John Merrifield, Ph.D.
is a professor of economics at the University of Texas at San Antonio.
is president of The Heartland Institute, a nonprofit research organization with offices in Chicago andWashington, DC. More complete biographies appear on page 19. © 2011 The Heartland Institute and E.G. West Institute for Effective Schooling. This report does notnecessarily reflect the opinions or views of the institutes. Nothing in this report is intended to influence thepassage of legislation. More information about the institutes appears on pages 19-20.
Net savings to the state would beapproximately $2 billion in the firsttwo years of the program.
Budget Impact of the TexasTaxpayers’ Savings Grant Program
ByJohn Merrifield, Ph.D. and Joseph L. Bast
This study reports the results of an independent examination of the likely savings to taxpayers of an “education savings grant program” for the State of Texas. The authors do not comment on anyaspect of the bill other than its likely effect on the state government’s biannual budget. Thisreport neither endorses nor questions the specific language or design features of the proposedlegislation.
1. Summary of Findings
The Taxpayers’ Savings Grant Program(TSGP) is a very concise piece of legislation,apparently intended to address the state’slooming biannual budget deficit by reducing enrollment and associated costs in the state’s publicK-12 schools at a time of budget shortfalls. By reimbursing parents and legal guardians for “theamount of actual tuition costs or sixty percent of the state average per-pupil expenditure,whichever is less,” the state should save money every time a child is moved from a public to aprivate school.The TSGP was submitted to the authors for an independent examination of its likely fiscalimpact. Using the assumptions and methodology described in this report, government data onenrollment levels, and three independent estimates of the probability of parents choosing privateschools under such a program, the authors determine the program would generate a net savingsto the state of approximately $2.0 billion in the first two years.