April 15 of every
year usually brings news stories about taxes and fiscal discipline,
or the lack thereof, in government. On April 15 of this year,
however, the most interesting news story of the day went against
the grain: the D.C. Opportunity Scholarship Program's second annual
lottery generated so much interest that it produced two applicants
for each available slot.
What does that have to do with sound fiscal policy? Consider that
Washington's public schools spend $5,830 more of taxpayers' money
per student, at least, than the private schools that take students
with opportunity scholarships.
On April 14, 2005,
just the day before the D.C. Opportunity Scholarship Program
announced its results, the National Center for Education Statistics
(NCES) released its latest report on education spending. According to the NCES
rankings, D.C. Public Schools are spending $13,330 per pupil this
year, the highest in the continental United States.
Washington's
public schools have little to show for that money, as the most
recent National Assessment of Educational Progress test scores
illustrate. D.C. consistently has some of the lowest achievement
statistics in the nation.
School choice
programs, like the D.C. Opportunity Scholarship Program, are a way
to increase academic performance, according to several evaluations
to date.
When public schools don't make the grade, school choice programs
are good social policy.
What is often
overlooked, however, is that choice programs are good fiscal
policy, as well. Consider the example of Washington, D.C., again.
The maximum opportunity scholarship-$7,500-is less than 60 percent
of what Washington's public schools spend on a student.
What if a similar
scholarship program were available to just 10 percent of the public
school students in the eight states that spend the most money on
education, over $9,000 per pupil on average? More specifically,
-
How many
students would be affected by such a policy?
-
How much money
would these eight states and districts save?
-
Finally, is
there sufficient capacity in private schools to absorb the new
students?
School Choice and
High-Educational Spending States
Table 1 shows the
eight states with the highest median per pupil educational spending
in the United States. While most of these states are in the
relatively high-cost Northeast, not all are. Some of these states
have large student bodies, while others are smaller. In total,
these eight states educated some 6.2 million students in the
2001-02 academic year.
If only ten
percent of these students took advantage of scholarships similar to
the ones in the D.C. program, more than 621,000 students would move
from public to private schools within their states. This analysis
assumes that the scholarships would be worth 60 percent of the
median current-year expenditure per pupil-or a bit more expensive
than in Washington. The savings per-pupil would be great, 40
percent; in the aggregate, the savings would be greater still.
Connecticut, for
example, would save nearly $3,900 per student. While Connecticut's
taxpayers currently spend $9,737 per student in the traditional
public schools, the educational scholarship would cost only $5,842.
If 10 percent of Connecticut's student body-a little more than
54,000 students-moved from the state's public schools to private
schools, the state's taxpayers would save more than $211 million
per year.
As Table 1 shows,
these eight states could save a total of $2.6 billion by offering
students opportunity scholarships similar to those now available in
Washington. New York, because of its large student population,
could save more than $1.2 billion itself.
Some critics argue
that private school capacity will not rise to meet student demand
so quickly. In light of the history of long-standing programs such
as in Milwaukee and more recent experience in Washington, D.C.,
this criticism lacks much basis. In Washington, for
example, some 50 private schools made space available for students
with opportunity scholarships. Experience like this
shows that the supply of private school seats rises to meet
demand.
Conclusion
Educational choice
can improve educational achievement and states' bottom lines. Not
only do choice programs help students from lower-income families
attend schools that they otherwise might not be able to attend, but
they can also save money in the process. This should come as no
great surprise; after all, it was a Nobel-prize winning economist,
Milton Friedman, who first advocated such scholarships 50 years
ago. A record number of
state legislatures have considered school choice legislation this
year, indicating that such plans are gaining in popularity. More should follow suit
to make similar opportunities standard across the country.
Kirk A. Johnson,
Ph.D., is Senior Policy Analyst in the Center for Data
Analysis at The Heritage Foundation.