Policymakers considering school choice proposals want to know about the fiscal effects of these programs on taxpayers and public school districts. Enter the K-12 School Choice Calculator (SCC). The SCC is a tool for legislators, fiscal analysts, researchers and others who are interested in learning about the fiscal impact of private school choice programs in their states.

The SCC provides short-run and long-run estimates for the fiscal effects of an education savings account (ESA) program, based on selected parameters, on state and local taxpayers combined.

This tool is a collaborative effort between EdChoice’s Fiscal Research and Education Center and Reason Foundation. If you have feedback about this tool or would like to request training, please share your thoughts with us at marty@edchoice.org. We welcome all input.

Education savings accounts allow parents to withdraw their children from public schools and receive a deposit of public funds into government-authorized savings accounts. Those funds can cover a variety of educational resources such as private school tuition and fees, online learning programs, private tutoring, educational therapies, community college costs, and other education expenses.

Users may toggle the following variables to generate fiscal effects estimates for ESA programs in their states.

Two important assumptions for a fiscal analysis of a choice program are the participation rate among eligible students currently enrolled in public schools and the participation rate among eligible students currently enrolled in non-public schools.

For the “Take-Up Rate Public” input in the SCC’s Select Program Inputs box, the default is set to 1%. This is based on the overall experience of choice programs after states introduce them. Based on an EdChoice analysis, the overall average take-up rate during the first years of education choice programs that operated between 1990 and 2021 was 0.46%. The rates for programs in their second and third years were 0.86% and 1.12%, respectively. By Year 10, the overall average take-up rate for programs in the analysis was 2.62%. We set the default take-up rate at 1%. Some states may have different situations today, and we encourage users to set different rates as they see appropriate for their context.

For the “Take-Up Rate Non-Public” input in the SCC’s Select Program Inputs box, the default is set to 20%. This is based on recent experience with New Hampshire’s ESA program. Benjamin Scafidi and Jonathan Butcher used data from this program to approximate the percentage of eligible students from outside the nonpublic school system who participated in the program. New Hampshire’s program allows students from families earning up to 300% of the federal poverty level to join without the prerequisite of prior enrollment in a public school. Thus, students from both public and non-public school settings can participate in the program, as long as they meet the household income requirement. Scafidi and Butcher’s analysis, based on information from the New Hampshire Department of Education, indicated that 21.1% of eligible students who were enrolled in private and home school settings accessed the ESA program during its first year.

In contrast, some media reports using data from Arizona's universal ESA program on new students suggest a notably higher take-up rate among eligible students outside the public school system, about 60%. It's important to note that Arizona's extensive history of private choice programs since 1997, encompassing four tax-credit scholarship programs, sets it apart from most states. These programs provide families with an abundance of educational choices for K–12 education. Consequently, many students were already engaged in the state’s tax credit scholarship programs before transitioning to the ESA program. Given that the tax-credit scholarship programs limited eligibility and participation in different ways, the ESA program’s overall take-up rate among nonpublic school students is likely lower than that for new students. The key takeaway here is that context matters, and users of this tool may want to use a different participation rate instead of the default rate.

Isolating the fiscal effects of a choice program to a single group of taxpayers would require applying each individual state’s school funding formula. Doing so for just one program would necessitate a significant undertaking. For this reason, the SCC generates lower bound (short-run) and upper bound (long-run) estimates for the fiscal effects of educational choice programs that accrue to state and local taxpayers combined. This approach, in contrast to tracking dollar flows which demonstrate a budgetary effect, is appropriate for a 50-state calculator—and because taxpayers in each state pay both state and local taxes.

The SCC can provide a fiscal picture for choice programs in each state that is useful for examining the extent to which various program design features generate net fiscal benefits or net costs overall.

Calculations are based on federal data for the most recent year available at the time this tool was published. These data may be lagged compared to similar data reported on your state’s education department website.

EdChoice is a 501(c)(3) nonprofit, nonpartisan organization. Our mission is to advance educational freedom and choice for all as a pathway to successful lives and a stronger society. We are committed to understanding and pursuing a K–12 education ecosystem that empowers every family to choose the learning environment that fits their children’s needs best. EdChoice is the intellectual legacy of Milton and Rose D. Friedman, who founded the organization in 1996 as the Friedman Foundation for Educational Choice. The contents of this publication are intended to provide empirical information and should not be construed as lobbying for any position related to any legislation.

Reason Foundation’s mission is to advance a free society by developing, applying, and promoting libertarian principles, including individual liberty, free markets, and the rule of law. We use journalism and public policy research to influence the frameworks and actions of policymakers, journalists, and opinion leaders.

Reason Foundation’s nonpartisan public policy research promotes choice, competition, and a dynamic market economy as the foundation for human dignity and progress. Reason produces rigorous, peer- reviewed research and directly engages the policy process, seeking strategies that emphasize cooperation, flexibility, local knowledge, and results. Through practical and innovative approaches to complex problems, Reason seeks to change the way people think about issues, and promote policies that allow and encourage individuals and voluntary institutions to flourish.