The Effects of Vouchers on Public, Charter, and Private School Revenue

• In Event: Universal Private School Choice: Implementation, Organizational Responses, Student Outcomes, and Fiscal Effects

Abstract

At least 17 states now have universal voucher and education savings accounts (ESAs) that promise to shift students from traditional public to private schools (TPS) and homeschooling. One concern with these policies is that this will reduce the resources available in enrollment-losing schools. Our prior work shows that these vouchers/ESAs have already increased private school enrollment by 3-4%. There are also indications that students are using the funds for homeschooling and microschooling that also shift students out of TPS.

The loss in enrollment is not the only potential revenue loss. State governments, which fund voucher programs, may reduce per-pupil funding in public schools to pay for vouchers. (Alternately, they might raise taxes or pull the funding from non-educational programs like healthcare.) 

Using the federal F-33 data, we examine effects on total revenue, per-pupil revenue, and spending. Per-pupil public and charter school revenue could rise even if total revenue declines if a reasonable share of funding comes from relatively fixed local property taxation or if hold-harmless provisions in state funding help to maintain TPS funding. We examine these effects using various difference-in-differences that compare voucher and never-voucher states and, within voucher states, compare districts with more private schools to those with fewer private schools, using methods that account for the staggered design. Data are available through 2024, allowing for post-treatment examination in many of the treated states. To address the staggered designed, we utilize the Callaway and Sant'Anna (2021) method. 

We will also examine spending by category to understand how vouchers may be inducing schools to re-allocate resources. The F-33 data allow us to examine instruction, support services, capital spending, and more. Schools might re-allocate resources to the areas leaders see as high-priority or change spending as a competitive response to vouchers/ESAs, to make their schools more attractive to students on the margin of private school switching. We might also expect TPS to spend less on capital given the uncertainty vouchers/ESAs create regarding their future enrollment.

We will also attempt to address revenue and spending in charter schools though that analysis is complicated by the way Local Education Agencies (LEAs) are defined and how these data are reported. Charter schools are often not their own LEAs and the accuracy of reported data is suspect.

Author

• Douglas N Harris, Tulane University
  Presenting Author