Jeff Bryant writes frequently about education issues. He is based in North Carolina but writes about controversies across the nation. Jeff Bryant is the chief correspondent for Our Schools, a project of the Independent Media Institute. In this post, he explains how universal school vouchers—vouchers for all students, regardless of family income—is wrecking state budgets. The marquee example of vouchers’ fiscal impact is Arizona, where the voucher program is now nearly $2 billion a year.
He wrote:
In 2023, Republican state governors went to unprecedented lengths to enact universal school voucher programs in legislative sessions across the country and made support for these programs into rigid party ideology. Republican Texas Governor Greg Abbott, for instance, went so far as to recall the state’s legislature for a fourth special session, a historically unprecedented action in the Texas Legislature’s 176-year history, according to a November 7 article in the Texas Tribune. According to the report, “[t]he biggest point of contention” is a universal school voucher bill that House Republicans have repeatedly rejected. Previously, Abbott warned any Republican holdouts that they would be challengedfrom within the party in the 2024 primary elections if they didn’t get in line and extend their support for vouchers.
Abbott calls his voucher plan “education freedom,” echoing a term favored by former President Donald Trump’s Secretary of Education Betsy DeVos, who used her office to push for a federally funded nationwide school voucher program.
School vouchers can take on many forms, including tax credit programs—which give tax credits to anyone who donates to nonprofits that provide school vouchers—and so-called education savings accounts (ESAs), which allow parents to withdraw their children from public schools and receive a deposit of public funds into an account that they can tap for education expenses. Abbott is attempting to push through an ESA in Texas.
When voucher programs were initially enacted in early adopting states, such as Florida and Arizona, eligibility was limited to low-income families or to children with special needs or circumstances.
When voucher programs were initially enacted in early adopting states, such as Florida and Arizona, eligibility was limited to low-income families or to children with special needs or circumstances. But the trend over the last few years has been to make these programs open to all or nearly all families. What Abbott is proposing, in fact, would allow all families to apply for vouchers.
Nine states have enacted universal school vouchers as of November 2023, including Arizona, Arkansas, Iowa, Florida, North Carolina, Ohio, Oklahoma, Utah, and West Virginia, according to State Policy Network, a school choice advocacy group. Indiana’s voucher program is “near universal,” as 97 percent of families are eligible under the scheme.
Republicans who oppose universal school vouchers, in Texas and elsewhere, have expressed concerns about diverting tax dollars from public schools, especially in rural communities, to private education providers that have little or no accountability for how they spend the money. They’ve also questioned the constitutionality of giving parents public funds to spend on private religious schools.
But Republican state lawmakers who claim to be strict watchdogs on government purse strings should also be concerned about another consequence of enacting these programs—their potential to quickly run through estimated costs and produce sizable deficits.
According to multiple reports detailed below, states that have been among the earliest to adopt universal voucher programs are finding that their costs are far exceeding estimates primarily due to the high numbers of families taking advantage of the programs. These families mostly never had their children enrolled in public schools.
In state after state, the number of families using vouchers to “escape” so-called failed public schools—an original argument for vouchers—is dwarfed by a larger population of families who already had their children enrolled in private schools and are using voucher money to subsidize their private school tuition costs.
Another large percentage of voucher users are parents who homeschool their children and use voucher funds to cover expenses they would previously have been shouldering themselves. Vouchers also appear to be incentivizing parents with rising kindergartners to choose private schools instead of their local public schools.
Other reports have raised concerns about the financial wisdom of giving parents free sway over how they use voucher money, citing evidence that parents have used the funding to make extravagant purchases or buy products and services that have dubious educational value.
In the meantime, policy leaders and experts alike warn that universal voucher programs are sending states, which are constitutionally obligated to balance their budgets, into uncharted financial waters.
‘It Depends on the State and Is Hard to Know’
Where will funding to cover cost overruns of voucher programs come from?
“It depends on the funding mechanism in the voucher law,” according to Jessica Levin, an attorney and director of Public Funds Public Schools, an organization that opposes efforts to redirect public funds for education to private entities.
“For programs that divert funds earmarked for public schools… the voucher funding would dip further into public school funds and/or appropriations,” Levin explained in an email to Our Schools. “For vouchers that are funded with general revenue funds, more money would come out of the state general fund.”
Funding for Abbott’s proposed voucher plan, for example, draws from the state’s general revenue rather than the main source of funding for K-12 education.
Levin added that there could be other mechanisms to prevent cost overruns, including spending caps written into the voucher law and separate appropriations laws that could limit the total funding.
But in terms of what a state might cut to balance out the impact of voucher costs, Levin said, “It depends on the state and is hard to know.”
So far, Republican lawmakers have either denied the existence of these cost overruns, or they’ve been unclear about where money to cover the deficits will come from.
“I haven’t seen coverage of that question,” said Joshua Cowen, a professor of education policy at Michigan State University, who replied to a query from Our Schools.
Cowen has been an outspoken critic of voucher programs primarily because of their tendency to have a negative impact on student achievement.
Cowen has also expressed concerns about the potential financial impacts of these programs, noting in an April 2023 interview, that “[T]he real issue is that you’re getting the state standing up new budgetary obligations to prop up private school tuition where otherwise [those costs] have been borne by the private sector.”
And he has warned of the dangers of vouchers to incentivize a market for “sub-prime” private schools that would quickly open to get the money but then prove to be unsustainable and just as quickly close.
On the issue of voucher program cost overruns, Cowen told Our Schools, “I assume states have different rules about what amounts to deficit spending. But I’m not sure. Arizona is obviously the massive one.”
‘Arizona… the Massive One’
In Arizona, the first state to pass a universal school voucher program, according to the New York Times, Democratic Governor Katie Hobbs has raised an alarm about the enormous cost overruns coming from ESAs, according to KTAR News.
In a memo issued from her office, Hobbs declared that the voucher program “may cost taxpayers up to $943,795,600 annually, resulting in a potential $319,795,600 general fund shortfall in FY 2024.”
It would appear that these cost overruns would have to eventually be covered by the state’s general fund. According to Common Sense Institute Arizona, an organization that advocates for school vouchers, “The ESA program is fully funded by the state’s general fund.”
For that reason, Hobbs maintained that the impact of these costs will go beyond funding for public schools, KTAR reported. “Public safety, all the big budget priorities are going to be impacted if [the cost overrun] continues to grow at this pace,” she said.
In May 2023, Andrés Cano, who was then the Democratic state representative and House Minority Leader, seemed to agree with Hobbs and told ABC15 Arizona, “We’ll either have to tap into the rainy day fund, or we’ll have to cut core state priorities.”
Despite these unplanned costs, “Republicans who have the majority in the state legislature refused any attempt to cap or cut ESAs,” ABC15 Arizona reported. Arizona’s universal voucher program was created by the state’s former Governor Doug Ducey who called it the “gold standard of educational freedom,” according to the Washington Examiner.
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