Rapidly Expanding School Voucher Programs Pinch State Budgets

Introduction to the Issue

In submitting her updated budget proposal in March, Arizona Gov. Katie Hobbs lamented the rising costs of the state’s school vouchers program that directs public dollars to pay private school tuition. Characterizing vouchers as an “entitlement program,” Hobbs said the state could spend more than $1 billion subsidizing private education in the upcoming fiscal year. The Democratic governor said those expenses could crowd out other budget priorities, including disability programs and pay raises for firefighters and state troopers.

The Concerns of Budget Experts

It’s a dilemma that some budget experts fear will become more common nationwide as the costs of school choice measures mount across the states, reaching billions of dollars each year. “School vouchers are increasingly eating up state budgets in a way that I don’t think is sustainable long term,” said Whitney Tucker, director of state fiscal policy research at the Center on Budget and Policy Priorities, a think tank that advocates for left-leaning tax policies.

Understanding Vouchers and Scholarship Programs

Vouchers and scholarship programs, which use taxpayer money to cover private school tuition, are part of the wider school choice movement that also includes charter schools and other alternatives to public schools. Opponents have long warned about vouchers draining resources from public education as students move from public schools to private ones. But research into several programs has shown many voucher recipients already were enrolled in private schools. That means universal vouchers could drive up costs by creating two parallel education systems — both funded by taxpayers.

Arizona’s Experience with Vouchers

In Arizona, state officials reported most private school students receiving vouchers in the first two years of the expanded program were not previously enrolled in public schools. In fiscal year 2024, more than half the state’s 75,000 voucher recipients were previously enrolled in private schools or were being homeschooled. “Vouchers don’t shift costs — they add costs,” Joshua Cowen, a professor of education policy at Michigan State University who studies the issue, recently told Stateline. “Most voucher recipients were already in private schools, meaning states are paying for education they previously didn’t have to fund.”

Proponents’ Perspective on Vouchers

Voucher proponents, though, say those figures can be misleading. Arizona, like other states with recent expansions, previously had more modest voucher programs. So some kids who were already enrolled in private schools could have already been receiving state subsidies. In addition to increasing competition, supporters say the programs can actually save taxpayer dollars by delivering education at a lower overall cost than traditional public schools.

Budget Concerns and the Future of Vouchers

One thing is certain: With a record number of students receiving subsidies to attend private schools, vouchers are quickly creating budget concerns for some state leaders. The rising costs of school choice measures come after years of deep cuts to income taxes in many states, leaving them with less money to spend. An end of pandemic-era aid and potential looming cuts to federal support also have created widespread uncertainty about state budgets. “We’re seeing a number of things that are creating a sort of perfect storm from a fiscal perspective in the states,” said Tucker, of the Center on Budget and Policy Priorities.

Examples of Voucher Programs and Their Costs

Last year, Arizona leaders waded through an estimated $1.3 billion budget shortfall. Budget experts said the voucher program was responsible for hundreds of millions of that deficit. A new universal voucher program in Texas is expected to cost $1 billion over its next two-year budget cycle — a figure that could balloon to nearly $5 billion by 2030, according to a legislative fiscal note. Earlier this year, Wyoming Republican Gov. Mark Gordon signed a bill expanding the state’s voucher program. But last week, he acknowledged his own “substantial concerns” about the state’s ability to fund vouchers and its public education obligations under the constitution.

Federal Support for Voucher Programs

Voucher proponents, who have been active at the state level for years, are gaining new momentum with support from President Donald Trump and congressional Republicans. In January, Trump ordered federal agencies to allow states, tribes and military families to access federal money for private K-12 education through education savings accounts, voucher programs or tax credits. Last week, Republicans on the House Ways and Means Committee voted in favor of making $20 billion available over the next four years for a federal school voucher program.

Debate Over the Sustainability of Vouchers

Martin Lueken, the director of the Fiscal Research and Education Center at EdChoice, a nonprofit that advocates for school choice measures, argues school choice measures can actually deliver savings to taxpayers. Lueken said vouchers are not to blame for state budget woes. He said public school systems for years have increased spending faster than inflation. And he noted that school choice measures make up a small share of overall state spending — nationally about 0.3% of total state expenditures in states with school choice, he said.

Conclusion

The expansion of school voucher programs across the United States is posing significant challenges to state budgets. While proponents argue that vouchers can increase competition and deliver education at a lower cost, opponents warn that these programs are unsustainable and divert crucial funds from public education. As the debate continues, it is essential for policymakers to carefully consider the long-term implications of voucher programs on state finances and the overall quality of education.

FAQs

• Q: What are school vouchers, and how do they work?
  A: School vouchers are programs that use taxpayer money to cover private school tuition, allowing students to attend private schools using public funds.
• Q: Why are school vouchers considered a concern for state budgets?
  A: School vouchers can add significant costs to state budgets, especially if they create parallel education systems where both public and private schools are funded by taxpayers.
• Q: Do voucher programs save taxpayer dollars?
  A: Proponents argue that vouchers can deliver education at a lower cost than traditional public schools, potentially saving taxpayer dollars. However, opponents point out that vouchers often fund students who were already attending private schools, thus adding new costs rather than shifting existing ones.
• Q: How widespread are school voucher programs in the United States?
  A: Washington, D.C., and 35 states offer some form of school choice programs, with 18 states having voucher programs that are expansive enough for virtually all students to participate, regardless of income.
• Q: What is the federal stance on school voucher programs?
  A: There is growing federal support for school voucher programs, with President Donald Trump and congressional Republicans backing measures to expand access to federal funds for private K-12 education through vouchers and other means.