REPORT: Educational Choice Could Save $150M for School Districts Over 5 Years

Empowering parents with greater choices when it comes to determining the best educational path for their children is not only supported by strong moral arguments, but can also lead to a net positive fiscal impact for public school districts, according to a new report released today - The Math of Educational Choice - by the RI Center for Freedom & Prosperity, a nonpartisan public policy think tank.

Unlike the ongoing charter-school debate in Rhode Island, the projections from a complex modeling tool, RI-DIMES, demonstrate that conventional beliefs about the fiscal effects of voucher-type programs like the educational scholarship accounts (ESAs) provided for in the legislation, do not apply under a well-designed scholarship program.

Currently, bi-partisan legislation has been submitted in 2015 in both the House (H5790) and Senate (S0607) of the RI General Assembly. "What we need is a different mindset about empowering families with regard to education," said Representative Raymond Hull (D, Providence), lead sponsor of the House legislation. "I know that parents want the best for their kids. It's going to happen."

In the first year, with fewer than 3% of public school students projected to opt for scholarships, which are capped at $6,000, even after subsidizing scholarships to public school students who migrate to a private educational path under the "core" fiscal scenario, RI-DIMES projects that:

• Public school districts will see large individual and aggregate net fiscal savings. With statewide savings expected to reach $17 million, 33 of 36 local districts will realize net savings in the first year. This figure could rise to $32 million per year and would include all districts but one, under more-optimistic assumptions, or $150 million over 5 years.
• Funding per public school student will actually rise in every school district, by an average statewide increase of $316.
• Total public and private spending on education will increase by $17.2 million, because the scholarships will provide an incentive for families to invest more of their private dollars into their children's education.

"The Center's findings in Rhode Island are very consistent with research results from around the country when it comes to private school choice programs," said Dr. Matthew Ladner, a national education reform leader, and co-creator of ESA scholarships. "In the 21st century, families should be provided with more freedom and flexibility, resulting in increased educational achievement, without adversely impacting public schools, which will remain a permanent feature in America." 

Other key findings: 

• No new taxes or fees are required to fund the scholarship program
• 100% of locally raised taxes will remain for use in local school districts
• As previous reports have indicated, most public schools are also likely to see increased academic outcomes

With the state's public school buildings in dire need of repair and maintenance, and with property taxes already high across the state, the proposed educational savings account legislation in just five years could free up $85 million to $150 million in revenue that could be applied to relieve these two pressing issues. 

When considering a "universal" policy as described in current legislation, in which current private school students are also granted partial scholarships, the net fiscal impact for public school districts is diminished, providing a wider range of possible first-year outcomes:

• Under average assumptions, statewide savings would drop to about $1.85 million, with 50% of the public school districts still realizing net savings.
• Under more-optimistic assumptions, all but one school district would realize net savings, with the statewide total savings approaching $18 million per year. 

The Center, in conjunction with a PhD economics scholar at Providence College,Professor Angela Dills, has developed a fiscal modeling tool, Rhode Island District Impact Model for Educational Scholarships (RI-DIMES), that can project the statewide and district-by-district fiscal impact of the educational scholarship program component of the 2015 bipartisan legislation submitted in both the Rhode Island House of Representatives and Senate.