Education by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006

Susan L. Aud
Milton & Rose D. Friedman Foundation
April 2007

Do vouchers unfairly drain money from public schools as their opponents claim? No, says the Friedman Foundation's Linda Aud, in this examination of the fiscal impact of 12 voucher and tax-credit programs. Her analysis weighs the amount of per-pupil state funding that districts lose when voucher students leave (voucher money generally comes from state, not federal or local, coffers) against those districts' per-pupil instructional spending. In Cleveland in 2004-2005, for instance, the state withheld $3,750 for each voucher, while the district's per-pupil instructional spending averaged $6,707 (although, it should be noted, the old Cleveland voucher program was cheap and rather inadequate). The school thus generated a savings of $2,958 when the voucher recipient left the district. Multiply that per-pupil "surplus" by the 4,256 Cleveland students who received vouchers, and the district saved over $12 million that school year. (Districts save money in other ways, too--lunch programs, transportation, etc.--but Aud includes only instructional costs to make her estimates as conservative and credible as possible.) The numbers are similar for most other voucher programs, save for Milwaukee, where the district itself bears half the burden of funding its vouchers. Aud also calculates savings at the state level. Although Ohio withheld $3,750 from the district for each Cleveland voucher, for instance, it actually awarded only $2,686 to each student, generating a state-level savings of $1,064 per voucher. When Aud combines district and state savings since 1990 for all the programs she analyzed, she calculates that vouchers have saved nearly $444 million nationally. Critics will naturally claim that those savings exist only on paper; after all, it's hard to realize efficiencies if each classroom merely loses a student or two. But by that line of thinking, the more students that take advantage of vouchers, the better for public schools. Join the debate; read the report here.