Ray Carter | February 14, 2022

Driving students away reaps benefit for public schools

Ray Carter

Data released by the Oklahoma State School Boards Association (OSSBA) indicates that Oklahoma public schools directly or indirectly reap as much as $534 million annually for students they don’t serve.

The Oklahoma Constitution states that the Legislature must maintain a school system “wherein all the children of the State may be educated.” Yet opponents of a major school choice bill object that it could force the state to live up to that promise to educate “all” children.

One reason opponents raise that concern is that the exit of students from the public-school system has generated enormous financial benefits to schools for students they no longer serve or never served.

Effectively, the more students who are driven out of the public-school system, the more financial benefit the public system receives. Critics say that creates perverse incentives that explain why officials in many districts ignore the needs of local families.

Data released by one school-choice opponent, the Oklahoma State School Boards Association (OSSBA), indicates Oklahoma public schools have directly or indirectly reaped as much as a half-billion dollars in benefit as students were driven out of the public system.

While that reality is often overlooked, it’s not rare, according to one national school-finance expert.

“If you shop at one grocery store every week and then you switch to Walmart, your former grocery store doesn’t get to keep any of your future grocery money,” said Benjamin Scafidi, director of the Education Economics Center at Kennesaw State University. “But it’s very normal, it’s standard, for public schools to retain funds for students they no longer serve.”

“If you shop at one grocery store every week and then you switch to Walmart, your former grocery store doesn’t get to keep any of your future grocery money.” —Economist Benjamin Scafidi

When students leave the public-school system, the per-pupil tax funding allocated for that student remains with public schools. Critics say that results in a system where poor service is, in effect, financially rewarded. The more students who leave, the more money is freed up at the school.

The amount of funding affected is enormous, according to a recent analysis of Senate Bill 1647 released by the Oklahoma State School Boards Association

SB 1647, by Senate President Pro Tempore Greg Treat, R-Oklahoma City, would create the Oklahoma Empowerment Account (OEA) Program. Under the program, any student eligible to enroll in a public school would be eligible for an OEA, which would provide families a share of the state per-pupil funding allocated for their child and the money could be used to pay for a range of education services, including private-school tuition.

The legislation declares, “It is the intent of the Legislature that parents, legal guardians, and others with legal authority over children in this state be able to seek educational services that meet the needs of their individual children by directing education dollars to follow each child. The Legislature affirms that parents and legal guardians are best suited to make decisions to help children in this state reach their full potential and achieve a brighter future.”

But OSSBA objects to the program, in part, because every school-age child in Oklahoma could benefit.

OSSBA estimated the average amount provided to each eligible student would be $5,800 and noted that more than 30,000 students currently attend private school. At the $5,800 per-pupil figure, the OSSBA analysis noted that translates into $174 million per year. That cost was avoided, and financial benefit indirectly provided to public schools, because families chose not to use the local public school. But under SB 1647, the per-pupil funding would instead go to the students’ families for education uses.

The OSSBA analysis also called that a “conservative estimate” because it does not include homeschool children, whose numbers are not tracked by the state.

The OSSBA analysis provides only a glimpse of the amount of financial benefit that public schools reap, directly or indirectly, from not having to serve thousands of children statewide.

According to the Oklahoma State Department of Education figures, Oklahoma’s public schools spent an average of $10,086 per student in the 2020-2021 school year.

At that rate, Oklahoma public schools would have spent $300 million had they served students who were eligible to attend public schools but went to private schools instead.

At the same time, the Coalition for Responsible Home Education estimates that nearly 23,000 Oklahoma students were homeschooled in 2015 and 2016. The actual number today is believed to be higher due to the impact of COVID shutdowns.

After accounting for homeschool students, the financial benefit public schools have received by offering a product rejected by more than 50,000 students’ families statewide surges to more than $534 million.

‘The Schools Think the Money Belongs to Them’

In recent years, as schools shifted to online learning during COVID shutdowns, academic outcomes have plunged in Oklahoma public schools. State testing data shows that the share of all Oklahoma public-school students testing at the “below basic” level, which indicates a child is more than a year below grade level, has grown from 30 percent of students in the 2018-2019 school year to 40 percent in 2020-2021 in all subjects and grades tested.

That has prompted many parents to withdraw their children from the public system. That a school can fail their children and financially benefit from driving those students away disturbs many parents.

Jennifer Johnson is an Owasso mother of three who began homeschooling when her local district stopped providing in-person instruction on a consistent basis and parents found the school’s online offerings to be lackluster at best.

She is among those who believe funds should follow the child.

“These funds were allocated to the students of Oklahoma, not to the schools,” Johnson said. “So it’s interesting to me that the schools think that the money belongs to them instead of the student when, really, it rightfully belongs to the students. The Oklahoma Empowerment Accounts would definitely make sure the students get that money allotted to them so that they can get the good education that they deserve.”

Even more disturbing to parental advocates is that some schools have financially benefited from student departures caused by mistreatment—and worse—at a local public school.

“The abuse is real,” said Robert Ruiz, executive director of ChoiceMatters, an Oklahoma organization dedicated to increasing education options for parents. “I mean, I just got off the phone with a mother who was talking about the abuse of her daughter. We have a whole bunch of families and victims that are coming forward with their stories.”

Issues with emotional, physical, and/or sexual abuse of students have been reported statewide, including at places like Bowring and Shawnee, Ruiz noted.

“These are crimes,” Ruiz said. “This is not just low academic performance. These are real crimes.”

In some instances, school officials have been accused of turning a blind eye to reports of abuse. When that occurs in rural districts, there are currently few avenues of escape for families, but SB 1647 could lead to the creation of new schools in those communities since funding would follow the child, Ruiz said.

“Laws like this could create options for some of these communities where some of these things are going on,” Ruiz said.

Despite the complaints raised by critics, supporters note that under SB 1647 public schools would still stand to reap financial benefit from students they do not serve, although that financial reward would be more constrained than under the current system.

Even if SB 1647 becomes law, public-school districts would still retain local tax funding dedicated for education. SB 1647 would allow only the state portion of the per-pupil allocation to follow a child, but does it not address local tax funds (such as property tax payments) or federal funding. Based on OSSBA estimates for SB 1647, public schools would still retain at least $4,286 for every student that uses an Oklahoma Empowerment Account to leave the public-school system.

That’s why Scafidi’s research shows public school districts in other states have financially benefited from school-choice programs like SB 1647 even when those programs allow students to leave the public system to attend a private school.

“They’re trying to scare parents and say that if you stay in a public school, your child is going to be losing out somehow,” Scafidi said. “But the truth is actually the opposite.”

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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