Efforts to divert state dollars to private schools often start small but balloon in costs and consequences, panelists from Arizona, Wisconsin and Indiana said during a recent OpenSky webinar.

The cost of such measures are often initially in the $1 million to $5 million range when they are first passed, but in all three states, the programs increased in cost to the state almost every year.

For example, said Beth Lewis of Save Our Schools Arizona, a scholarship tax credit program in Arizona that resembles the tax break contained in LB 753 – a measure before the Revenue Committee today – was initially proposed with a small cost in 1998. Today it reduces state revenues by $250 million a year, Lewis said.

“Functionally what that does is reduce the state’s general fund, which is used to fund public K-12,” Lewis said.

Privatization dollars impacting funding for public schools, other priorities

Tax credits, vouchers that provide parents state dollars to use for private school tuition and other mechanisms to divert public dollars to private schools have grown rapidly in cost while simultaneously depleting dollars for public schools in all three states. In Indiana, the cost expanded more than 10 times in a 10-year period from $30 million in 2011 to more than $300 million today, said Cathy Fuentes-Rowher of the Indiana Coalition for Public Education.

Aside from reducing funding available for public schools, the privatization measures also deplete revenue that could be used to fund other key state priorities. For example, in Indiana, reduced state revenues have contributed to the state not being able to address major rural health care disparities, Fuentes-Rowher said.

Privatization measures increasing property tax reliance

The lack of state funding for public schools in all three states has increased the need to lean more on local property taxpayers. In Wisconsin, this has created what Heather DuBois Bourenane of Wisconsin Public Education Network called the “Referenda Effect,” a situation where public school districts regularly seek more funding from local taxpayers by way of ballot referenda.

“People are forced to go to the ballot box and vote to raise taxes on themselves in order to keep their schools thriving,” she said.

The story is similar in Arizona and Indiana, Lewis and Fuentes-Rowher said, with Lewis noting that in Arizona some taxpayers express frustration that schools seemingly always ask for more funding from local taxpayers.

“The sad reality is we have to keep asking local taxpayers for money because the state refuses to fund their schools because they are solely focused on funding private schools,” she said.

Rural schools, students struggling in all three states

The panelists noted that increased reliance on property taxes and having to go to the ballot to increase funding for schools has been particularly hard on students who attend rural schools. Many of these districts aren’t as wealthy as suburban districts and thus ballot pushes aren’t typically as successful in rural districts. As a result, many rural schools lack funds to provide school supplies, student transportation and other necessities. The lack of funding also prevents many rural schools from being able to offer wages high enough to attract teachers and offset teacher shortages.

Rural education struggles are compounded, the panelists noted, because there are often no private schools nearby so students can’t take advantage of the policies that would allow them to access private schools. This means students must go to local public schools that are often facing significant funding issues caused by public dollars being diverted to privatization programs.

Lack of transparency and accountability measures make evaluating privatization programs difficult

And while the cost of programs that divert funds to private schools have increased, it is difficult to say the same about achievement levels of students who attend private schools via the programs. Privatization measures haven’t proven to be the educational panaceas proponents claimed they would be in Indiana and Wisconsin as data fails to prove better outcomes for students. It’s impossible to tell how the programs are doing in Arizona, Lewis said, because the state doesn’t require private schools to report on the achievement of their students in meaningful ways.

Transparency and accountability in reporting are issues in Wisconsin and Indiana as well as private schools are not required to follow the same reporting, testing or accountability standards as public schools despite the fact that they receive public support.

Public school cuts harming low-income and special-needs students

While reporting and accountability issues make it hard to evaluate the effectiveness of privatization programs, the panelists noted that the cuts to public education that have resulted from depleted state revenues have been particularly hard on low-income students as well as students with special needs.

“It’s the kids with the most needs who are being hurt by this privatization,” Fuentes-Rowher said.

The legislative hearing on LB 753 is set for 1:30 p.m. in Room 1524 of the State Capitol. Nebraska Public Media will stream the hearing live.