Public school vouchers could increase education competition
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Public school vouchers could increase education competition

Eliminating residential assignments and putting parents in charge of funding would give all families more agency over their students' education.

As states continue to experience historic drops in school enrollment, it’s becoming clear that parents are frustrated with America’s K–12 public schools. As a result, support for school choice is at an all-time high.

Yet despite a banner year for the school-choice movement in 2021, state spending on school-choice programs such as vouchers, education savings accounts, and tax-credit scholarships consists of less than 0.5 percent of total K–12 public-education expenditures in the U.S. This is because most programs are narrowly targeted to subgroups such as students from low-income families and those with disabilities.

For state legislators, the obvious solution to this supply-and-demand problem is to establish programs that are available to all student groups while expanding eligibility under existing policies. The good news: More than 30 states are considering school-choice legislation this session, unlocking millions more dollars for families to spend on private educational services.

Unfortunately, even under these proposals, most families still won’t have access to school choice, and other reforms are needed to help those who remain in public schools. To do this, state policy-makers should look to the work of Milton Friedman: the economist who inspired the modern school-choice movement.

Friedman advocated offering vouchers that families could use for private-school tuition, but his vision also extended to increasing competition among public schools. He imagined a system in which all families could take their taxpayer-funded education dollars to the public school of their choice. According to Friedman and his wife, Rose, “The size of a public school would be determined by the number of customers it attracted, not by politically defined geographical boundaries or by pupil assignment.”

Several studies conducted over the last decade indicate that public-school vouchers would offer many of the same benefits of private-school-choice programs, including expanding options for families and incentivizing public schools to be more responsive to students’ needs. The concept is straightforward: A per-pupil dollar amount would be attached to each student, and families would be allowed to use this funding to enroll in public schools regardless of where they live.

This type of program has the potential to achieve scale and reach millions of families that are currently left out of choice programs. To make public-school vouchers a reality, policy-makers should pursue three policy goals.

First, states and school districts need to do away with residential assignment — the practice of determining kids’ schools based on where they live. Residential assignment is deeply embedded within school systems, and district lines provide further obstacles to student movement. Fully implemented public-school vouchers would require a boundaryless system in which the default is parental choice.

Lawmakers in states such as Oklahoma, Arizona, and Florida are chipping away at this restriction with open-enrollment policies — an arrangement that allows families to enroll in schools inside or outside their districts with open seats. This is a good start, but residential assignment should be eliminated altogether so that no school district has a monopoly on student enrollment.

Next, states should revise their funding formulas, which are typically a patchwork of education-funding allocation streams that weren’t designed with student movement in mind. As a result, dollars don’t seamlessly follow students to the school they attend, and some districts have weak financial incentives to enroll new students or hold on to existing ones.

To get around this, policy-makers could follow Wisconsin’s lead by establishing a flat per-pupil amount for all transfer students — with additional dollars for students with disabilities — that is paid for by resident school districts. Not only does this ensure that the right financial incentives are in place, but it’s also designed to be revenue-neutral, putting no additional pressure on state coffers. This mechanism has served the Badger State well, as 70,428 students now attend schools outside of their resident districts.

Lastly, policy-makers should send these dollars directly to families by putting them into restricted-use spending accounts, similar to how education savings accounts already operate in states such as Arizona and North Carolina. This way, school districts could set tuition rates based on local considerations, and families could use any remaining dollars for such expenses as transportation, tutoring, or certification exams.

To be sure, public-school vouchers alone would fall well short of Friedman’s vision for a robust educational marketplace in which all providers, both public and private, compete on a level playing field for students and innovate in response to demand. Nevertheless, eliminating residential assignments and putting parents in charge of funding — even if it’s just for public-school options — would give all families more agency over their education and help tip the balance of power in their direction.

A version of this column previously appeared in National Review.