Universal voucher programs have, in many states led to substantial budget stress (Baker, 2024;[1] Hager, 2024). Initial cost estimates in Florida were that the program would cost between $200 and $700 million, but by the 2023-24 school year, those costs had exploded to between $2.8 and $4.2 billion (Lieberman, 2023). Griffith and Burns (2024) explain that in Arizona “About 2.4% of Arizona’s school-age children took advantage of the ESA program in 2022–23, at a total cost of $587.5 million, which is a $398.7 million (211%) increase over the cost of the more targeted voucher the previous year” in 2022-23. Those costs have only continued to grow.

Some confusion exists in the public sphere as to how a voucher program for which the average voucher or ESA payment is less than the average per pupil expenditure in public districts could possibly increase total state expenditures on education? If a student leaves a district that spends $15,000 per pupil on that student, and takes a voucher for $8,000, that should naturally save $7,000 per pupil for each child who switches. But that’s a dreadful oversimplification in a vacuum. For example, Table A1 lays out more realistic numbers, compiled from a variety of sources, for Florida and Arizona. In Florida, just under 3 million children attend public districts and 300 to 400 thousand attend private schools, a higher share than many states. The state provides vouchers of $8,000 for private schooling and the average district expenditure is just over $10,000 per pupil. The average state funding per pupil, however, is less than half that amount, so the state funding for a voucher is greater than the state funding per pupil that flows to districts. The same is true in Arizona.

But the bigger piece of the puzzle is that most of the vouchers are being taken up by students already attending private school (nearly 70% of voucher recipients in the most recent cohort, or over 20% of current private school enrollments). The share of public enrollments shifting to private schools using vouchers is about 1.3%. So, even if there is “savings” to the public school system for the small number of switchers, it’s not much, and not immediately realized. More discussion on this point follows in our discussion of efficiency. 

The increase in state funding amounts to short run net (minus savings from those switching to private schools) increases in state spending around 7%, which is an unprecedented increase in state spending for these states – nearly a billion dollars for a single entering cohort in Florida and over $300 million for a single entering cohort in Arizona. But these cohorts come one after another and layer on one on top of another with accumulating annual gross increases in spending in the billions – above and beyond what was being spent previously in state aid to students enrolled in public schools – only a small share of whom take the voucher and run (See Table A1).

Why this matters

Increased public expenditure on k-12 education is not itself problematic, and can in fact be a good thing, especially in states like Arizona and Florida that have historically under-invested in public schooling. But increased public expenditure warrants careful scrutiny. When public, taxpayer dollars are spent:

1. Those public expenditures should advance equity goals;
2. Public spending should be done as efficiently as possible (while advancing equity goals);
3. With public expenditures, should come accountability, including transparency, with particular attention to equity and efficiency goals.

It would certainly be foolish to spend additional taxpayer dollars on programs that exacerbate inequality and lead to lower outcomes, especially where more efficient and more equitable alternatives exist. For example, Rauscher and Shen (2022) found that investing new school spending in higher poverty public school settings has substantially greater effect than investing the same dollar in lower poverty settings. Jackson and Mackevicius (2023) found the same across several studies. But, more recently adopted and expanded voucher programs, drive public expenditures to higher income families whose children already attend private schools, and on average, lead to lower (and less equitable) outcomes:

• Not only are most participants in these programs already enrolled in private school but they tend to be from the highest income brackets. That is, the universal vouchers are exacerbating inequity rather than improve equity.[2]
• Further, subsidies are often going to schools that engage in discriminatory admissions of students, creating inequality of access.[3]
• To the extent that researchers have studied and measured the academic outcomes of these programs, they have been dismal, yielding more damage to student outcomes in reading and math than major national disasters or the recent global pandemic.[4]

Why is this all occurring unchecked? Precisely because it is unchecked – Because there exists no accountability for the outcomes produced or for equitable access to quality choices for all children and families. Public dollars should be spent in the public’s interests, and to know that they are, we must evaluate the outcomes of that spending.

Designing more Equitable and Efficient Voucher Programs (or at least less inequitable and less inefficient ones)

Many inefficiencies and inequities that arise from school voucher programs are unavoidable. These should be addressed up front, before any such program is adopted. There just aren’t fair and equitable markets for schooling in every location and providers available for every child, nor will there ever be. Expanding choice increases enrollment volatility, decreasing district ability to centrally plan for efficient allocation of capital space (assigning kids to buildings) or human resources (assigning teachers and administrators to schools), or to plan for transportation. To the extent that fewer children are transported to local schools on buses, more cars are on the road, often for longer distances, during school drop off and pick up times.

Choice programs require entirely new administrative layers to both manage financial applications, distributions and enrollments. Setting aside these unavoidable structural inefficiencies of choosing choice, there are at least a few steps states can take to ensure that the additional public dollars provided for expanded choice at the very least, do less to expand inequality and increase inefficiency:

Vouchers should be means tested and tuition capped: Recent evidence from universal voucher programs suggest that from an equity perspective, providing the same voucher rate regardless of income simply induces inequality and permits institutions to raise tuition. Both should be regulated toward the goal of equity. Affluent families already have freedom of choice. If vouchers are being provided in the name of freedom of choice, they should be scaled by income and institutions accepting income qualified applicants should be subject to tuition rate regulation for those applicants. This includes fully financing the needs of children whose families have the greatest financial needs, including food and transportation costs, to the extent possible (and within equitable, efficient choice zones). These latter costs could be covered by means tested ESAs, while tuition costs would be supported with vouchers.

Voucher programs should be targeted toward markets where they can efficiently and equitably operate: Choice doesn’t work everywhere. Choice doesn’t work where there are no choices. Choice rarely yields equitable access anywhere. Even in more densely packed metropolitan areas, many low-income neighborhoods lack accessible choices and transportation to more distant choices comes with additional costs. States should establish parameters, and ensure infrastructure for equitable, efficient choice zones. Earlier voucher programs which yielded more positive outcomes for participating students operated in specific markets, providing means tested vouchers, with schools accepting students without additional tuition expense.   

Market Entry for Participating Schools: States must impose some statutory and regulatory standards on which schools may enter the choice market place. Availability of qualified schools in the marketplace should, in part, determine whether a viable marketplace exists.  State statutes and regulations should cover three areas:

Regulations on access: Participating schools should abide by non-discrimination policies for student admission, regarding race, ethnicity, national origin and religion.

Guarantees of rights: Participating schools should be required to abide by constitutional protections for which they would be otherwise exempt, including due process rights in cases of disciplinary actions, protection of free speech rights and free exercise of religion, protection against unreasonable searches and protection against discrimination (while in attendance), per standards established in case law pertaining to public schools.

Financial transparency and solvency: States should establish standard formats for the reporting of institutional revenues, expenditures, assets and liabilities, which will offer greater detail than non-profit tax returns, and be inclusive of participating religious providers. Financial condition should be evaluated as a condition for participating in the choice marketplace.

Ongoing oversight of Participating Schools

Establishing parameters for market entry is a starting point, but participating institutions must be subjected to ongoing oversight. This includes all institutions participating in any regional choice portfolio, from district schools, to charter schools and voucher receiving private schools. Oversight should include:

Financial transparency and solvency: It is in the public’s interest and the children’s interest to oversee the financial condition of schools. School closures most often result from fiscal stress, often mid-year, causing massive disruptions and irreparable harm to student learning. State officials cannot evaluate financial solvency and risk without the reporting requirements established above. The taxpayers’ dollars are at stake when any school has been funded with a share of those dollars and ceases to operate before fulfilling the duties associated with those dollars.

Student outcomes: All schools receiving state financial assistance should be required to participate in a system of state assessments which address basic competencies in reading, mathematics, civics/social studies and science. These systems should be less time consuming and burdensome than existing state assessment systems. Participating institutions may be provided the option to submit results from other standardized assessments for which statistical concordance is available. Institutions should also be required to report data on cohort progression and graduation rates, as well as disciplinary action including suspensions and expulsions. 

Curricular transparency: While we believe one of the benefits of choice is curricular specialization and flexibility, we also believe that both those making the choices and the taxpayers support the choices should have full access to the curriculum and materials being used/offered. This is one way in which the public can evaluate whether the broader public interests are being met and have a voice in the political process which governs the expenditure of taxpayer dollars. It should not take tedious, school by school investigative reporting as done by Klein (2017)[5] to uncover the providers of curricular materials used by private schools accepting public financing. States should maintain a searchable database. This would also enable more transparent market choices to be made by parents on behalf of their children.

Final Thoughts

A common retort among voucher and school choice advocates is that we should “Fund the child, not the system.” This claim is often used to imply incorrectly that it’s all about letting each parent take back their supposed tax dollars and spend them where they wish. First, it is not only parents who contribute to the pool of tax revenue, but rather a much larger “public.” Second, all contribute in different amounts. There is no basis whatsoever in assuming that each child is owed a specific share of the public’s tax dollars without public say, or interest in the matter. Such is the basis of democratically governed public-school systems – the basis in funding a system of schools that serve the children, rather than funding the child, per se. Redistributing the public’s funds to each child to be educated at the behest of his/her/their parents’ preferences presumes the sum of these collective, but pluralistic choices to be at least equal to more direct investment in the collective public interest. Human capital theory suggests otherwise.

Others have advanced the oversimplified view that we should fund a “system of (great) schools” rather than an implicitly mediocre “public school system,” wherein the former speaks to the mixed method (portfolio, sector agnosticism, etc.) of providing vouchers for private schools, state authorization of charter schools (often privately managed) and public district and magnet schools.  Importantly, providing a system of great schools involves a role for government accountability over those providing educational programs and services. However, lost in this conversation has been the diminished ability for government to regulate certain practices of non-government schools, especially where those regulations intersect with religion (Green, Baker & Eckes, 2024).  This is exactly what I am outlining and advocating for in this post – the appropriate regulatory framework for ensuring that a system of schools is held to some standards.

Finally, voucher advocates often argue that the precedent for providing vouchers in k-12 education is well established in U.S. higher education, through programs like Pell Grants and in the U.S. Healthcare system, which relies primarily on public subsidies for private healthcare providers, and choice of providers. Pell Grants are means tested and equity oriented. So too are Medicaid programs. Still, both are woefully insufficient at improving equity of access in U.S. higher education or healthcare access. Neither, the U.S. healthcare nor the U.S. higher education system are the models of equity and efficiency to which we should aspire for our children and future generations.

[1] https://nepc.colorado.edu/review/calculator

[2] https://www.brookings.edu/articles/arizonas-universal-education-savings-account-program-has-become-a-handout-to-the-wealthy/

[3] https://www.orlandosentinel.com/2020/01/24/not-welcome-gay-students-parents-are-denied-service-in-floridas-publicly-funded-voucher-schools-commentary/

[4] https://www.brookings.edu/articles/research-on-school-vouchers-suggests-concerns-ahead-for-education-savings-accounts/

[5] https://www.huffpost.com/entry/school-voucher-evangelical-education-betsy-devos_n_5a021962e4b04e96f0c6093c?ufa=

Jackson, C. K., & Mackevicius, C. L. (2024). What impacts can we expect from school spending policy? Evidence from evaluations in the United States. American Economic Journal: Applied Economics, 16(1), 412-446.

Rauscher, E., & Shen, Y. (2022). Variation in the relationship between school spending and achievement: Progressive spending is efficient. American Journal of Sociology, 128(1), 189-223