Saving Money and Improving Education: How School Choice Can Help States Reduce Education Costs

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Historically, elementary and secondary educationhas been the largest item in state budgets.During the past three decades, state spending onpublic education has grown both in terms of revenuesspent per pupil and as a percentage of totalpersonal income. Spending on K–12 education isexpected to continue to rise during the next fewyears, mainly because of the increased number ofteachers and other school personnel that will beneeded to meet increased enrollment.

In view of the large share of state budgetsdevoted to public education and the cost increasesexpected in the future, it is appropriate to askhow state policymakers might reduce the rate ofgrowth of local and state spending on education.One of the most promising means for doing so isschool choice. To demonstrate the potentialimpact of school choice on state budgets, thispaper draws from legislative and independentevaluations of the fiscal effects of such programsin the states that have enacted or are contemplatingenacting them.

Results from existing programs in Arizona,Milwaukee, Cleveland, Florida, Pennsylvania,Maine, and Vermont indicate that school choicemakes fiscal sense. In addition, analyses of proposedschool choice programs in Utah, SouthCarolina, New Hampshire, Baltimore, andVirginia conclude that those programs wouldsave money and give an idea of the savings thatcould result from similar programs in otherstates.

Thus far, much of the debate over schoolchoice has focused on the educational benefits itcould bring. It can bring significant fiscal benefitsas well.