which costs are adjustable in the time horizon they choose and alter the adjustment rates accordingly.

Outside the scope of this report and calculator is how each voucher program is financed or how it interacts, in an accounting sense, with K–12 budgets. We assume that public K–12 schools are essentially funded on a per-pupil basis, so a 10% reduction in enrollment will lead directly to a 10% reduction in total state/local funding. We don’t describe how vouchers are financed or how they might compete with other educational resources.

Case study: Calculating fiscal externality for Cleveland’s public school district

Among states offering school voucher programs, Ohio currently has five distinct programs. Ohio currently ranks sixth in the country for voucher enrollment (NCES 2024) with 4.1% of its students receiving voucher payments. Three of the programs have expanded eligibility over the past 10 years and are now universal. One such program, the Cleveland Scholarship, is Ohio’s oldest voucher initiative and the second oldest in the nation. Established in the 1995–1996 school year, the Cleveland Scholarship provides between $6,000 and $9,000 in tuition assistance. All students within the Cleveland Metropolitan School District are eligible, with 20% of spots reserved for families earning less than 200% of the federal poverty level. As of 2022, 7,889 students were enrolled in the Cleveland Scholarship, a significant increase from 5,525 in 2010 and 1,994 in 1997 (Fleeter 2023).

Table 2 provides a breakdown of Cleveland Metropolitan School District’s costs in the 2021–2022 school year. In 2022, 35,319 students were enrolled in Cleveland Metropolitan School District, and 51.2% of the district’s costs went to instruction. Salaries comprise 32% of the total budget and 63% of instruction costs. Benefits comprise 13% of the total costs and 26% of instruction costs. Service costs make up 32% of the overall budget and were comprised of business/central costs (payroll and accounting services, and development and evaluation services), school administration costs, and pupil service costs. The remaining 16% of the budget are made up of capital costs, a majority of which were operation and maintenance costs for buildings and facilities (9.4% of the overall budget and 58% of capital costs).

Table 2

Calculating the fiscal externality for an enrollment change in the Cleveland Metropolitan School District requires users to identify the adjustment rate for each of the three major cost categories: instruction, service, and capital expenditures. Table 3 shows how different choices of adjustment rates for each category would translate into fixed and variable costs for the Cleveland Metropolitan School District.

Table 3

The far-left columns provide the per-pupil cost of instruction, service, and capital costs. The subsequent columns move from a completely variable adjustment rate (1) on the left side of the table to a fixed adjustment rate (0) on the right side of the table. When the adjustment rate is 1, 100% of the costs can be reduced proportionately with changes in enrollment—costs are effectively characterized as variable costs. On the far right, when the adjustment rate is 0, 0% of the costs can be reduced proportionately with changes in enrollment—they are all set to be fixed costs. The middle columns show how adjustment rates between 0 and 1 would lead to different shares of each cost category being categorized as fixed or variable. Adjustment rates closer to 1 lead to a larger share of the cost category varying with changes in enrollment. Adjustment rates closer to 0 will have a smaller share of the cost category varying with changes in enrollment.

Once the adjustment rates are determined for the cost categories, the calculator provides an estimate for the fiscal externality. Table 4 shows a range of estimates for a hypothetical fiscal externality in the Cleveland Metropolitan School District, under a scenario of a 5% enrollment drop due to voucher programs. The table shows a range of adjustment rates for instruction, service costs, and capital costs. The top panel provides estimates when the adjustment rate for capital costs is set to equal 0, and the bottom panel provides estimates when the adjustment rate is set to equal 0.2. We chose these scenarios to reflect the fact that, in the short term, capital costs will likely not change in response to changes in enrollment and so the vast majority of this category is considered fixed.

Table 4

Under each capital adjustment rate scenario, we provide a range of adjustment rates for instruction and service costs, reflecting different possibilities that school districts like Cleveland Metropolitan may face in the wake of an enrollment drop. The columns indicate different adjustment rates for instruction. The left-most column assumes all instruction is fully adjustable to changes in enrollment, and the right-most column assumes an adjustment rate of 0.5, which means that instruction costs can only be cut by 5% for every 10% reduction in enrollment. The rows indicate different adjustment rates for services. We pick adjustment rates that are smaller to reflect the fact that many cost functions categorized as a service cost are functions required to maintain basic education regardless of enrollment size.

In the top left of the table, when the adjustment rate of the instruction cost is 1 and the adjustment rate of service and capital costs is 0, the fiscal externality is $606 per pupil. In the short run, it’s likely that not all instruction costs are variable. In the middle column in which the adjustment rate for instruction is 0.8, the fiscal externality ranges from $533–$734. In the last column, instruction costs are much less adjustable (the adjustment rate is 0.5), and the fiscal externality ranges from $726–$927. A plausible scenario for the school district might be one where the adjustment rate for instructions costs is 0.8 (80% of instruction costs are variable) and an adjustment rate for service costs is 0.2 (20% of service costs are variable). In this case, voucher policies that reduce enrollment by 5% mean that the Cleveland Metropolitan School District must reduce services by $654 for each public school student. This decline translates to a total fiscal externality of $22 million a year (in 2022 dollars).

The results show considerable fiscal externalities associated with declines in enrollment from voucher programs. A 5% decline in enrollment is just an example, but given that 4.1% of Cleveland’s students are already enrolled in voucher programs and these overall program costs often grow quickly (Abrams and Koutsavlis 2023), it’s not impossible to see a scenario where large voucher programs could lead to sizable fiscal externalities.

These externalities are not just a problem for public budgets. Students stand to lose out on their potential educational achievement when funding to schools is cut (LaFortune, Rothstein, and Schanzenbach 2018). When that funding is reduced, students, particularly in high-poverty neighborhoods, are likely to have worse outcomes than they would have had if their schools had retained the previous level of education funding.

Download the fiscal externality calculator

Conclusion

Vouchers undermine efforts to make excellent public education available to all children by pressuring fiscal resources available to public schools along many different dimensions. In this report we provide a tool that can help interested parties put estimated dollar amounts on one particular channel of this pressure that is often underrecognized: the fiscal externality of voucher programs on public education. While this report focuses on reductions in enrollment that can occur from voucher programs, the fiscal externality can also be calculated for any program that puts downward pressure on public school enrollment, such as charter schools.

Building on approaches that examine the fiscal impacts of charter schools (Bifulco and Reback 2014; Ladd and Singleton 2020), we provide a method and accompanying calculator for stakeholders all over the country to estimate the fiscal externality of vouchers in their home districts. We use the prior literature as a guide to categorize spending into categories that are likely adjustable in response to declines in enrollment (variable costs) and costs that are likely nonadjustable to changes in enrollment (fixed costs). However, we provide the opportunity for users to define what share of each of these costs is actually adjustable when they do their own calculations. Users should use their discretion in determining the share of variable and fixed costs that are adjustable in their given district.

In the example we gave with Cleveland, we find that the fiscal externality of a 5% decline in public school enrollment from a voucher policy could be very large, ranging from $12 million to as high as $31 million when a large share of a district’s cost functions is considered to be fixed. We stress that these calculations are mere projections based on a possible decline in public school enrollment. Users will have to provide their best guess as to how much enrollment will actually decline in order to calculate the fiscal externality in their home districts.

Finally, we stress that these are just some of the costs of voucher programs, not the only costs. There are many other costs of subsidizing private education with public funds. The fiscal externality is a key part of measuring the cost of vouchers and of deep importance if we care about the quality of public schooling in our country. Good public education requires strong funding and stable enrollment numbers. Voucher policies threaten to destabilize public education funding and student learning, in part, by introducing an element of uncertainty. If school administrators don’t know what their future enrollment numbers will look like, this will prevent them from being able to make plans. The one certainty is that student achievement will suffer as a result.

Notes

1. Cleveland Metropolitan School District was previously named Cleveland Municipal School District. In the National Center for Education Statistics, the district is named Cleveland Municipal School District.

2. Critically, these studies were conducted prior to the COVID-19 pandemic and, thus, do not reflect changes in education achievement due to the pandemic.

3. The commitment of public dollars to students who have never been in public schools is an additional source of fiscal stress for states; however, it is not the fiscal stress documented in this report and tool.

References

Abrams, Samuel E., and Steven J. Koutsalvis. 2023. The Fiscal Consequences of Private School Vouchers. Southern Poverty Law Center and Education Law Center, March 2023.

Bifulco, Robert, and Randall Reback. 2014. “Fiscal Impacts of Charter Schools: Lessons from New York.” Education Finance and Policy 9, no. 1: 86–107. https://www.jstor.org/stable/educfinapoli.9.1.86

EdChoice. 2024. “School Choice in America.” School Choice in America [data dashboard], accessed October 23, 2024. 

Figlio, David, and Krzysztof Karbownik. 2016. Evaluation of Ohio’s EdChoice Scholarship Program: Selection, Competition, and Performance Effects. Thomas B. Fordham Institute, July 2016.

Fleeter, Howard B. 2023. Ohio School Voucher Overview. Ohio Education Policy Institute, June 2023.

Ford, Chris, Stephenie Johnson, and Lisette Partelow. 2017. The Racist Origins of Private School Vouchers. Center for American Progress, July 2017.

Hager, Eli. 2024. “School Vouchers Were Supposed to Save Taxpayer Money. Instead They Blew a Massive Hole in Arizona’s Budget.” ProPublica, July 16, 2024.

Ladd, Helen F., and John D. Singleton. 2020. “The Fiscal Externalities of Charter Schools: Evidence from North Carolina.” Education Finance and Policy 15, no. 1: 191–208. https://doi.org/10.1162/edfp_a_00272

Lafortune, Julien, Jesse Rothstein, and Diane Whitmore Schanzenbach. 2018. “School Finance Reform and the Distribution of Student Achievement.” American Economic Journal: Applied Economics 10, no. 2: 1–26.

Lapp, David, Joshua Lin, Erik Dolson, and Delia Moran. 2017. The Fiscal Impact of Charter School Expansion: Calculations in Six Pennsylvania School Districts. Research for Action, September 2017. 

LeFebvre, Joanna. 2024. “EARNCon 2024 Voucher Presentation” (slide presentation). Data retrieved from Education Commission of the States [database], September 12, 2024.

Mills, Jonathan N., and Patrick J. Wolf. 2023. “Vouchers in the Bayou: The Effects of the Louisiana Scholarship Program on Student Achievement After 2 Years.” Educational Evaluation and Policy Analysis 39, no. 3: 464–484. https://doi.org/10.3102/0162373717693108

National Center for Education Statistics (NCES). 2024. “Private School Universe Survey (PSS)” [database], 2021–2022.

Save our Schools Arizona Network (SOS). 2024. “Universal Vouchers: The Verdict Is In.” Save Our Schools Arizona Network, January 17, 2024.

Waddington, R. Joseph, and Mark Berends. 2018. “Impact of the Indiana Choice Scholarship Program: Achievement Effects for Students in Upper Elementary and Middle School.” Journal of Policy Analysis and Management 37, no. 4: 783–808. https://doi.org/10.1002/pam.22086

Welner, Kevin, Gary Orfield, and Luis A. Huerta, eds. 2023. The School Voucher Illusion: Exposing the Pretense of Equity.  New York: Teachers College Press at Columbia University.

On Tuesday, the House Committee on Education and the Workforce held a congressional hearing on voucher expansion featuring three voucher advocates and one opponent. The hearing comes amid an intense, coordinated push this year by anti-public school advocates who have long sought to privatize public education, in part through state-level efforts to enact private school voucher programs in state legislatures across the country.

School vouchers—which include traditional private school subsidies, Education Savings Accounts, and private school tuition tax credits—are diversions of public funds to private and religious schools. Efforts to implement and expand voucher programs in states across the country are key to the relentless and enduring campaign to defund and then privatize public education, a movement that also includes manufacturing mistrust in public schools and targeting educators and their unions.

Despite overwhelming evidence of the harms of voucher programs and the unpopularity of attacks on public education, right-wing anti-education privatization advocates have prioritized the creation or expansion of school voucher programs as a policy goal this year in statehouses across the country. As of March 2023, public education advocates are tracking voucher bills in at least 24 states. As of mid-April, universal voucher bills—which will allow all families, regardless of income, to use public funds to pay for private education—have passed in four states: Iowa, Utah, Arkansas, and Florida. Meanwhile, voucher expansion bills have failed in at least six states so far in 2023: Georgia, Texas, Idaho, Virginia, Kentucky, and South Dakota.

Given the renewed push for state school voucher legislation and the certainty of continued attacks on public education, policymakers and advocates must renew their efforts to oppose vouchers in every form and fulfill states’ constitutional mandate of universal, high-quality public education.

Public education advocates have been tirelessly fighting against harmful voucher bills in states across the country

For years, state groups affiliated with EPI’s nationwide Economic Analysis and Research Network (EARN), alongside teachers’ unions and other public education advocates, have been sounding the alarm about the threat of vouchers to public education. Though school voucher bills have already passed in four states in 2023, it’s not too late for other states and future lawmakers to learn from the work of public school advocates and choose a different path. Below, we identify five EARN groups among those that have been particularly engaged in prolonged fights against voucher expansion in their states and can serve as guides for assessing vouchers’ impacts and opposing state-level attacks on public education:

Arizona Center for Economic Progress (AZCEP): AZCEP has conducted significant analysis of voucher programs in response to relentless attacks on public education in Arizona, particularly in 2022, during which four voucher expansion bills were under consideration. Recent AZCEP resources include a four-part series on the history of vouchers in the state, an analysis of the fiscal impacts of vouchers on public schools, a fact sheet on the lack of transparency and accountability surrounding vouchers, and evidence that vouchers are creating unequal opportunities for most students. AZCEP also joined teachers, parents, and other public school advocates in a statewide campaign to block the voucher expansion bill passed in 2022. Unfortunately, well-funded attacks on public education prevailed, and the state now stands to lose up to $1 billion per year for public schools.

Georgia Budget and Policy Institute (GBPI): Over the past decade, GBPI has produced research and analysis in response to numerous attempts to expand voucher programs in Georgia. Most recently, GBPI provided analysis that helped defeat SB 233, a voucher bill that threatened to funnel millions of dollars away from public schools. The bill garnered opposition from rural Republicans, who know their constituents stand to lose the most from the diversion of public school funds to private schools. GBPI also analyzed data from Georgia’s Qualified Education Expense Tax Credit to show that the program drains public funding from rural counties and redistributes it to a few wealthier counties. On TikTok, GBPI’s resident vouchers expert Stephen Owens explained how tax credit vouchers are overwhelmingly claimed by wealthy families and serve as tax shelters for businesses.

Florida Policy Institute (FPI): FPI has written numerous reports on the fiscal impacts of voucher expansion proposals in Florida. A 2023 FPI analysis found that HB 1, which passed the state’s Republican-controlled legislature and was signed into law, will cost the state $4 billion in its first year alone. According to FPI research, existing voucher programs in the state are already siphoning public school funds to subsidize private school tuition to the tune of over $1 billion during the 2022–2023 school year.

Common Good Iowa (CGI): CGI has been vocal in its opposition to voucher expansion bills in Iowa over the past three years: These bills represent a “radical giveaway to wealthy families already in private schools.” In 2023, CGI published research showing that the state’s planned voucher expansion would cost the state $340 million and lead to losses of $7,600 per student—losses that will be felt most by low-income students and students in rural counties. CGI also created an in-depth explainer on how wealthy Iowans use private school tuition tax credits as a profitable tax avoidance scheme—paid for by everyone else. With the help of recently-expanded Republican control of the state legislature and a voucher-obsessed Republican governor, Iowa’s voucher expansion bill passed this year and was signed into law.

Every Texan: In Texas, Every Texan has been sounding the alarm about the harm of school vouchers for a decade. In 2017, Every Texan published a research brief finding that the state’s voucher program would cost public schools over $2 billion and showing how vouchers predominantly benefit wealthy families. Every Texan reminds us that vouchers are a legacy of white supremacy, unpopular, anti-democratic, and “just bad policy.” Though Texas Governor Greg Abbott has identified voucher expansion as his signature proposal for the 2023 legislative session, a bipartisan group of legislators (including rural Republicans) have effectively blocked the bill by passing a budget amendment that prohibits the use of public funds for private schools.

Vouchers are a failed, unpopular policy driven by larger efforts to destroy public education

There is substantial and growing evidence that voucher programs do not serve students and may deepen educational and economic inequality. Voucher programs and the broader education privatization movement of which they are a part are also deeply unpopular. Instead, education privatization is a project by deep-pocketed right-wing funders and think tanks committed to dismantling our public institutions and collective power and implementing a policy regime of social control in service of the wealthy and corporations.

Ineffective, inefficient, and inequitable: Research on state and local experience shows vouchers are a failed public policy

• Vouchers do not improve educational outcomes and likely worsen them. There is an extensive body of research finding that voucher programs do not improve student achievement. Recent studies in four states all showed that students who used vouchers experienced worse academic outcomes than their peers, and a study of voucher programs in Milwaukee found that voucher students performed better after transferring from private to public schools.
• Vouchers represent a redistribution of public funding to private entities that leads to fewer funds available for public goods. An analysis of voucher programs in seven states found an unmistakable trend of decreased funding for public schools as a result of voucher expansion. Given the causal relationship between school funding and student achievement, denying public schools the funds necessary to educate students directly harms student outcomes.
• Vouchers benefit the wealthy at the expense of low-income and rural communities. Vouchers mostly fund students who are already attending private school, and wealthy families are overwhelmingly the recipients of school voucher tax credits—they can even use tax shelters to profit from “donations” to voucher organizations. Further, since vouchers typically do not cover the full cost of private school, low-income families are still unable to afford private school education—even with a voucher—and few rural students have access to private schools. Since many private schools do not provide transportation, low-income students in both urban and rural areas lack affordable and accessible transportation to and from school.
• Vouchers are rooted in racism and fund racial, ableist, anti-LGBTQ, and religious discrimination. Voucher expansion and the broad school privatization movement were born out of racist opposition to school desegregation in the mid 20th century. Additionally, voucher programs divert public funds to private schools that are more racially segregated than public schools and discriminate against students based on their sexual orientation and gender identity, ability, and religion. Most states do not provide nondiscrimination protections for students who attend private schools.
• Unlike public schools, private school voucher programs lack accountability and oversight. A 2020 study found that only about half of states with voucher programs require teachers to have bachelor’s degrees; even fewer states require that teachers are licensed, and fewer still require participating private schools to report graduation rates. Since many states do not collect data on students who use vouchers and do not require reporting on how funds are used, it is difficult to evaluate the impacts of vouchers on student achievement, and there are many examples of fraud and abuse of public funds diverted to vouchers.

Vouchers are unpopular, and the movement to expand them is anti-democratic

Across the country, voters and parents overwhelmingly support improving public education and oppose vouchers and “neo-vouchers” like ESAs and tax credits for private schools. Anti-public education advocates tacitly recognize this reality. Their current political strategy, as they have articulated it, is to focus only on states with Republican-controlled legislatures. The fact that voucher bills that failed miserably in past years have found adequate support more recently is not a coincidence.

Republican governors have sought to change the composition of their state legislatures by electing anti-public education advocates to office and defeating candidates who oppose voucher expansion. Such was the case in Iowa, whose state legislature narrowly enacted an expansive voucher bill this legislative session after similar bills failed the previous two years. Last year’s bill was blocked by rural Republicans who knew their constituents would be harmed by the diversion of public school funds to private schools; in response, Gov. Reynolds endorsed primary challengers to replace them and increase the GOP’s House majority enough to pass the bill this session. The same strategy is being deployed in Texas, where the pro-voucher governor is aligned with wealthy donors committed to unseating Republicans who oppose his agenda.

Vouchers are embedded in a larger movement to dismantle public education that is out of step with parents and voters

Instead of touting the supposed effectiveness or efficiency gains of voucher expansion, advocates have shifted their focus to values-based arguments, like those around school curricula and parental consent. These advocates now frame voucher expansion as a “path to halt woke indoctrination” and “escape government-run education.” Heritage Foundation-backed Lindsey Burke, who testified at Tuesday’s hearing in support of school voucher expansion, has explicitly argued in support of eliminating the Department of Education. Denisha Allen of the Betsy DeVos-founded American Federation for Children, who also testified in support of vouchers, sees the “war against the teachers’ union and the school choice movement” as inextricably intertwined and has called teachers’ unions “cartels” that are “taking students hostage for ransom.”

Yet these extreme views are not widely held. Most parents are concerned about teacher shortages, a lack of respect for teachers, and inadequate funding for public schools. Large majorities of parents and voters do not believe that public schools are going too far to promote a “woke” political agenda. Nonetheless, disingenuous efforts to sow division between parents and teachers have afforded voucher advocates some relevance in the current political moment, buoyed by their alignment with the broader right-wing propaganda machine.

The most vocal institutional backers of voucher expansion are well-funded right-wing groups like the Koch-founded dark money group Americans for Prosperity, the Bradley Foundation, and the Heritage Foundation. The Bradley Foundation has contributed tens of millions of dollars to school voucher advocates, efforts to defund teachers’ unions and unions generally, and groups that promote baseless claims about widespread “voter fraud.” The Heritage Foundation, a prominent right-wing think tank and long-time recipient of Bradley Foundation funding, has publicly parroted Donald Trump’s false claims of widespread voter fraud, and in 2021, the organization’s dark money arm spent more than $5 million on lobbying for a far-right agenda that included aggressive voter suppression tactics in Republican-controlled states.

Voucher expansion is merely one prong in the right-wing agenda to weaken and eventually destroy public institutions, public services, and public power. In the absence of genuine public support for vouchers, voucher advocates are attempting—with some recent success—to manufacture support by buying political favor and stifling the democratic process. As privatization advocates ramp up their efforts in state legislatures across the country, lawmakers, researchers, and advocates for racial and economic justice must recognize the importance of opposing these assaults and supporting collective investments in our schools and communities.

Q. A recent New York Times story about the Obama administration’s plans for school reform concludes with a school superintendent saying, “education will never be the same.” Do you agree with this assessment?

Ravitch: It’s a scary thought. I think public education itself is at risk. On the current course we are on, we will see thousands of public schools turned over to private entrepreneurs. We will see an explosion of privatization.

Q. Education reform and Obama’s Race to the Top grant program (a program for spurring school reform often through increased focus on teacher accountability and charter schools) are receiving a lot of press.  Do you feel these stories accurately describe the state of the nation’s schools and the reforms being proposed?

Ravitch: There is a problem with calling what is happening in schools “reform.” Some articles extol unproven ideas and lack any fairness or balance. My book cites a lot of research showing that charter schools don’t do any better on the whole than regular public schools. If they do not produce consistently better results, why are we investing billions of scarce public dollars to create many, many more of these (charter) schools? And why ignore their likely impact on regular public schools? Proponents claim that competition improves public schools but that certainly has not happened in Milwaukee, where there are vouchers, charters, and regular public schools, and all three sectors have low performance.

Q. The Times article also states that “What the reformers have come to believe matters most (in education) is good teachers.” What do you think?

Ravitch: Of course good teachers are incredibly important, but we won’t get more of them by attacking teachers and reducing their job to the singular goal of raising test scores. The Times article has implicit disdain for the people who work in schools – a suggestion that it’s only the people who went to Ivy League schools who know how to fix things.

To say “we need good teachers” – of course we need good teachers. But their idea of [how to identify and fire] bad teachers is based mainly on test scores. They are making the assumption that schools are overrun with bad teachers and I don’t think that’s true. To have teacher evaluations decided by politicians and legislatures is insane.

Q. Should teachers be held individually accountable?

Ravitch: I have a problem judging teachers by test scores. Test scores should surely be considered by principals as part of teachers’ evaluation, but legislators should not quantify this. They are not competent to do so.  There are many things that cause test scores to go up or down, and it’s not just the teacher.

Part of what is going on is to try to blame low performance on teachers instead of recognizing that poverty is the single greatest determinant of low scores. Not being a native English speaker and being homeless are also major factors.

Testing can have some part in this, but it is a matter of professional judgment by competent and experienced principals, not something that should be legislated or politically determined.

Q. Should teachers have guaranteed lifetime tenure?

Ravitch: Lifetime tenure does not exist. Tenure means the right to due process. But firing people because they cost more is a way to destroy a profession. If you go in for surgery, do you want an experienced surgeon, or a resident? Senior teachers are a valuable part of every school staff. New teachers need their help. If teachers are incompetent, they should be brought up on charges and removed. A far more important problem than removing teachers is teacher attrition: Half of those who enter teaching are gone within five years. Yet the “reformers” ignore this problem, which is largely due to poor working conditions.

Q. The New York Times piece does make the point that many charter schools perform badly. But it also uses the example of one charter school in Harlem that actually shares the same building with a public school, yet has a vastly different school environment and much better student performance. How can two schools that are not only in the same neighborhood, but in the very same building have such vastly different outcomes?

Ravitch: The important point here is that these two schools don’t have the same population. The public school has a much larger population of English-language learners, special education students, and students with disabilities. The only thing they share is the same building.

Q. And why would two schools in such close proximity have such different student populations?

Ravitch: Charter schools, when they are popular, have a lottery. But a lot of parents never even hear about the lottery. In New York City, there is a very large number of homeless students in the population, and very few enroll in charter schools. It is a selective effect. There is a big difference between entering a lottery for a charter school, and going to a public school, where they are required to accept you.

Charter schools can also quietly remove kids. Some of the charter schools that are very successful have a very high attrition rate. They may start with 100 students and end up with 50. Then they say how successful they are but don’t tell you about the students who didn’t make it. 

Ideally, charter schools should collaborate with public schools, not compete with them. Both sectors should coalesce around common goals, funding and sharing ways to help all students succeed.  

Q. What are some of the other problems you see with charter schools?

Ravitch: Some skim away the most motivated students, and many are concentrated in cities in minority neighborhoods. If you look at the nations in the world with the highest performing schools — Finland, Japan and Korea — they have not privatized public education. They have made it better.

Q. In your view, what are the school reforms that are needed?

Ravitch: The most important reform is to have a strong and coherent curriculum in the arts and science, in history and geography. Every high-performing nation has a strong curriculum. And as a society we have to act on the other problems, such as poverty and homelessness, which contribute to poor educational outcomes. We should not punish schools and teachers because they have a high number of kids who are poor or homeless or aren’t native English speakers. We have to do something to help those students have a better life.

When it comes to education policy, President Obama is repeating the most grievous errors of his predecessor, charge a trio of venerable education policy analysts, including one — Diane Ravitch — best known for her past support of conservative positions on testing, accountability, and choice.

As Congress begins to rewrite No Child Left Behind (NCLB), the Obama administration has offered its own vision for how the revised law should look, including a focus on tougher academic standards and more flexibility for schools. But a growing chorus of critics contends that too many of the administration’s policies follow the same punitive cycle of high-stakes testing and accountability ushered in under the presidency of George W. Bush—and that these policies are actually hurting students.

Both President Obama and Education Secretary Arne Duncan have acknowledged the need for better standards and assessments to ensure that students graduate from high school ready for college or 21^st century careers. But critics of their approach toward education reform say it continues to rely on a flawed system of high-stakes exams and accountability measures that has narrowed the curriculum, fails to take into account the various social and economic factors that influence a child’s learning, and does a disservice to those students it purports to help most.

Rather than tinkering around the edges of NCLB, they say, policy makers should rethink the very assumptions that underlie the nation’s education law.

Such concerns over high-stakes testing and accountability aren’t new; they’ve existed since NCLB became law in 2002. But what is new is that the chorus of critics now includes some unlikely characters—including education historian Diane Ravitch, who worked in the Education Department under President George H. W. Bush and was a staunch supporter of the younger Bush’s policies as well.

Ravitch has a new book out called The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education. Its thesis marks a radical departure from her earlier views on education—and in an interview with eSchool News, she explained what transpired to change her mind.

“This represents a big change for me, because for many years I have been associated with things like testing, accountability, charter schools, merit pay, et cetera,” Ravitch said. “But as I saw the evidence accumulating, I began to think … that I was wrong.”

She added: “The Obama administration, although it promised change when it came to office, in effect has picked up precisely the same themes as the George W. Bush administration, which are testing and choice—and I think we’re on the wrong track.”

Watch interview with Diane Ravitch

Ravitch was one of several education experts who spoke out last month during the American Association of School Administrators’ National Conference on  Education against the Obama administration’s continued reliance on high-stakes testing and accountability to drive school reform. Other critics of the president’s policies included Richard Rothstein, a research associate at the Economic Policy Institute and former education columnist for the New York Times, and David C. Berliner, Regents Professor of Education at Arizona State University.

Under the nation’s current accountability system, Ravitch said, “we’re only measuring what we can, and not what matters most.” As a result, she said, we’ve narrowed the curriculum to the exclusion of other important subjects by focusing primarily on making adequate yearly progress in reading and math.

“If you look at what is working in other successful nations, “it tends to be a far more holistic approach to schooling than what we are doing now” in the United States, she declared.

Testing can be effective when used for diagnostic purposes, “but when testing becomes the focus of high stakes for kids and for teachers and for administrators, it has very harmful consequences,” she said. “To judge a teacher or a student based on a test score is like judging a baseball player on one at-bat; Babe Ruth struck out a lot more than he homered.”

Ravitch, who is a research professor at New York University, said she has looked at the National Assessment of Educational Progress (NAEP) scores of both charter and public schools since 2003 and has concluded that charter schools don’t outperform public schools on average.

Charter schools are “skimming off the best kids in the poorest communities, and that’s why they get better results,” she said. “They’re not taking a proportional amount of English language learners, special-ed kids, homeless kids. … Sure, if you cherry-pick the kids, you get better results.”

There is a growing body of evidence to suggest that school choice isn’t going to improve education, she concluded—and, given that struggling schools lose the funding that accompanies students who opt out for other institutions, “it might actually be very harmful to public education.”

The ‘wrong policies’?

Speaking to school superintendents during the AASA conference, Duncan identified three principles that he said would guide the current administration’s approach toward rewriting NCLB: (1) higher standards, (2) rewarding excellence, and (3) a “smarter, tighter federal role” in ensuring that all students succeed.

He also sounded like someone who understood many of the law’s failings.

“I’ll always give credit to NCLB for exposing achievement gaps and advancing standards-based reform. But better than anyone, you know [the law’s] shortcomings,” Duncan told the assembled education leaders. “NCLB allows, even encourages, states to lower their standards. In too many classrooms, it encourages teachers to narrow the curriculum. It relies too much on bubble tests in a couple of subjects. It mislabels schools, even when they are showing progress on important measures.”

Although Duncan and Obama acknowledge NCLB’s problems, their approach does not go far enough in addressing these issues, critics argue.

“Both President Obama and Secretary Duncan talk about the narrowing of the curriculum,” Rothstein said in an interview with eSchool News. “But the policies they’re implementing … are all about improving the quality of math and reading tests. Now, there’s nothing wrong with improving the quality of math and reading tests—but if [that’s] all we do …, [then] we [will] continue, and even exacerbate, this distorted emphasis on only one part of the curriculum.”

Like Ravitch, Rothstein sees huge flaws in the administration’s approach to education reform. He’s part of a group of policy experts called “A Broader, Bolder Approach to Education”, which advocates a different kind of accountability system for the nation’s schools—one that doesn’t rely on test scores as the primary indicator of student achievement and doesn’t create incentives to narrow the curriculum.

The group is hoping to press
ure Congress and the administration “to abandon the failed, test-driven policies of the last decade,” he said.

Watch interview with Richard Rothstein

Federal education policy in the United States today “is driven by a climate of opinion that assumes our schools have been failing,” Rothstein said—and one that assumes teachers are inadequate and have low expectations for their students. Policy makers have come to this conclusion, he explained, by looking at the achievement gap between black and white students, which “hasn’t really budged very much.”

But what they fail to acknowledge is that there has been “phenomenal improvement in both black and white student achievement over the last generation,” he said. “Black student achievement has risen so much in the last 20 years that it’s now higher than what white student achievement was 20 years ago.”

That kind of phenomenal improvement is “not consistent with the story of teachers sitting on their rear ends, having low expectations of disadvantaged children,” he said—and schools could have closed the achievement gap long ago if white students hadn’t made their own vast improvements at the same time.

When we develop policies based on a flawed analysis of the data, “we necessarily develop the wrong policies,” Rothstein asserted, “and that’s what’s going on in Washington today.”

Besides narrowing the curriculum, the climate of high-stakes testing and accountability is detrimental to schools because “it takes no account of the fact that one of the primary drivers of student achievement is the social and economic conditions that children come to school with,” Rothstein said. “Again, both Obama and Duncan acknowledge this; they talk about it frequently—yet their current policy takes no account of this.”

The administration’s plan to stem the dropout rate, for example, seeks to identify the bottom 5 percent of high schools in the country to intervene and turn them around. Yet, given the social and economic conditions that most students from these schools face, “many of these schools are not low-performing at all,” Rothstein said. “They [actually] add great value to the performance of these children.”

Outputs vs. inputs

Arizona State’s Berliner agrees with Rothstein’s assertion that the federal testing and accountability policies that continue under President Obama fail to acknowledge the enormous influence of socio-economic factors on student achievement.

“We have people who say teachers are terrible, or teachers are great, and they’re taking nothing into account about the context those people are working in,” he said. “Out-of-school matters matter.”

Watch interview with David Berliner

Berliner said the U.S. has shifted from a focus on providing equality in the “inputs” of education—family environment, community conditions, and so on—during the Johnson administration to a focus on providing equality in the “outputs” of education (the achievement gap) under the Bush administration, and this approach continues under Obama.

“We stopped worrying about inputs,” he said—and yet, “what’s coming out of schools is still a function of those inputs.”

A key problem with the high-stakes testing approach to education, Berliner added, is that when people’s jobs are on the line, the people get corrupted—and so do the indicators. That’s why we’re seeing schools supply test answers to students, and states lower their standards, and so on.

“If I’m going to lose my job, and I can change a score—I have a family to support, I’m going to change the score,” he said. “If you put people into that position, you’ve messed up one of the goals we have for an American educator, which is to provide a moral compass for our youth—and you’ve set them up to do things that are not good.”

Diane Ravitch says that was the logic that initially led her to support the policies of No Child Left Behind, requiring all public schools to measure student performance through standardized tests.

In the eight years since the act took effect, however, Ravitch said she has come to understand that the policies and the punitive measures put in place for schools failing to meet proficiency requirements were as unrealistic as requiring all cities to become crime-free by a target date, and then shutting down police departments that failed to achieve that impossible goal.

Ravitch, an education historian and former Assistant Secretary of Education in the George H.W. Bush administration, explains in her new book, The Death and Life of the Great American School System, how her thoughts on testing, school choice, and teacher accountability evolved. On March 15, she spoke on a panel at EPI, How Testing and Choice are Undermining Education,  about the damage that has resulted from a heavy focus on standardized tests.

Because of the strong bipartisan desire to improve the country’s educational system, No Child Left Behind won the overwhelming support of Democrat and Republican lawmakers in 2001. But in addition to mandating annual testing in reading and math, the policy contains strong punitive measures that Ravitch now says has left “public education in great peril.” Schools where all students do not meet standards for test scores by 2014 could be closed, and with that deadline fast approaching, it appears that many schools will fall short. Ravitch cited one study projecting that close to 100% of all the elementary schools in California could be deemed failing schools. No Child Left Behind, she says, put in place a set of “totally utopian and unrealistic expectations.”

Nor is the large number of so-called failing schools the only problem. Other panelists  at the March 15 event—Carmel Martin, Assistant Secretary for Planning, Evaluation, and Policy Development at the Department of Education;  Bill Galston, Senior Fellow at the Brookings Institution and White House policy advisor on education in the Clinton administration; and Randi Weingarten, President of the American Federation of Teachers—each stressed that education had suffered from a practice of  teaching narrowly to math and reading tests, while neglecting other curricular areas such as the arts, history, science, and physical education. In addition, in an effort to declare more students “proficient” in math and reading, proficiency standards had frequently been watered down.

“I can get a graduation rate of 100% if you put me in charge of a school,” explained Ravitch. “But some of the graduates will be illiterate.”

 Panelists debated the best way to move forward from the current policy but agreed that future policies should focus less on sanctioning poorly performing schools than on rewarding outstanding performance and recognizing that not all schools could be held to the same set of expectations. Schools in communities with high poverty rates, said the panelists agreed, were particularly challenged.

“Any time we alleviate poverty, we will increase the odds of educational improvement,” said Ravitch.

by Joydeep Roy 

Supporters of charter schools argue that since enrollment in such schools is purely a matter of parental choice and discretion, ineffective charter schools would quickly lose their students and be forced to close down. But this does not appear to be the case. Even though most research shows that charter schools are doing, at best, only slightly better than regular public schools, less than 2% of all charters ever opened have closed due to academic reasons.

A recent report by the Center for Education Reform, a charter school advocacy group, finds that of the 5,235 charter schools opened since 1992, 657 have closed down. Of these 657 schools, only 91–or 14% (see chart)–were closed for “academic reasons,” defined as schools “whose sponsors found them unable to meet the academic goals and performance targets set by the state or written in their charter.”¹ Moreover, the number of charters actually closed for academic reasons is likely to be even lower: close investigations reveal that some charters supposedly closed for academic reasons were in reality closed because of finances, mismanagement, or other organizational problems.²

Notes
1. Allen, Jeanne, Alison Consoletti, and Kara Kerwin. 2009. The Accountability Report: Charter Schools. Washington, D.C.: The Center for Education Reform. February.
2. Carnoy, Martin, Rebecca Jacobsen, Lawrence Mishel, and Richard Rothstein. 2005. The Charter School Dust-Up: Examining the Evidence on Enrollment and Achievement. Washington, D.C.:  Economic Policy Institute and Teachers College Press.