Title

State and District Fiscal Effects of a Universal Education Savings Account Program in Arkansas

Document Type

Article

Publication Date

1-24-2017

Keywords

Private school, school choice, fiscal effects, school finance

Abstract

Legislators in Arkansas have proposed a bill to increase educational choice through an Education Savings Account (ESA) program available to every child across the state. While many studies on the financial impact of existing ESA, voucher, and scholarship programs in the United States have found overall benefits to the state and individual districts, it may not be the case for a universally-accessible ESA since most existing programs are targeted to students based on need. A universal ESA would make ESAs available to all K-12 students in the state, so the fiscal impact is expected to be less beneficial than a targeted voucher or scholarship program. We use the Arkansas state funding formula to estimate the net impact of the proposed ESA program on the state budget overall. We also use the state education expenditure report in order to estimate the impact on each public school district in the state. Using our most defensible set of assumptions, we find that a universally-accessible ESA would result in small financial benefits to the state overall and to about half of the individual public school districts. Specifically, we estimate the program to result in around $2.8 million in financial benefits to the state in the first year. Additionally, we find that 50.6 percent of districts would financially benefit, while 55.5 percent of individual student transfers would result in financial benefits to their local school districts.

Comments

EDRE Working Paper 2017-04

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