During the last session of the Texas Legislature, Governor Greg Abbott promised to veto any school choice bill that did not include an expansive universal voucher in the form of an Education Savings Account (ESA). While such bills emerged in both the regular session and subsequent special sessions, they were defeated by a coalition of rural Republicans and Democrats.
When House Public Education Chairman, Rep. Brad Buckley proffered an omnibus funding bill in the fourth special session with a Governor-approved universal ESA type voucher in it, the voucher was stripped from the bill with the passage of an amendment offered by Rep. John Raney from Bryan, Texas.
A major concern about the voucher was its long-term budgetary cost. While the cost of vouchers in Buckley’s bill, (HB1) was estimated at around $500 million, some in Austin cringed at the potential budgetary ramifications if more families began using the voucher.
Former State Representative Paul Colbert says, “regardless of any temporary limitations that might be initially applied to a Texas voucher program, the governor has made it clear that his goal is to provide ESAs to every child in the state.” Colbert , who spent 12 years in office, served as the Texas House Public Education budget chair and Appropriations member and as the research director of the Texas Senate Education Committee, indicates that the cost to the state could be astronomical if more people use the voucher. “Last year,” says Colbert, “the website of the Texas Private School Association said their member schools enrolled 250,000 students. The website for the Texas Home School Coalition claimed that 750,000 students were being home-schooled. Adding those two together means that about 1 million students were in private primary and secondary education in Texas.
If each of these students were to receive the $10,500 ESA voucher proposed last year, that would cost $10.5 billion of our state tax dollars per year, or $21 billion in the biennial (2-year) budget. That is without a single child leaving a public school for private education, and it would bankrupt the state. Plus, if just 1 percent of current Texas students did leave, public schools would lose over $1 billion per biennium in state funding.
Multiple states that adopted “limited” voucher programs have seen them balloon far beyond their estimated costs as those limits have been lifted. Given the goals of our state leadership, that would surely happen here.”
While Colbert’s concerns may sound exaggerated to some, consider that Arizona’s voucher experiment has since caused a budget meltdown. The state this year faced a $1.4 billion budget shortfall, much of which was a result of the new voucher spending. Data shows that voucher use in this state is higher among wealthier families, leading to something social scientists call the Matthew Effect: Those with more resources continue to accumulate advantages, while those with less are further marginalized. Seventy-five percent of Universal ESA vouchers go to students who were already in private school and never previously attended public school.
Democratic Arizona Governor Katie Hobbs has said of her state’s universal education savings account program: “The school voucher program is unaccountable and unsustainable. It does not save taxpayers money, and it does not provide a better education for Arizona students.” The U.S. News and World Report currently ranks Arizona 48th in public K-12 education.
Universal voucher programs have led to budgetary stress in other states as well. Initial cost estimates in Florida were that the program would cost between $200 and $700 million, but by the 2023-24 school year, those costs had exploded to between $2.8 and $4.2 billion.
Enrollment in Indiana’s private-school voucher program surged to 70,095 students in 2023-24 – a 31 percent increase compared to the previous year. The state paid $439 million in tuition grants to private schools — 40 percent more than in 2022-23, according to a state report by the Indiana Department of Education. While vouchers are often touted as a civil rights issue, participation in that state is around 60 percent white students.
Josh Sanderson, Executive Director of the Austin-based Equity Center, is well acquainted with Texas school finance issues. He says that vouchers will only exacerbate an existing issue with education funding for the state. “Regardless of one’s philosophical stance on using public resources to fund private schools,”Sanderson says, “there is one undeniable aspect of creating a new voucher/ESA entitlement that is entirely problematic: That is the fiscal problems this program will inevitably cause the state and, ultimately, taxpayers of our state.”
Sanderson explains, “Current law requires yearly school district tier 1 Maintenance and Operations (M&O) rates to be compressed downward to provide lower tax rates. Since 2019, the cost of property tax reduction is estimated to be approximately $37 billion per biennium, which is an ongoing cost. As rates continue to be compressed, this cost increases to the state without an additional dollar of funding being provided to school districts. Eventually, unless the legislature intervenes, tier 1 M&O rates will reach a rate of $0.00. The current yearly cost of eventually reaching a $0.00 rate is approximately $25 billion, or $50 billion per biennium. In the state’s current tax structure, this revenue does not exist, even when the state experienced the $32.7 billion biennial surplus in 2023. Eventually, we will exhaust all available revenue to pay for property tax reduction; again, this is assuming the legislature does absolutely nothing and simply allows current law to continue.”
Sanderson concludes, “Creating a new multi-billion dollar voucher-like entitlement program will exacerbate this exhaustion of state revenue. Either the state will have to generate more revenue to fund this new ESA entitlement, or property tax compression/reduction will have to be eventually halted.”
As Sanderson says, whether or not you are in favor of or opposed to vouchers, it appears that it is a poor financial decision for Texas or any state that is trying to stretch their education dollar to meet the ever increasing needs of students in the 21st century. Rep. John Raney may have summed it up best when he said on the floor of the Texas House of Representatives during the voucher debate last year, “I believe in my heart that using taxpayer dollars to fund an entitlement program is not conservative, and it’s bad public policy.”
