Education Savings Accounts (ESAs) will not decimate public school budgets, a report released today by the Josiah Bartlett Center for Public Policy shows. In fact, even using a high average cost for each ESA and a high ESA take up rate of 5 percent, the report shows that every school district in New Hampshire would keep more than 98 percent of its operating budget.

“Education Savings Accounts will not defund traditional public schools,” Josiah Bartlett Center Interim President Andrew Cline said. “Even using opponents’ most dire prediction, in which 5 percent of New Hampshire students take advantage of ESAs to pursue educational opportunities outside of their assigned district, districts hold on to more than 98 percent of their funding.”

The report, “Will Education Savings Accounts Decimate Public Schools? Putting ESA Funding in Context,” used a high average ESA cost that included what is called “differentiated aid,” the extra funding for students that have additional needs, such as having an Individualized Education Program or being eligible for free or reduced-price lunch. Under Senate Bill 193, the ESA bill being considered in the Legislature, ESA funding would consist of 95 percent of a student’s state base adequate education grant plus most differentiated aid, if eligible.

Based on a high average ESA cost, the report calculates the financial impact on school districts if 1 percent or 5 percent of students choose an ESA. The report finds that if 1 percent of students leave statewide, school districts keep 99.7 percent of their operating budgets. If 5 percent of students leave, districts keep 98.7 percent of their budgets. Even under the 5 percent scenario, every district keeps more than 98 percent of its budget. These figures show the financial impact without the stabilization grants that are included in the latest House version of the bill. With those grants, the impact would be even smaller.

The report also considers whether a 1 percent or 5 percent enrollment decline would be unusually large. Looking back at state enrollment data from 2010-2015, the report finds that the average enrollment change over that time was a drop of 7 percent. That average decline is 40 percent larger than the 5 percent decline that some ESA opponents have used to portray ESAs as a massive threat to public school districts.

The report also calculates the amount of stabilization grant money each district would receive under the latest version of Senate Bill 193. The House version of the bill would distribute stabilization grants if a district loses at least 1/4 of 1 percent of its state adequate education grant funding. The grants would replace everything above 1/4 of 1 percent. The report shows how much money each district would receive in stabilization grants if 1 percent or 5 percent of students choose an ESA. If 1 percent of students choose an ESA, the stabilization grant would come to $950 per ESA. If 5 percent of students choose an ESA, the stabilization grant would come to $3,666 per ESA.

For the full report, click here:

ESA District Financial Impact

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