Study: Bill providing funding for educational scholarship accounts won’t hurt public schools financially

PROVIDENCE – New analysis by the Rhode Island Center for Freedom & Prosperity shows that a bill under consideration in Rhode Island that would provide funding for educational scholarship accounts won’t hurt public school districts financially.
Using a modeling tool, RI-DIMES, based on a version from the CATO Institute refined and implemented by the center staff and Providence College Professor of Economics Angela Dills, the center today released a study that shows, in part, that public school districts will see large individual and aggregate net fiscal savings if the accounts are implemented, said Mike Stenhouse, the center’s CEO.
“We can make a strong moral case for why students and families need expanded educational choice options,” Stenhouse told Providence Business News when the report was released. “The knee jerk reaction from opponents is that this kind of program will hurt public schools financially. What this report shows is: that is a myth.”
Arizona was the first state to enact laws allowing educational scholarship accounts, which are like vouchers, primarily for private schooling, including home-based education. Other states that have enacted similar laws are Mississippi and Florida, Stenhouse said.
Derived from vouchers, educational scholarship accounts are debit accounts controlled by parents to use in a flexible way to educate children, based on income adjusted scholarship amounts. They’re capped at $6,000 a year, Stenhouse explained.
Families would have to apply for the scholarships through the state Department of Education, Stenhouse said.
The total scholarships paid are less than the cost of educating those departing. The money comes from existing state funding for school districts, Stenhouse said.
In the R.I. General Assembly, bi-partisan “Bright Today Scholarship” legislation has been submitted in 2015 in both the House (H5790) and Senate (S0607).
“What we need is a different mindset about empowering families with regard to education,” said Rep. Raymond Hull, D-Providence, and lead sponsor of the House legislation. “I know that parents want the best for their kids. It’s going to happen.”
In the first year, fewer than 3 percent of public school students are projected to opt for scholarships. As a result, RI-DIMES projects that the statewide savings is expected to reach $17 million, and that 33 of 36 local districts will realize net savings in the first year.
Stenhouse also notes the projected savings could be used to help pay for needed school building maintenance and repairs.
The report also asserts that funding per public school student will rise in every school district, by an average statewide increase of $316. No new taxes or fees are required to fund the scholarship program; 100 percent of locally raised taxes will remain for use in local school districts; and improved academic outcomes are likely at public schools, the report states.
The report also notes use of ESAs would allow total public and private spending on education to increase by $17.2 million, because the scholarships will provide an incentive for families to invest more of their private dollars into their children’s education.
“The Center’s findings in Rhode Island are very consistent with research results from around the country when it comes to private school choice programs,” said Matthew Ladner, a national education reform leader, and co-creator of ESA scholarships.

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