The Fiscal Effect of Eliminating the Louisiana Scholarship Program on State Education Expenditures

Abstract

Eliminating the Louisiana Scholarship Program has been proposed as a way to reduce state education expenditures for the upcoming fiscal year. Drawing upon Louisiana’s education funding formulas, we determine that the overall effect of removing the program will increase state education expenditures. It is true that the state would avoid $41.6 million of spending if the voucher program is eliminated. However, each current voucher student who returns to a public school increases the local district’s necessary education expenditures without increasing the local tax revenue for schools, obligating the state to provide increased funding to the district. While our results depend on which assumptions we use, our analysis generally indicates the net effect of eliminating the program is an increase in state funding to local districts. In particular, we find evidence of the need for additional funding in nearly all scenarios in which the program is eliminated unless at least 13.52% of current voucher users stay in private schools and pay tuition out of pocket or through other private means.