School choice is one of the most controversial and hard-fought public policy debates of the past few decades. Most liberals, who get significant funding from public school teachers unions, line up against any form of school choice, while many conservatives favor allowing some form of market to introduce competition amongst schools for education tax dollars.
The argument against school choice always seems to focus on how it would “defund” public schools by “draining” monies away. This argument, however, is based on faulty economics.
School choice comes in a variety of flavors. Some public school districts let residents choose their preferred school within the district; this is the smallest amount of choice. Vouchers allow at least some students to attend a private school and pay part or all of the tuition using a voucher equal to some of the tax dollars that would have been spent on their public education; this is a medium amount of choice.
Finally, education savings accounts (ESAs) allow parents to redirect some share of tax money that would pay for their children’s public school education to private school tuition, tutors, educational enrichment programs, or saved for later educational uses. This is the most possible choice.
Clearly, both vouchers and ESAs involve some tax dollars that were going or could go to public schools being sent to private schools or other educational uses. Voucher programs have generally been rather limited in scope, with numbers of students and dollars capped and the dollars sometimes from private sources or appropriated in such a way as to ensure that public school funding does not decline.
ESAs are quite new, and in the four states in which they operate are restricted to certain classes of students. So far, ESAs have mostly been employed for special needs; only Nevada’s is universal.
The 2012-13 national average for total education spending was $12,296 per pupil, of which $6,693 was designated as spent on instruction (the rest goes to support services, building maintenance, administration, transportation, food services, and capital expenditures).
From the point of view of a school system, we could simplify this by thinking about the instructional cost as the marginal cost of a student, while the rest are fixed costs which likely don’t change if the student numbers drop a little bit. (This is not quite right, but the assumption probably is favorable for the schools, so the truth is even more in favor of school choice than the following numbers suggest.)
In general, if public school funding is reduced by the instructional cost component or less when a student leaves, the school should suffer no financial harm.
Most school choice programs involve some reallocation of money from public schools to other forms of educational spending. This does not leave public schools worse off if the amount of funding they lose per student is less than the marginal cost of educating a student.
In simple terms, public schools would be left with fewer total dollars but more dollars per student. This suggests that opposition is not due to concerns over funding, but likely a simple case of trying to maximize public school enrollment so as to maximize unionized teaching jobs.
Opponents of school choice are not worried about children, either the ones who want to leave or the ones that would stay. They only care about the teachers’ job security. The debate about school choice isn’t about education quality, it is really about jobs and union dues.
(Jeffrey Dorfman is a professor of economics at the University of Georgia and a senior fellow at the Georgia Public Policy Foundation, a conservative think tank.)