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National Review Online


The Smart Fiscal Choice

January 21, 2009

By Marcus A. Winters

Vouchers reduce state expenditures on education, with no ill effects on student achievement.

Thanks to the financial crisis, every state in the union is trying to think of ways to save money without dramatically reducing government services. The dilemma is most painful in public education�which is one of the biggest expenditures in any given state, yet one of the most difficult to reduce: Children pay the price, in both their present learning environment and their future earning power.

There is, however, one approach to education reform that can avoid such trade-offs. School vouchers allow states to shrink expenditures at no cost to educational quality. In fact, quality probably rises under a voucher program.

The primary reason that vouchers save states money is that private schools cost less than public schools. According to U.S. Department of Education data from 2003�04, the most recent period for which figures are available, the average private-school student paid $6,600 in tuition; 85 percent of them paid less than $10,000. In contrast, the average per-pupil expenditure for public schools in the U. S. in that same year was $10,561. So while an individual student using a voucher decreases a state�s total public-school budget by $6,600 on average, their schools have one fewer student to teach. Assuming per-pupil spending remains constant, that voucher saves the state about $4,000.

The magnitude of the cost savings depends on the program. University of Arkansas professor Robert Costrell recently found that the 18,500 students using vouchers in Milwaukee—just 2 percent of students in Wisconsin—saved state taxpayers about $31.9 million last year alone. A new report by a special unit of the Florida legislature finds that the state's corporate-tax-credit voucher program (under which corporations can redirect some of their taxes to a modestly funded voucher program for low-income students) saved state taxpayers $1.49 for every dollar lost to the tax write-off.

Voucher programs for disabled students�the most expensive students in any school system�provide even more opportunities for cost savings. For example, Florida's McKay Scholarship Program offers vouchers worth either what the publics chool system would have spent on the disabled child, or the child's private-school tuition, whichever is less. Last year, the nearly 20,000 disabled students using a McKay voucher received an average scholarship of $7,295. That sum is far below the state's average expenditure for a disabled student; in fact, it's less than the state spends on teaching a regular-enrollment student in a public school.

But doesn't some voucher money go to students who would have attended private school anyway? And isn't that an unnecessary expenditure? Yes, but this cost does not outweigh the benefit of school vouchers. One way to measure it, Costrell points out, is to look at students who apply for randomly assigned vouchers but don't get them. About 10 percent end up attending a private school without the voucher. The savings realized from the 90 percent of students who would not have paid private-school tuition in the absence of a voucher—and instead would have obtained a more expensive public-school education—exceed the cost of giving vouchers to this 10 percent, Costrell finds.

While saving money is nice, we wouldn't want to adopt voucher programs if they were harmful to students. Thankfully, an expansive body of research suggests that vouchers probably benefit all students as a whole, and at the very least do no harm.

All but one of the studies utilizing a random-assignment design—the gold standard of social-science research�find that vouchers offer at least some academic benefit to the students who use them. Most studies also find that competition with private schools makes public schools better, though some researchers disagree. However marginal the positive effect that vouchers have on student performance, only teachers' unions and their political allies—certainly no serious researchers—still argue that vouchers harm student achievement in public schools.

In his inaugural address, President Obama suggested that the nation's present fiscal straits will require Americans to be open to changes that bring about more effective government. Let's hope that holds true for education. Because even the most skeptical reading of the existing research indicates that vouchers provide the same quality of schooling as public schools do, for far fewer dollars. If only we could find more such policies.

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