BOULDER, CO (November 21, 2024)—The U.S. Department of Education projects nationwide enrollment declines over the next decade, which will lead to budget cuts for school districts, especially in areas serving vulnerable populations—at the same time that federal COVID-19 stimulus funds are ending. As enrollment drops, districts can lower long-term costs by reducing new hiring, engaging in the painful process of personnel layoffs, or, in extreme cases, by closing schools. Short-term savings are even more elusive, leading to some very difficult policy choices.

Within this context, many states are choosing to fund parallel systems, with some public dollars going to neighborhood schools run by school districts, some going to charter schools run by private parties, and some going to private schools that are generally run by religious institutions.

Rather than commit new funding for district-run K-12 schools, many state legislators have invested taxpayer funds in the school-choice expansion of vouchers and charter schools. In 2023 alone, lawmakers in nine states adopted voucher-expansion legislation, and many states have expanded charter school authorizations as well, despite limited enrollment growth. This approach is inefficient, and it places a unique burden on those neighborhood public schools.

NEPC’s new policy brief, The Fiscal Impacts of Expanded Voucher Programs and Charter-School Growth on Public Schools: Recommendations for Sustaining Adequate and Equitable School Finance Systems, synthesizes research on the fiscal impacts of charter and voucher school policies on public school systems. Authors David S. Knight of the University of Washington and David DeMatthews of the University of Texas at Austin also discuss recent developments, including the influx of voucher policies, often promoted by large philanthropic donations and messaging campaigns.

The brief examines the connections between decreasing school enrollment, school privatization, and public-school funding cuts. Research shows, for example, that charter school growth and voucher programs have negatively affected funding of district-run public schools. Meanwhile, a network of philanthropists and wealthy donors have reshaped the political economy of school finance in the face of declining public-school enrollments, advocating for voucher programs, charters and privatization.

Sustaining adequate and equitable school finance systems requires local, state, and federal action. In the longer term, educational stakeholders across all levels have significant responsibility to ensure the sustainability of the public education system. The brief concludes by offering specific recommendations for sustaining adequate and equitable educational finance systems.

Find The Fiscal Impacts of Expanded Voucher Programs and Charter-School Growth on Public Schools: Recommendations for Sustaining Adequate and Equitable School Finance Systems, by David S. Knight and David DeMatthews, at:
http://nepc.colorado.edu/publication/finance-equity