Education savings accounts and Alabama’s PRICE Act would help students and families
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Education savings accounts and Alabama’s PRICE Act would help students and families

The proposed education savings accounts in the Parental Rights in Children's Education Act would empower students and parents.

Testimony before the Alabama Senate Education Policy Committee on Senate Bill 202.

Thank you to Chairman Chesteen and the members of the committee for allowing me to testify today. My name is Christian Barnard, and I’m a senior policy analyst with the Reason Foundation. We are a national, non-partisan think tank and our K-12 education team specializes in researching school finance and education choice policies.

Today, I’m going to focus on the potential fiscal impact of the Parental Rights in Children’s Education (PRICE) Act for K-12 education, Alabama Senate Bill 202.

Individual school districts often worry that choice programs will hurt public school budgets by drawing large shares of students away, taking their public funding with them. But research produced by Dr. Marty Luekin of EdChoice indicates that these concerns don’t comport with historical data from other choice programs. In fact, his research on 27 established school choice programs in 19 states shows that “for most programs, take-up rates remain below two percent for the better part of a decade.”

Put simply, school choice programs have historically drawn small shares of students away from public schools, thus having a small impact on school district budgets. 

Additionally, the PRICE Act’s $6,900 per-student figure doesn’t account for all the funds that school districts receive—namely federal grants, local mills, and state funds outside of the foundation program. That means that when students leave school districts to enroll in the education savings account (ESA) program, these funds will often stay in district budgets. And while school districts do deal with fixed costs that can’t be easily eliminated in the short-run when students leave, districts are able to scale down operations in the long-run to accommodate smaller student populations.

As for the cost of this program to Alabama, there would be a high up-front cost because most early participants will be students already not enrolled in public schools. However, new participants in subsequent years of the program would largely be students who switch from public schools or who would otherwise have attended public schools.

Crucially, this population of students wouldn’t require new state money and in fact, would likely save taxpayer money since the $6,900 amount doesn’t account for all state or local funds currently spent in the public school system. If you’d like to see our own analysis estimating the cost of this program to the state in the first three years of implementation, I’m happy to provide that to you.

While considering budget impact is important, individual students can’t be reduced to dollar amounts or costs. The PRICE Act is a definitive statement that all Alabama families deserve the option to direct their children’s public education funds in a manner that helps them reach their full potential.

Christian Barnard’s testimony begins at 19:15 of the video.