My colleague Marty Lueken has a new paper out estimating the fiscal impact of private school choice programs. He does yeoman’s work trying to parse the fixed versus variable costs that schools and districts face and understand the short- and long-term effects of private school choice programs on state funds.

Bottom line: school vouchers save money for state and local taxpayers.

How does this work? It’s important to think about a child leaving with a school voucher the way an accountant would. The child leaving represents a reduction in revenue for a school district, that is, the money that the state appropriates to educate that child. The child leaving also represents a reduction in cost. The district no longer has to pay to educate the child. The state pays for the voucher but no longer has to provide funds to districts for students who leave via the voucher program.

If the reduction in revenue is less than the reduction in cost, the state and school come out ahead. If districts choose not to cut costs, then they end up with more resources per student. K-12 is unique from almost every other enterprise in our society (public or private) because not all dollars follow students when they enroll or leave. When students leave, districts usually keep all local revenue and some or most federal revenue.

(As an aside, it should be noted that this basic logic holds true when students leave for any reason. Yet, interestingly we don’t hear the same caterwauling about kids moving from district to district, only when they want to exit the system entirely. Curious, that.)

When all of the numbers are crunched and all of the beans are counted, most voucher programs provide a fiscal benefit for state and local taxpayers. Even taking into account the short-run fixed costs that schools face that do not vary with enrollment, the average cost of school vouchers is usually less than the average variable cost savings for districts. State and local taxpayers incur a benefit, to the tune of $3,000 per student per year. Cumulatively, that means that the vouchers that Marty studied saved taxpayers north of $400 million in FY 2015 alone.

Return on investment is often a taboo topic in education. Looking at how much an educational intervention costs in light of its benefits can come off as gauche or even cold-hearted. As a result, the fact that school vouchers cost substantially less for the public than the public schools (and even charter schools) that they are routinely compared to is almost always left out of the conversation.

But as my friend Matthew Ladner has written for some time now, we need to get comfortable talking about costs and benefits in government programs. America’s hourglass-shaped age pyramid, with more young people and old people seeking benefits from a smaller set of working-age people, will put a strain on state coffers. Unfunded pension liabilities are going to come due at some point. States like Illinois are the canary in the coal mine, with young teachers contributing 2% of their salary to pay off obligations for older teachers with no expectation of ever getting that back. Absent change, we should only expect more of this.

Throw in an economic downturn that market visionaries like Ray Dalio see on the horizon in two to three years, and things could get ugly. Federal tax cuts (without attendant spending cuts) that are slated to lard up the federal deficit aren’t going to help either, tying policymakers’ hands when they need to respond to different macroeconomic circumstances. Not good.

Polling tells us that Americans want to spend more money on education, but when Americans are informed how much we actually spend, that enthusiasm is tempered. And this is during a time in which confidence in the economy is high and unemployment is low. Change those factors, and the winds could change as well.

I want to be clear. I’m not proposing cutting education funding. In fact, I’m completely open to the idea that we should be spending more on education. I’m generally in agreement with what Sir Angus Deaton said in an Econtalk podcast a couple of years ago, that with respect to education “to make it much better would take more money, but putting more money in will not make it much better.” We’ve got to talk about how that money is spent, where it is being maximized, where it is being wasted, and how we can move the money that we already spend from areas where it is wasted to areas where it can be maximized. If we spend new dollars, they need to go into areas that are more productive.

I’d also like to be clear that I’m not opposed to trying to close the gap between what states spend per pupil on vouchers and what they spend on traditional public schools. Private school choice offers a wide spectrum of benefits. It allows parents to have more control over their child’s learning environment, something that they are overwhelmingly happy about. School vouchers promote a more pluralistic and less technocratic education system that is more in line with the best ideals of our nation. Saving money is nice, but I think a couple of notches from the most important facet. And, limiting the amount of money that follows a child into a school can prevent the kind of capital expenses that new schools need to start up or existing schools need to expand to serve more students.

But in a world where the dominant narrative is that vouchers “drain” money from public schools, these are concerns for another day. Vouchers don’t, quite the opposite in fact. And that is something worth thinking about.

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