How to Design a Fiscally Responsible School Choice Program in Texas

This brief is part of “Election 2024: Policy Playbook,” a series by Rice University and the Baker Institute that offers critical context, analysis, and recommendations to inform policymaking in the United States and Texas.

The Big Picture

• Current legislative leanings indicate that Texas will likely adopt a school choice or voucher program when the next legislative session convenes in 2025.
• While advocates of school choice believe it improves student access and success, evidence from other states’ implementation of similar programs indicates that they present budgetary and educational challenges that must be addressed before such a plan is adopted.
• Issues related to cost overruns, account spending, traditional public education support, and student achievement must all be monitored to ensure the school choice program performs for the benefit of students and the state. 

Summarizing the Debate

Texas voters witnessed a political proxy battle on school choice during the 2024 Republican state legislative primaries that could redefine education policy in the state. 

Several school choice or voucher program proposals — which would provide public funds to families seeking to offset the cost of private or religious schools’ tuition — were introduced and subsequently defeated during the 2023 88th legislative session. The most consequential proposal that included an education savings account (ESA) plan endorsed by Texas Gov. Greg Abbott was defeated during a special legislative session, with 21 Republicans and 63 Democrats voting against it amid concerns about reductions in financial support for public schools. Opposition was particularly notable among Republicans from rural areas with relatively few private schools.

Modeled after school choice plans in 17 other states, the proposal would have given Texas students $10,400 per year in public support to attend private schools. The plan was offered as an amendment to an omnibus school funding bill, which included a $7.1 billion boost to public education as well as teacher pay increases to allay fears of disinvestment. However, the plan was partly defeated by Abbott’s insistence that ESA be made available to all families, regardless of income.

In response to this legislative loss, Abbott invested $6 million to defeat Republican House members who opposed the plan, including several candidates who were previously considered close allies of the governor. Abbott’s campaign against these House members largely succeeded with the defeat of 11 of the 15 targeted legislators, likely resulting in a majority that favors school choice in the 89th legislative session.

Emboldened by these primary victories, it is likely that pro-school choice advocates will ensure that the 89th Texas legislative session is significantly defined by its handling of school choice. 

Expert Analysis

Comparatively speaking, there is relatively little peer-reviewed research available on ESAs, compared to other state school choice program options. The performance of programs in other states, however, can provide some clues about the potential impact of a school choice plan on Texas and provide lessons to legislators who are crafting proposals for the 89th legislative session. Future ESA proposals could be strengthened by considering the evidence from other states as detailed below. 

Texas policymakers should remain mindful of the potential costs associated with universal ESAs. A policy lesson in this regard can be learned from Arizona, where ESA expenditures ballooned far beyond expectations. Arizona’s school choice program, which was the first in the nation, experienced cost growth from an original estimate of $65 million to nearly $332 million, with another $429 million in anticipated costs for 2024. Initially, the program was targeted specifically to students with special needs. However, Arizona’s program became incrementally universal by 2022, leading to significant cost increases that were well above projections. Elsewhere, Illinois decided to end its school choice programs due to cost overruns. It would be prudent for Texas legislators to consider crafting a more targeted program given these examples.

Establishing a more targeted approach might also better focus the program on students who have the most need. Analysis shows that parents who are tapping into ESAs in existing universal programs are those likely to have children already enrolled in private schools. With a more targeted program, Texas legislators could offer higher levels of individual benefits to families in need. 

Texas policymakers also need to find a balance between flexibility in qualified expenses versus a lack of accountability in how ESA funds are allocated and spent. Several ESA programs in other states have had little oversight as to what constitutes educational expenses and are less restrictive than traditional voucher programs. By contrast, New Hampshire’s Children’s Scholarship Fund uses a digital wallet system that helps administrators track expenses to ensure compliance. A similar system could be adopted in Texas to help achieve administrative sustainability.

Even with subsidies, private education may remain inaccessible for many families, leaving them with public schooling as the only practical option. In 2024, the average Texas private school tuition for K-12 private schools is $11,050, which is slightly above the state subsidy. This number is far higher in urban areas. Indeed, some research suggests that ESAs may increase tuition costs for education above pre-K. 

ESAs may help the moderately disadvantaged, but not the most disadvantaged, due to the high cost of private education. Additionally, rural areas may lack private schools altogether. Texas legislators must be willing to pass ESA legislation that is not at the expense of public education, and they should take note of the impacts of ESAs in other states if expanding student access is a goal. 

Lastly, many school choice programs, including similar voucher policies, have demonstrated uncertain effects on academic achievement outcomes. Texas policymakers must continuously evaluate student achievement surrounding ESAs to ensure that they meet their intended goal of increasing student achievement. 

Policy Actions

In line with the analyses above, I offer the following recommendations for Texas legislators seeking to build a stable and accountable ESA program:

• Limit ESA access to low-income families and those with special needs.
• Ensure that ESA funds are spent on educational expenses.
• Continue to support public education.
• Be ready to adapt the program if academic achievement does not improve.

The Bottom Line

The 2024 elections could significantly shape education policy in the 89th Texas legislative session, likely resulting in a majority that favors enacting an ESA program. If a school choice program is adopted, the legislature should ensure the program’s financial stability by limiting access to only disadvantaged families and implementing accountability measures. Further, the Legislature should continue to support public education and be ready to adapt the program, depending on its level of success. 

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.