The Privatization of Education

Is “School Choice” Code for Education Privatization?

Gov. Abbott and conservative political operatives have been touting this abstract idea of “school choice.” But what do they mean? Texas parents have many options when it comes to educating their children — whether at neighborhood public schools, magnet schools, early college campuses, charter schools, private schools, or homeschooling. Some districts also offer open enrollment, in which a student may attend any school within the district if space is available. For voucher proponents, “school choice” means subsidizing private education with state funds without accountability. 

Common “school choice” proposals

Governor Abbott and Lt. Governor Patrick have listed “school choice” as an emergency item and legislative priority (respectively) this session, with Speaker Phelan yet to weigh in on the issue. Here are some common “school choice” proposals seen in other states that may come up as the Texas Legislature debates the issue: 

  • Vouchers —  A direct payment to families to leave public schools and enroll in private schools. The payment is taxpayer funded and can cover part of the cost of private school tuition, but rarely all of it. Ultimately, vouchers give wealthier families discounts on private school tuition and do nothing to support poor and middle-class families, as they will likely not be able to cover the remaining cost. Education advocates have argued that there is not enough capacity in the private school network for vouchers to make any meaningful impact on enough economically disadvantaged students. 
  • Education Savings Accounts (ESAs) — An account funded by the state that helps fund expenses for primary education (often distributed to families via debit card). Like vouchers, ESAs can be used for private school tuition. Unlike vouchers, ESAs can also be used for educational services such as private tutoring and uniforms. For example, in Arizona, ESAs can be used for private school tuition, educational therapies, and tutoring.
  • Tax Credit Scholarships — State-issued tax credits to businesses or individuals who give money to education funds that sponsor vouchers for students to attend private schools. Eligible taxpayers can include both individuals and businesses. For example, Alabama’s Education Scholarship Program allows taxpayers who donate to nonprofit scholarship-granting organizations to receive tax credits for their contributions. 

Bottom line: whether you call it vouchers, ESAs, or tax credit scholarships, it diverts state funds that would have been used to educate students in public schools to private entities that are not accountable to Texas taxpayers. 

Texas History of Rejecting Vouchers

Lawmakers in Texas have attempted to pass a variation of a school voucher bill numerous times over the last two decades but have failed every time. For rural legislators, there often aren’t enough schools around for so-called “school choice” programs to work. Urban areas are also known to suffer from “choice deserts.” 

The closest vote on vouchers came in 1997 when the House narrowly passed a floor amendment that would have made any private school that received state voucher funds subject to state accountability provisions. After that vote, voucher sponsors pulled the bill down. Since then, a bipartisan House majority has defeated every voucher proposal. More recently in 2021, a bipartisan House supermajority (115-29 vote) passed an amendment by Rep. Abel Herrero to the House budget that prohibited state dollars from being used on school vouchers. 

Fiscal impact on districts: Voucher programs drain resources from public schools

During the State of the State, Gov. Abbott said that “per-student funding is at an all-time high,” when, in reality, education spending has decreased under Abbott’s watch (when adjusted for inflation). Teacher pay and per-pupil funding lag far below the national average. Our state already ranks among the worst for public school funding and has faced lawsuits by the U.S. Department of Education for cutting funding for special education services. When vouchers are implemented, more money will be diverted from the public school system. 

Texas schools are funded based on average daily attendance (ADA), so if students transfer away from traditional school districts, those schools will lose out on the associated funding. Schools cannot eliminate certain expenses despite a loss of funding, such as teachers, who are still needed in each classroom to serve the remaining students. In addition, fixed costs such as utilities, building maintenance, janitorial services, and transportation remain largely the same, with little or no savings possible. Ultimately, a voucher program would have a significant fiscal impact on public schools, draining resources that often require budget cuts to academics, elective courses, enrichment programs, and staff. A Deputy TEA Commissioner confirmed as much when he told a parent on a recorded call that funding for private school vouchers could pull money away from public schools, saying it might cost a school “a 4th-grade teacher.” School voucher programs, at their core, divert necessary funding from already underfunded public schools. Furthermore, voucher programs are a classic example of initiatives growing well beyond their intended scope, expanding over time with ballooning costs to the state.  

Recent statewide polling conducted by Change Research in 2022 showed 82% of Texas voters are concerned voucher programs would divert money from public school funding. However, only 43% of Texans said they opposed a school voucher program (46% were supportive and 11% were unsure).

Setting the Record Straight on ESAs and Parental Bill of Rights 

Gov. Abbott has claimed that his voucher plan is simply an extension of an existing one created in 2017 for special education students in Texas, stating that “it worked so well that a bipartisan super-majority passed it into law and now wants to increase funding for it.” Abbott is referring to the Supplemental Special Education Services grant program (SSES), a one-time grant for caregivers of eligible special education students designed to offset learning disruptions related to COVID-19. Unlike the voucher program Abbott is pitching, the SSES is not a replacement for attending a Texas public school, but is supplemental. In fact, to receive the funds, the student must be attending public school. The Texas Council of Administrators of Special Education (TCASE) has criticized the mischaracterization of the SSES, stating that ​​”private schools do not have to follow the Individuals with Disabilities Education Act (IDEA) and the Americans with Disabilities Act (ADA) that protect students with disabilities.” 

Secondly, Abbott has promoted a “Parental Bill of Rights” during events and on the campaign trail. However, parental rights have been outlined in statute for 28 years, adopted by the Legislature in 1995. Rather than encouraging partnership between parents and teachers, the governor is sowing divisiveness to justify his voucher push. 

Vouchers and Accountability

Voucher programs use taxpayer dollars to fund schools that are not required to meet Texas’ academic standards or comply with federal protections for kids with disabilities. The available research on vouchers does not show improved student outcomes or educational innovation. Additionally, voucher programs lack transparency in the use of taxpayer dollars. 

Accountability for Student Outcomes

The state can compare student performance data between traditional public schools and charters because they are taught the same curriculum and take the same standardized tests. Private schools have no such apples-to-apples accountability criteria, making it difficult to track student outcomes relative to public schools.  

Studies on four states offering voucher programs — the District of Columbia, Louisiana, Indiana, and Ohio — found that, on average, students attending private schools with vouchers did less well on tests relative to their peers in public schools. A separate study by Stanford Education professor Martin Carnoy analyzed 25 years of voucher research and found that voucher programs do not significantly improve test scores. Instead, vouchers distract from proven policies and programs that positively impact test scores and graduation rates. The study also found that, at best, vouchers only had a modest impact on high school graduation rates.

Accountability for the use of Public Funds

Traditional public schools are accountable to locally elected school boards and the TEA.

Charter schools in Texas are subject to TEA academic accountability, just like schools run by local school districts. However, unlike school districts, charter schools do not have to answer directly to taxpayers and locally elected school boards, instead selecting their own form of “school boards.” Although many charters are managed responsibly, this arrangement has sometimes led to abuse and profiteering. Some advocates worry that a voucher program would amplify cases of abuse due to lax oversight.

Private schools are not subject to any of the state’s accountability measures because they currently receive no state funds. Private schools have their own governance structures, academic standards, and curriculum, and they want it that way. However, if a private school voucher program were adopted that sends state education funds to private schools, Texas taxpayers would have a legitimate reason to hold private schools accountable for how their tax dollars are spent. 

Vouchers and the 88th Legislative Session 

Several voucher and school choice bills have been filed this session, including: 

HB 557 by Rep. Vasut — would create an educational expense reimbursement program, where the state would reimburse parents for private school tuition and online academic programs as well as other education-related expenses, including textbooks, private tutoring, transportation, educational therapies, technology, and school supplies. The reimbursement would be equal to or lesser than the total amount of eligible education-related expenses during the most recent federal tax year or the deduction amount for state and local sales and use taxes claimed by the parent on their most recent federal income tax return. The bill directs the Comptroller to determine the means of the reimbursement payment. 

HB 619 by Rep. Shaheen — would create a new tax credit for taxable entities that donate to a “certified educational assistance organization,” defined as a nonprofit organization that awards scholarships or pays expenses for students. The tax credit is tied to the insurance premium tax, paid by all insurers and health maintenance organizations licensed by the Texas Department of Insurance. The amount of credit would be equal to or lesser than the eligible contribution amount or 50% of the entity’s state premium tax liability. The bill lays out limits on scholarship amounts based on the state expenditures per student in the preceding fiscal year. The bill would limit the total tax credits to $100 million for the 2024 fiscal year. To be eligible for the program, a student must have been enrolled in a public school during the preceding year or be starting school in the state for the first time and: 

  • be in foster or institutional care;
  • have a parent who is on active duty in the military; 
  • have a household income not higher than 200 percent of the income guidelines necessary to qualify for the national free or reduced-price lunch program; 
  • participate in a school district’s special education program and has an individualized education program; or
  • is the sibling of a child who is eligible to apply.

SB 176 by Sen. Middleton — also establishes a tax credit against insurance premium taxes for donations to nonprofits that offer educational scholarships. In addition, SB 176 establishes an education savings account called the “Texas Parental Empowerment Program” to pay for private school tuition and other education-related expenses. The bill establishes a parental review committee to help determine which education service providers could participate in the program, comprised of nine parents appointed by the Governor, Lt. Governor, and Speaker of the House. 

The LSG will continue to monitor this legislation as the session progresses.