This article was originally published on the website of Ohio State's College of Food, Agricultural, and Environmental Sciences.
COLUMBUS, Ohio — Taxpayer investment in Ohio’s school choice programs — reaching more than $1.5 billion in 2014-15 — deserves a much wider public discussion than it’s currently getting, says an analyst with the C. William Swank Program in Rural-Urban Policy at The Ohio State University.
“As school choice programs grow in size, an increasing share of locally generated tax revenues are being used to fund these programs,” said Mark Rembert, a doctoral student in Ohio State’s Department of Agricultural, Environmental, and Development Economics. The Swank program, housed in the department, conducts research, teaching and outreach within the College of Food, Agricultural, and Environmental Sciences.
In 2014-15, one in four urban Ohio students utilized some type of school choice program, Rembert said. Across Ohio, more than 350,000 students participated.
“If you look at the numbers, it’s astonishing how quickly they’ve grown,” he said.
This growth could potentially affect support for local school levies and could be causing other ripple effects in the economy, he said.
The 2016 analysis, School Choice in Ohio: Moving from Theory to Practice, is 38 pages and available to download free online at go.osu.edu/schoolchoice.
“Traditionally, we have communities pass levies to help fund their own school district,” Rembert said. “Today, increasing portions of those tax dollars are going to fund these other entities, and I don’t think it’s clear yet to the average taxpayer that this is the case.”
The analysis focuses on Ohio’s three largest school choice programs: charter schools, vouchers for private schools and open enrollment between school districts.
The charter school program is the largest school choice program in Ohio, enrolling more than 120,000 Ohio students in 2014-15, Rembert said.
Of those, just under 40,000 were enrolled in online charter schools, or e-schools, accounting for more than 30 percent of total charter school enrollment. Nearly 60 percent of e-school students are in suburban and, especially, rural areas, he said.
“It is difficult to set up brick-and-mortar charter schools in the suburbs and in rural Ohio, which is likely why we’re seeing so much enrollment in e-schools in those areas,” Rembert said.
Ohio’s charter schools, also called community schools, have come under scrutiny in recent months, with particular attention being paid to e-schools for issues related to attendance, accounting and instruction.
But e-schools might also have economic repercussions, Rembert said.
“Schools serve several roles in a community,” he said. “Their main job is to educate, but in a lot of places, they are also a major employer. In rural areas, they could be the major employer. And, they buy goods and services in the local area. They are an economic presence in the region.
“When you shift spending from a traditional public school or even a local brick-and-mortar charter school to an e-school, the local tax revenue paid by residents is leaving the community. As that sector grows, this is probably something that needs to be considered.”
Open Enrollment, Voucher Programs
Open enrollment is the second-largest school choice program in Ohio, with 71,000 students in 2014-15 attending a public school in a district other than the one to which they were assigned, Rembert said. Open enrollment was responsible for transferring more than $400 million between districts.
About 80 percent of school districts in Ohio participate in some form of open enrollment program, with nearly all schools in rural areas participating. Just over half of urban districts and just a third of suburban districts have open enrollment programs.
The private school voucher program, which allows qualifying students to pay for a private education with public tax dollars, is actually five programs, Rembert said, with spending exceeding $177 million in 2014-15. The largest such program is EdChoice, with 18,751 participants and $80 million in costs in 2014-15, he said.
Effects on Housing
With school choice programs gaining a larger foothold in the state, Rembert and colleagues examined potential ripple effects on other aspects of the economy, such as housing prices.
It’s important to remember, Rembert said, that traditionally many families with higher incomes have chosen to live in specific neighborhoods based on the quality of the school district.
“A lot of households are already making a school choice in that way,” he said.
For families without the financial means to choose to live in those school districts, school choice programs do appear to help level the educational playing field, he said.
“Evidence does suggest that expanding those families’ choices by offering voucher or charter programs can have a beneficial effect on certain students,” he said.
At the same time, school choice programs are affecting the housing market, he said.
Demand rises for lower-cost housing in areas with poorer-quality schools if families know they have options for their children’s education, he said. Middle-income households are more likely to move into areas with lower housing costs if they know they will be able to use vouchers to send their children to private schools, for example, or take advantage of some other school choice program.
“This is one of the most overlooked implications of school choice policy,” Rembert said. “School choice really decouples the relationship between the quality of the school district and housing prices. It changes where households choose to reside, and is changing what we have believed for decades about the housing market.”
Urban-Rural Policy Considerations
Also noted in the policy brief is the difference in how urban, suburban and rural areas are treated under Ohio’s school choice policies.
“In addition to extensive enrollment in e-schools, I was surprised to learn that 46,000 students in rural areas are taking advantage of open enrollment,” Rembert said. “In some areas, that could mean extremely long commute times to and from schools.
“It appears that some rural Ohioans are going to great lengths to take part in school choice programs. The question is whether there are better ways to meet that demand.”
‘Explosion of Research’
In addition to an analysis of school choice programs in Ohio, the policy brief also provides an examination of such programs nationally.
“In the last few years, there has been an explosion in the economic research regarding school choice,” Rembert said. “Economists have taken that data and are looking at these issues.
“Are charter schools better performing? Why or why not? By bringing attention to this research, we hope to encourage policymakers to adopt an evidence-based process for authorizing and evaluating charter schools.”
Rembert hopes the information will assist Ohioans interested in school choice programs to put media reports and potential changes in policy into context, particularly when faced with funding decisions.
“The way the system is currently set up, an increasing share of locally generated tax revenues — we conservatively estimate about a half-a-billion dollars— are going to fund these programs,” he said. “We’re not saying that’s good or bad, but I don’t think it’s totally clear to the average taxpayer that this is taking place. Our biggest concern is that Ohio’s school choice system has made an already overly complicated school funding system even more complicated.
“Communities pass levies to fund local public education, and they assume the tax dollars are going to fund that school district,” he said. “But with school choice programs, a portion of those local tax dollars are going to fund these other entities.”
As school choice programs grow, other options for funding schools, such as countywide levies or bonds, could gain appeal, Rembert said.
“To have good public discourse, people need to be informed about how these programs work,” he said.
Co-authors of the policy brief were Mark Partridge, the Swank Chair of Rural-Urban Policy at Ohio State, and doctoral student Bo Feng.
Image: Ohio taxpayers may not fully realize how much of their local tax revenues are going to fund school choice programs in Ohio, analysts say. (photo: iStock)