With Record Spending on K-12 Education, the Fiscal Argument Against School Choice is Even Weaker
Since the start of the Covid-19 pandemic, the federal government has injected an unprecedented amount of funding into public education, allocating about $200 billion for K-12 school districts through three separate spending packages. For context, federal education revenues totaled only $57 billion in 2017-18, or about $1,134 per student.
This massive influx, combined with better-than-expected 2020 tax revenues in most states, means that school district coffers should be well-stocked through at least 2024, by which time the bulk of federal dollars must be spent. The American Rescue Plan alone will provide about $2,400 per pupil, with some states and districts receiving considerably more.
The pandemic has exposed the dire need to modernize public education. While remote schooling has been a difficult transition for many families, other parents have realized that online learning or similar modes of nontraditional schooling work better for their students. States should be considering how they can serve families that want to customize their children’s education after the pandemic passes. Unfortunately, the strings attached to federal dollars largely prohibit states from doing so and will likely result in more of the same programs, interventions, and staffing decisions that have upheld the status quo for decades.
But if there’s a silver lining for school-choice proponents, it’s that a common criticism levied against them – that choice programs “drain” funding from public education – should be settled for good.
To be sure, the fiscal effects of choice programs on state and local budgets are complex, and enrollment declines can, in fact, disrupt district finances.
State school finance systems are stuck in the 20th century and simply weren’t designed to let education dollars follow a child who is not attending his residential school district. This reality forces state lawmakers to make separate appropriations for school-choice programs, which might put pressure on state budgets.
And at the local level, districts lose funding when students leave for choice programs and sometimes face budgetary decisions difficult to navigate in the short-term – including dealing with fixed facilities costs and steadfast opposition from teachers’ unions on even minor changes in staffing strategies.
But despite these considerations, the evidence shows that school-choice programs can be designed in ways that save taxpayers money. Furthermore, school districts have the ability – though not always the will – to optimize operations in lieu of enrollment declines, even in the short term.
Yet this hasn’t stopped choice opponents from claiming otherwise. For example, Kentucky governor Andy Bashear recently vetoed school-choice legislation (though he was eventually overridden by the state’s legislature), claiming that it would “greatly harm” public schools by diverting money from them. Never mind that the program costs just $25 million, compared to Kentucky’s $8.5 billion education revenue stream.
Now it’s more obvious than ever that this type of argument no longer applies. Public education spending was on the rise even before the pandemic, and with new federal investments, district leaders will no longer have an excuse to avoid budgetary decisions that set them on a responsible fiscal path – a necessary course of action in any case, regardless of whether choice programs expand.
Importantly, districts have a clean slate to reconfigure operations and plan for longer-term enrollment shocks, since it’s increasingly clear that many families may not return to their neighborhood schools for reasons unrelated to choice programs. This means districts not only spending temporary dollars in ways that won’t leave them with bloated obligations once funding dries up (e.g., avoiding additional hires and salary commitments), but also making sound strategic decisions.
While it’s true that districts face increased costs associated with reopening and that targeted investments must be made for kids who were left behind by remote learning, the overwhelming federal response – with possibly billions more on the way – dwarfs what states typically spend on school-choice programs.
For instance, Arizona – with one of the most robust choice environments in the country, at an annual cost of $235 million – will receive about $2.6 billion for its public schools from the American Rescue Plan.
Even without expanded school choice, many districts will have to adjust to a new enrollment reality, and future budget decisions should reflect this. Regardless, it’s clear that with record spending on public education, policymakers should scoff at the claim that giving choice to families drains education dollars.
