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Publicly Funded Education Savings Accounts Could Help Our Students—and New York Public Schools

This week, newly published research suggests that even New York families who choose to keep their children in zoned public schools could benefit if the state adopted a program that eight others have embraced: Education Savings Accounts. A frequent critique of publicly funded school choice programs like ESA’s—that they siphon funding from public school districts—turns out not to be the case in a large number of studies. And according to modeling from EdChoice’s Marty Lueken, quite the reverse would happen if ESA’s came to New York City.

Publicly funded programs that enable families of limited means to have a full range of educational choices are of particular interest to Partnership Schools: over four hundred of our students have access to them, while another 2,200 do not—simply because the former group lives in Cleveland, the latter group in New York.

ESA’s vary from state to state, but in general, they enable families below an income threshold to have a portion of the state per-pupil funding that would have gone to their child’s school district deposited into an account that families can use for certain approved educational expenses, including tuition at a non-public school.

A few key points of Lueken’s analysis stick out:

  • Seventy studies have analyzed the fiscal impact of school choice programs in other states. The overwhelming majority of those studies—65 of them—found that programs like vouchers and ESA’s had positive impacts for taxpayers.
  • New York State sent an average of $10,770 per student to districts in 2019-20, and some of that total is not based on pupil counts. So when districts lose students now—and if they lost them under an ESA program—some of that state funding, along with local property tax-based funding, would continue to flow to public school systems.
  • As we’ve found before, EdChoice’s analysis merits consideration in part because they don’t hesitate to share downsides of the programs for which they also advocate. Lueken, for instance, admits that while 654 New York school districts would have net fiscal benefits from an ESA program, 15 would experience short-run losses.
  • New York City is not among them; Lueken estimates that the New York City Department of Education would net over $11,000 in the short run for every student who left.

Of course, Catholic schools like ours are already saving New York taxpayers money. Given that the city’s estimated short-run average variable costs per student amount to $19,300, if Partnership Schools were—God forbid—suddenly to close, and all our students transfer to public schools, they would cost New York taxpayers an additional $43 million in increased variable costs each year in the short term.

On the other hand, if New York adopted ESA’s, the cost to New York taxpayers would be far smaller than the cost to educate in public schools. Lueken uses two models for possible ESA’s in New York—the smaller of which would provide families $6,500 per student for educational expenses. Depending on an ESA program’s design, then, and presuming that every one of our students could and would actually participate, ESA’s for current Partnership-New York students would cost the state at most $14.6 million. This matches Lueken’s analysis; he notes that “under these models, the ESA cost is just 24%–36% of the per-student cost to educate the same student in the public school system.”

At Partnership Schools, our primary reason for supporting publicly funded school choice mechanisms like ESA’s or vouchers is not their cost savings for taxpayers; it is equity. As thousands of New York families have demonstrated this year, parents with the power to do so vote with their feet and their children’s enrollments to pursue the education they think best. All families, regardless of income, should have the same range of educational options—including faith-based schools—that wealthier parents have.

Partnership Schools’ per pupil cost—about $11,500 last year—means that even with ESA’s, our schools would still need to pursue significant private fundraising to provide our students the education they deserve, just as we do currently in Cleveland. And in New York, we aren’t waiting to make more equitable choice a reality for families in the neighborhoods we serve; many pay as low as $1,500 per year. But we know that 68% of our families in New York have incomes that qualify for the federal free and reduced-price lunch program, and when a family is striving every day to meet basic needs, even $1,500 can be an unbearable strain. For such families, ESA’s could be game-changing.

It is possible to advance equity in this way while also stewarding public funds effectively—and Lueken’s in-depth modeling of how ESA’s could help New York do that is worth a closer look.

Martin Lueken’s full analysis is available here