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NEPC Review: The Tax-Credit Scholarship Audit: Do Publicly Funded Private School Choice Programs Save Money? (EdChoice, October 2016)

This report asserts that tax credit scholarship programs, that distribute scholarships to students via Scholarship Tuition Organizations (STOs), have saved state treasuries between $1.7 and $3.4 billion dollars since 1998. The report argues that these programs are able to realize fiscal savings as a result of students leaving public schools and entering private schools (defined as “switchers”). The report claims that the percentage of students leaving public schools, coupled with the offset of variable per-student costs that districts no longer need to expend, have resulted in the sizable financial savings for state governments. This review questions the method used to estimate the percentage of switcher students across these various programs, and examines how the report determines variable cost fluctuations for each student that leaves public schooling. Since no STO programs require officials to track data on which students transfer out of public schooling into private, these lax accountability standards have led the report author to estimate fiscal savings using conjecture. Instead of following students, they interpreted broad population changes to STOs. Consequently, the results of this report do not provide an acceptable causal conclusion for policymakers. Suggestions for more extensive accounting procedures along with more nuanced methodologies for calculating true variable student costs are discussed.

Document Reviewed: