Anna Baumann: Voucher would drain much-needed resources from Kentucky’s public schools

Over the next couple months, the 2021 Kentucky General Assembly will decide whether to enact House Bill 149, a private school voucher program that between now and 2040 would take $8.6 billion away from public schools and other critical investments and hand over control of those resources to unaccountable private entities.

The loss of public resources would come at a critical time for Kentucky’s P-12 classrooms. After more than a decade of state budget cuts set in motion by the Great Recession, per-pupil core school funding is already 16% below 2008 levels, afterschool programs have been cut nearly 40% and Family Resource and Youth Service Center funding is down nearly 15%. The resulting increased reliance on local revenue is brewing a crisis the state Supreme Court declared unconstitutional in the 1989 Rose Decision: In 2019, state and local funding for students in the wealthiest districts was $2,840 more than funding for students in the poorest districts.

Anna Baumann

A new, expensive private school voucher would deeply exacerbate these problems. HB 149 (SB 25 in the Senate) would create a new tax break that drains a continuously expanding pot of monies from the state’s General Fund budget. By 2031, when second graders this year graduate from high school, it would have already diverted over $1 billion to private schools and organizations — resources that would otherwise be available to invest in high-quality, publicly accountable preschool, K-12 classrooms and community colleges. And the revenue hole will keep growing.

HB 149 would give these resources to third party entities to pay for private school tuition and fees, uniforms and college test preparatory courses. These entities could reserve up to 10% of funding for administrative expenses, accumulate a large, growing carryforward and contract with “private financial management firms or other organizations.” In 2040, when the annual cost of HB 149 is $1.7 billion, Kentucky will spend $170 million on these wasteful administrative intermediaries, money that could instead be used to ensure public schools have enough counselors, classroom aids and speech pathologists, for example.

The most efficient and equitable way to invest state tax dollars in our children’s education is to adequately fund Kentucky’s public schools. It is also a constitutional mandate. Direct public spending on private schools through vouchers is prohibited by Kentucky’s constitution. HB 149 is a voucher at its core, but uses the tax code as a loophole to get around this prohibition.

The tax break itself — between 95 and 97 cents for every dollar donated to the voucher program — would be the richest in Kentucky by far. It’s 19 times bigger than the state’s charitable deduction for other kinds of giving to nonprofits such as places of worship, animal shelters and food banks (and which nonprofit private schools already benefit from). A tax credit of this size effectively allows private individuals and corporations to direct state tax dollars according to their preference.

If “donors” give stocks that have appreciated in value, they will actually make money on the tax break by avoiding capital gains taxes. In other words, HB 149 pays stock market investors to divert public resources to private entities.

Despite what we’ve heard about the equity goals of programs like these, the experiences of other states show that HB 149 will primarily benefit the most well-off families that are eligible. Students only become ineligible once their household income surpasses 463% of poverty — up to $121,175 for a household of 4. This means that many families who are already paying for and can afford private school, costs related to homeschooling or other alternatives will be eligible for the state to pick up these costs.

On the other hand, accessing the program will be more difficult for low-income working parents and those without reliable internet, cell phone service, transportation and access to educational alternatives. Few such alternatives even exist in Kentucky’s rural counties. Research suggests that contemporary voucher programs can even worsen racial and socioeconomic stratification. And under HB 149, public resources would be diverted to private settings where students may be discriminated against based on gender identity, sexual orientation, being an English language learner, race, disability status and religion.

Kentucky already has a proven way to advance equity and academic success: by systematically investing more in low-income districts, as has been and would be done by increasing the state’s General Fund contribution to core school funding, and in programs providing special support for disadvantaged students. We have a lot of work to do to equip every child to thrive and remove all barriers to success. HB 149 would make that crucial task much harder.

Anna Baumann is deputy director of the Kentucky Center for Economic Policy.

5 thoughts on “Anna Baumann: Voucher would drain much-needed resources from Kentucky’s public schools

  1. What’s wrong with choice? Liberals love choice, unless it’s education and takes away from the teacher unions.

  2. Stop holding everyone back! Choice is good here. Why wouldn’t everyone want the best education possible for children?

  3. State tax dollars are not meant to go to private schools. There is no accountability as to how that money is spent.We must strive to keep public education funded to be the best education for our children.This has nothing to do with being a “liberal”. If you want to go the private route, then find your own funding, otherwise, work to make your child’s public school great.

  4. The voucher system makes so much sense and would overwhelming create better education to all children.
    If you explained the voucher system or an equivalent system to anything of the similar or contrary to people on the street, they would all agree.
    Yes it is the sad sad reality that money and power is more important than kid’s educations. The teachers Union values money, salaries, perks, benefits, and power over kid’s educations.
    It is a crying shame the union leaders and staff hide behind a mysterious black cloak. You don’t know who they are, you don’t know which buildings they work in, they don’t make public statements or ever step foot in schools, they never talk or meet with parents, parents don’t know who they are, most teachers have no idea who there are, where they are, or really what they do.
    They have to keep a very low cover and leave no footprints behind, otherwise the public will understand what they’re actually doing.
    Good for you Teachers Union leaders and staff. You can stuff you pockets with fat salaries, early retirement, and other artificial benefits since you live off other’s tax dollars, but you’re doing a great deal of damage to the education of our nation’s children. Shame on you.

  5. Yep, it’s all pretty simple. All you have to do is follow the money. That goes for any wacky system in America. Follow the money and then it all make sense. People at teacher union all got 6 figure salaries while the poor teacher makes little monies and pull there hair out with kids that tell them the way it is. That why they cant find teachers no more, they all retiring and no one wants to be a teacher. Who wants to sit in a class room and get verbally abused by punk kids your not allowed to punish or give detention to. Kids get maybe an ounce of the education they used to get since they can do whatever they want all day and be on there phones in the class room. Heck when I was in school it wernt out of the ordinary for a teacher to throw you against a wall. That why my generation actually go to work all day, respect others, and make somthing of there lifes. kids today live off mommy and daddy, weather they parents have money or not, until there 30 and they cry all day if they end up getting a real job cuz someone yells at them. Wow. No wonder china is laughin there rear ends off at us, we are on a sure and steady decline cuz we cant discipline our kids to work hard and respect there elders.

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