School choice allows public education funds to follow students to the schools or services that best fit their needs—whether that’s to a public school, private school, charter school, home school, or any other learning environment families choose.

This seems like a good concept, and you’d think it would have rousing support from all sides. After all, America is the land of opportunity, life, liberty, happiness, and the red, white, and blue-tinted dream. Here, anyone can be anything, and freedom means you have options—right?  

Surprisingly, the debate over education and public funding is pretty heated. Advocates for school choice cite positives such as improving academic outcomes and reducing economic and racial segregation. As the Foundation for Economic Education puts it, “The evidence clearly demonstrates that school choice programs are desirable and ought to be pursued on a larger scale….It’s hard to understand how anyone could oppose a marketplace in education.”

The opposition worries about issues like the state indirectly funding religious private schools. Many are tremendously apprehensive, voicing other concerns such as this Huff Post comment: “In reality, it’s just a scam to make private schools cheaper for rich people, further erode the public school system and allow for-profit corporations to gobble up education dollars meant to help children succeed.”

One of the biggest issues is whether or not school choice drains public funds away from the public school system. How concerned should the public be about this possibility? 

Current Funding

We all know that public schools get “public funding,” but what does that mean? 

In the context of conventional public schools, public funding includes local funds, a portion of the state budget, and federal funding (including grants earmarked for specific purposes). The actual specifications vary by state and district, but the general formula is as follows: 

  • Approximately 44% comes from local sources (primarily through the local property tax)
  • About 48% comes from the state (income taxes, sales tax, fees, etc.)
  • Around 8% comes from the federal budget (a large portion is earmarked for specific programs and services)

School choice has a different take on funding than the conventional school system. Financing for public schools can be somewhat complicated, depending on the source. Meanwhile, school choice definitively funds the child specifically. If a student is eligible for the school choice option, the funds allotted to that individual student follow them wherever they go. This system allows parents to use their tax dollars to educate their kids however they feel is best.


As volatile issues continue to plague the American public school system, parents are rapidly pulling their children from their conventional school settings. Private schools, religious schools, charter schools, and homeschooling are becoming more popular. It’s evident to anyone watching current trends that parents are acutely aware of their school choice options. 

Parents who choose an alternative education for their children often wonder why they pay into “the system” while not getting anything for their investment. In fact, in most cases, these families end up shelling out even more money from their family budget to educate their kids in the way they feel is best, and often with better results. With 82% of conventional public schools falling below the proverbial mark, this seems to be a big problem. 

A solution to this problem lies in school choice. Voucher programs are the primary funding mechanism accessible for families that want to choose their school. A voucher offers parents part of public education funds, opening access to other school options like charter schools, private schools, or even homeschooling. 

“These programs empower the family and, in so doing, infuse consumer accountability into the traditional public school system…Access to voucher programs is often restricted based on geography and income,” explains the Center for Education Reform. “Most programs require residency in the district to qualify for vouchers…Many programs also have restrictions on income.”

The question today is whether or not school vouchers have a negative impact on public school budgets, and if so, is this impact enough to cause concern?

The Facts

According to EdChoice, “School vouchers save states and taxpayers money while educating more kids than our current public school system can alone.”

In this rousing display of support, EdChoice highlights an aspect of vouchers and school choice that cannot be ignored. Statistically, offering families educational options with public funds has saved taxpayers’ money, costing less per student than a public school education. 

Good for families, good for the budget, but does school choice pose a threat to public schools? Though there are strong opinions on both sides, the numbers seem to say no. 

Funding Will Always Be There

The bottom line is that public schools will always be entitled to specific funds, regardless of students’ comings and goings. The Show-Me-Institute points out, “A large portion of funding comes via local property taxes. This funding stream flows into schools regardless of the number of students that attend them. A levy is instituted against the value of homes and property in an area and sent to local school districts. If 10 or 100 or 1,000 students leave, local funding is untouched.”

State tax dollars typically fund school vouchers, which means that local taxes remain for the local public schools. One objection to school choice is that when students leave, the funding follows them. The school district doesn’t have to invest in educating those students, but the schools still have the overhead, regardless of the number of students attending the local public school. How will there be enough money to pay for the facilities, programs, and teachers if students leave, taking most of their per-student funds with them?

While this appears to be a valid concern at face value, practically speaking, the local tax allotted for the conventional schools can reasonably be expected to cover school overhead.

Addressing The Problem Within

The state budget earmarked for education typically covers the school voucher programs. Since state funds follow the students, school choice raises some valid concerns among the school choice opposition. However, other issues could be more to blame. 

“The rampant fearmongering about school choice programs operating at the expense of public education is entirely baseless. If anything, these programs are underfunded, considering their track record of improving educational attainment, parent satisfaction, and test scores,” the Reason Foundation points out. “…So, if school choice isn’t draining education dollars…where exactly is all of the money going? A big culprit is employee-benefit costs, which are consuming an increasingly larger share of the funding pie in every state.”

The Reason Foundation continues its examination of school funding, showing how many schools and districts waste their resources. Their data shows that most school choice states spend far more on increasing benefits for district employees than any school choice program pulls from the public schools. 

Their conclusion? If public schools are worried about funding, perhaps they should begin their witch hunt within their own policies. 

The Money Leaves…Or Does It?

While some fear that the public schools lose massive amounts of funding when students leave the system, surprisingly, this isn’t actually the case. In reality, when families opt for an alternative education option through school choice, only a portion of the money assigned to those students leaves the district school to follow the child. 

EdChoice points out that school choice programs “affect public schools’ funding and resources in the same way they’re affected when a student leaves because their family moved to a new district—except with school choice programs, public schools get to keep almost all of the federal and local tax dollars and usually a portion of the state funds allocated for each child.”

The funding fears seem to be unfounded on all fronts. But what do the actual numbers tell us?

Cold Hard Facts

The bottom line is that an astounding amount of taxpayer funding is funneled into the public school system each and every year. Alternative education options do the same job with comparatively less funding per student. Meanwhile, it seems like the public school system demands more and more each year. 

During the 2019 fiscal year, the U.S. spent $752.3 billion on public schools. This budget represented yet another increase for the public school system. During the same fiscal year, most states participating in school choice only spent 1% of their combined program and public K–12 budget on their school choice programs. Even in states that spend the most on vouchers and tax-credit scholarships, such as Florida, the percentage points are negligible.

Despite the growing popularity of school choice programs in participating states, nearly all public funding remains solidly in the hands of public schools.  

The Schools Are Safe

Skeptics of school choice programs will keep a vigilant eye on budgetary issues as the public school monopoly continues to diminish. The fact remains, however, that the public school system continues to educate the vast majority of America’s schoolchildren and maintains its status as the primary education funding target. 

Families should have the option to educate their children in the way they believe is best and should enjoy access to public funds to do so. America is based on the ideals of freedom, and offering parents the freedom to choose how to educate their kids seems like a logical extension of those ideals. Public funds should continue to provide this liberty. 

The data shows that this practice poses no financial threat to the conventional public school system.


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