GUEST BLOG: How would ESA’s impact school funding?

Scott Williams, a Board Member of Christian Fellowship School in Columbia, MO, shares his views on how Empowerment Scholarship Accounts would impact school funding in this guest blog. Williams highlights the benefits that ESA’s would provide to students and reveals just how much private schools are already saving the public school system!

One of the primary criticisms of Empowerment Scholarship Accounts (ESA’s) is that ESA’s will reduce funding for public schools.  The facts are that current legislation for ESA’s will increase the overall availability of education funds for Missouri’s children, while having a negligible and very possibly a beneficial effect on funding for Missouri’s public schools.  

ESA’s will be funded through tax credits, which are not state revenue, so legally there is no revenue affected by ESA’s.  Nonetheless, tax credits do earmark potential general revenue funds for specific purposes.  In the case of current ESA legislation, up to $50 million in tax credits may be designated for a scholarship program to help parents with limited incomes access the school(s) of their choice.  In other words, these tax credits have the potential of creating $50 million in education funds which previously did not exist.  More money for our children’s education!  

So how does this affect public schools?  In 2020, approximately 35 percent of state general revenue or $3.5 billion was used to fund public k-12 education. If $50 million of potential general revenue is designated for ESA’s, the potential loss in state revenue to public schools could be $17.5 million (35% of $50 million), a reduction of one half of one percent.  However, when federal and other funds received for public schools are considered, the amount appropriated for k-12 education in Missouri in 2020 was $6.3 billion.  This makes the overall revenue reduction from public schools due to tax credits for ESA’s close to one-fourth of one percent, a negligible amount.  However, even this negligible amount is compensated by current legislation which requires continued per pupil funding for five years to a school district if a student receives an ESA and leaves the public school.  

How can ESA’s benefit public school funding?  My local public school district, Columbia Public Schools (CPS) receives 62 percent of its funding from local sales and property taxes.  This funding is available regardless of enrollment, whereas state revenue, making up 31 percent of CPS’s budget, is tied to daily attendance or enrollment. (About seven percent of CPS’s funding comes from federal funds.)  If a few of CPS’s 19,000 students access ESA scholarships to attend a school more suitable to their needs, less than one-third of the funding per student is lost by CPS, and therefore more money is available per student.  In fact, the increase is considerable when considering current ESA legislation which requires continued per pupil funding for five years to a school district if a student receives an ESA and leaves the public school.

Historically, private and home schools save state and local governments millions of dollars every year.  The cost of educating a student at Columbia Public Schools is $12,326 per year.  If there are approximately 2,000 private school and homeschool students in the Columbia area, the savings to CPS is $15.3 million annually for local tax money received, but not expended on additional students (62% of $12,326 then multiplied by 2,000).  Those same students are saving the state $7.6 million in student per diems.  In addition, CPS saves a capital expenditure of $35 million to $75 million by not having to construct another school building.

Despite the potential for more financial resources becoming available to Missouri children and many local public schools benefitting from ESA’s, the most significant aspect of ESA’s is that they give parents with limited incomes the opportunity to enroll their child in a school where the child has the greatest potential for success.  We know success in school can change the trajectory of a child’s life, their future, and future generations.