News Release

October 4, 2005

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School Choice Makes Sound Fiscal Sense
Results show reduction in education costs and improvements in quality

WASHINGTON -- Spending on K-12 education accounts for the largest share of state budgets, nearly one-quarter of state expenditures in 2004. As the cost of education skyrockets, states are forced to spend even more on public schools regardless of the effect increased funds have on education quality. A new study by the Cato Institute argues that the answer to burgeoning education costs is school choice.

In "Saving Money and Improving Education: How School Choice Can Help States Reduce Education Costs," David Salisbury, the Cato Institute's director of the Center for Educational Freedom, shows how school choice can reduce education spending and bring significant fiscal benefits to states.

Utilizing data from school-choice programs in Arizona, Milwaukee, Cleveland, Florida, Pennsylvania, Maine and Vermont, Salisbury asserts: "On average, public schools cost 42 percent more than private schools for comparable services." Thus, allowing an increasing number of students to attend private schools at less cost than is spent per pupil in public schools makes sound fiscal sense.

By adopting school choice programs, states can avoid tax increases and budget cuts in other areas. Further school choice programs free up money for states to spend on those students that remain in public schools or to return to taxpayers in the form of a tax cut.

Policy Analysis No. 551