School vouchers, which use public funds to help families pay tuition at private schools, were the controversial centerpiece of Arkansas LEARNS, Gov. Sarah Huckabee Sanders’ education overhaul law passed last year. I believe the funding for vouchers, woven into the state’s complicated system for funding K-12 schools, violates the state constitution and moves us backward on thorny issues of equity that the state has been trying to address for decades.
The Arkansas LEARNS vouchers debuted last fall. In the law’s first year, eligibility was limited to special categories, such as students with disabilities and new kindergarteners; by the 2025-26 school year, all K-12 students will be eligible to apply. According to the Arkansas Department of Education’s first annual report, nearly 5,000 students are participating, with vouchers this year covering up to $6,672 per student in tuition or related costs.
How does the state finance these vouchers? The math can be a bit mind boggling. The first thing to keep in mind: Many vouchers go to kids who never would have gone to public school anyway. For students whose parents would have paid for private school even without aid from the state, the voucher is simply a state subsidy that will ultimately cost tens of millions of dollars, draining state money that could be used for economic development, rural health care and other worthy endeavors that are now underfunded.
Voucher advocates typically focus on the other students — the ones who opt out of the public school system, or never enter it to begin with, because of the voucher they receive. But if you follow the money, vouchers for these students are paid for by the local public school taxes that voters passed in 1997. Our state constitution expressly reserves those revenues for the use of local districts. The voucher scheme cooked up by the architects of LEARNS ignores this inconvenient fact.
How we got here
I want to provide a brief history which puts this voucher program in context. Over the years, the Arkansas Legislature has repeatedly recognized that small school districts have inherent challenges in providing the rich and varied curriculum needed to prepare students for the modern workforce or further study. Since World War II, Arkansas has been reducing and consolidating the number of school districts in the state so that schools can achieve the economies of scale necessary to efficiently provide an adequate and equitable education.
In 1994, Chancery Court Judge Annabelle Clinton Imber ruled that Arkansas’s school funding system was unconstitutional. In a series of related decisions that unfolded over the next 15 years, commonly referred to as the Lake View decisions, Arkansas courts found that some districts did not have enough state and local funding to provide their students with the equitable and adequate education required by Article 14 of the Arkansas Constitution.
Several fundamental principles emerged from the holdings in the Lake View cases.
The Arkansas Supreme Court recognized that some districts with larger local tax revenues had much greater resources than districts with lower millages and small tax bases. The Supreme Court also found that there should be a minimum amount of per pupil funding for all districts in order to provide all students with an adequate and equitable education. This amount was determined by extensive study, which resulted in a pro forma budget for a prototypical school of 500 students. To comply with the law, the state would have to ensure that it met that minimum funding level in every district.
How school funding works after Lake View
If you want to review the complex budgeting matrix today that resulted from Lake View, see here. But the important thing to know is that this budget process is meant to calculate the amount of “foundation funding” required to provide an adequate education to a student at the prototypical Arkansas school of 500 students. In other words, under Lake View, every single district must have at least the foundation funding amount per student.
In order to provide the funding to meet that “foundation” baseline in every district in the state, Arkansas voters passed Amendment 74 in 1997. Amendment 74 requires all districts to assess a minimum of 25 mills on all taxable property (known as the uniform rate of taxation, or URT). This millage produces the “local contribution” for school funding.
School districts still can and do choose to tax at higher rates if the voters in those districts agree to it. For example, Little Rock School District voters have approved a total of 46.4 mills.
The foundation funding amount is adjusted by the Legislature each year to account for inflation and other increasing costs. For 2023-24, the foundation funding amount was $7,618 per student. Every district winds up with at least that much.
The URT raises very different amounts of local contributions in different districts, because the assessed value of taxable property differs vastly from district to district. The total amount of taxes collected is not impacted by the number of students who attend public school in each district.
In almost all school districts, the URT collected does not generate enough money to provide the local district with the required per pupil foundation funding. The state is required to make up the difference, as ordered by the Lake View decisions.
Take this year’s foundation amount of $7,618 per student, and imagine a district that raised $3,000 per student through the URT. The state would then be obligated to provide $4,618 per student to close the gap, usually referred to as either “equalization aid” or “foundation aid.” The handful of outlier districts that raise all they need via the URT would then not receive any such aid. Statewide, the URT funds raised from local taxes typically cover around one third of total foundation funding, while state equalization aid makes up the difference.
What happens when you toss vouchers into the system?
The state’s public-school funding system, for all its complexity, was based on years of research-backed efforts. With the LEARNS vouchers, the governor and Legislature have done an abrupt about-face.
To see how this works, let’s return to the per-pupil funding system. If fewer students attend the traditional public schools in a district, the local tax revenue does not change. But with fewer students to serve, the amount of total foundation funding required goes down. And if the amount of total needed foundation funding is lower, then the URT revenue collected by the district is that much closer to covering it, which means the state winds up sending a little bit less in aid to make up the difference. (Here’s an example of how the math works.)
In other words, if vouchers succeed in recruiting public school kids to switch to private schools, local districts will wind up paying a higher share of the per-pupil cost to meet foundation funding levels and the state will wind up paying less.
If your head is spinning, try looking at it this way: Rather than thinking of an individual student, think of the total number of students in a district. Remember, under Lake View, the state has to ensure that funding is available to cover each student at least at the foundation level. As noted above, nearly all districts don’t raise enough via the URT to cover all the students at that level. Let’s say a district can only cover half of the students at the foundation level. Then the state comes in with equalization aid to cover the rest. In order to do so, for each extra student, the state has to chip in the full per-student foundation amount (again, this year that’s $7,618).
Hopefully that helps explain the way the math works out, which can be counterintuitive at first: Each student who leaves the district saves the state the full per-student foundation amount, with the district losing out on that same amount in equalization aid (a process that would repeat itself until the number of students got so low that the URT fully covered them and the state contribution fell to zero).
Keep in mind that the state set the rules and created the system for vouchers. The state has incentivized public school students to leave traditional schools, knowing full well that the ultimate cost of the incentive falls on the local school district.
The way that “savings” accrue when fewer students attend public schools is part of the budget math that’s supposed to make the voucher program work. LEARNS sets the voucher amount as 90% of the per-student foundation funding the previous year. That means that by law, the amount of the per-student voucher ($6,672 this year) is roughly 10% less than the per-student foundation funding to attend public school. Therefore, for each student who switches from public school to private school via a voucher, the state will save money on net — and send less equalization aid to the relevant district.
The voucher system’s budget problem
The overall budget picture for LEARNS is more complicated, in ways that may lead to massive cost overruns. The problem: Not all voucher students are moving over from public schools. In fact, most aren’t.
In the program’s first year, 95% of LEARNS voucher students did not attend public school the previous year. That includes kindergartners, and it’s impossible to know for sure how many of those would have attended private school with or without the vouchers. But this basic pattern has repeated itself in voucher programs in other states across the country: A significant majority of voucher recipients are students who didn’t come from public school and likely would have enrolled in private school either way.
Those students do not save the state any money. They represent a brand new cost, with the state paying the tab for the full cost of the vouchers — roughly nine times higher, per-student, than the savings from a student who switches from public to private. In Arizona’s voucher program, which inspired Arkansas LEARNS, this led to massive budget overruns. It’s a problem that the Arkansas Legislature, which is the ultimate arbiter of LEARNS funding, will have to face as the program is fully phased in over the next two years.
The voucher system’s constitutional problem
None of this changes the fact that many vouchers are essentially funded using money that the state formerly sent to local districts. Remember, the state saves exactly the foundation funding amount for every student who leaves and the local district loses exactly the foundation amount in terms of the total state equalization aid it receives. And if a student leaves a public school district, the money the state saves by shifting per-student costs of foundation funding to the district is conveniently about the same cost incurred by giving the student a voucher. If you simply connect the dots, local URT funds are the source of state voucher funding for such students. That’s an unconstitutional misuse of tax money reserved to the constitutionally described “common school fund,” in direct contravention of Article 14, Section 3 of the constitution.
The Arkansas Supreme Court has made it clear that the local contribution to foundation funding is and remains local revenue that belongs to local districts, even though the state plays a role in its collection and distribution. (See, Kimbrell v. McClesky, 2012 Ark. 443 (Ark. 2012). If vouchers push more of the per pupil cost to local districts, that violates Kimbrell — and the constitution.
Because a state voucher is less than the amount of foundation funding required under the Lake View decisions, the State of Arkansas is actually spending less total state money on a student enrolled in a traditional public school if that student elects to receive a voucher instead. That may sound good at first, but in a state that is far below average in education, it is unlikely the real problems will be fixed by moving students around and leaving traditional districts with less money and a higher percentage of students of greatest need. This is just a way to shortchange education. And the overall cost to the state, as private school students elect to receive the state subsidy, will skyrocket, just like it is doing in Arizona.
What this means for public school districts
Voucher proponents may argue that if a local district has fewer students, the local tax base can support more local funding per pupil. That may make some sense, but the sudden turn has put districts in the lurch. Long before LEARNS, and based on the state-mandated funding mechanisms, local districts have built facilities, hired staff and incurred fixed and recurring costs in order to comply with the Lake View decision and also to comply with all sorts of state regulations.
The state then changed the rules. But the public school district’s overall costs do not go down much at all if students are plucked out of different schools and from different grades. It costs about as much to run a classroom with 23 students as it does to run a classroom with 25 students.
The teacher salary remains the same either way. Basic utilities or maintenance costs for the school are about the same either way. An analogy to airlines is helpful here: The cost of flying a plane half-full is almost as much as flying with the cabin full of paying customers.
There are many more contradictions in all of this. For example, in the past the state said we need to consolidate small school districts; now, it’s funding the exodus of students from those traditional districts.
Most importantly, the Arkansas Constitution says that the URT proceeds belong to the local district. The new funding mechanism created by the state effectively takes students from the public system and takes the money along with them. As far as I can recall, this was not discussed when the LEARNS vouchers zipped through the Legislature last year.
How the voucher system impacts our students
Vouchers are especially unfair to children with special needs who require and deserve a greater commitment from our state than a voucher. People with disabilities are entitled to equal protection under the law. Traditional school districts spend what it takes, or at least try to, to serve all students. I don’t favor vouchers in any form, but if some children receive the perceived benefits, then all children should receive a similar benefit, regardless of cost. The voucher program has no additional funding for disabled students. Unequal treatment like this is unconscionable and violates at least the spirit, if not the letter, of the Individuals with Disabilities Education Act.
It is fundamentally wrong for the state to cook up a complicated funding scheme when the net result is that state support for local districts is reduced, and children are incentivized with public money to attend private schools that will almost surely be segregated by race and income. Even with a voucher, many families still won’t be able to afford the state’s top private schools. Consider the fact that around 79% of voucher students this year are attending schools that charge some or all students annual tuition greater than $6,672, the amount of per-student funding available this year via a voucher. Around 38% attend schools with tuition rates above $10,000 for at least some students.
Vouchers also won’t improve overall student performance — in fact, recent research based on the most robust available studies has found that vouchers actually seem to make performance worse, leading to learning loss and measured declines that one education researcher described as “on par with what the COVID-19 pandemic did to test scores, and larger than Hurricane Katrina’s impacts on academics in New Orleans.” They will segregate and stigmatize children.
A fair-minded court should find that vouchers are unconstitutional under the foundational holding in Brown v. Board of Education. These segregationist policies undermine our democracy as we use government money to sort ourselves into groups based on race, ethnicity, culture and religion. The country was founded on a different ideal, although one not fully implemented then, or even today. We are now hurtling back to a darker past.
The Legislature’s errors, and what they will cost our children
The legislative majority ought to think a little harder next time before it rushes to pass a law that has such earth-shaking consequences, many of which it apparently never considered. We deserve a more thoughtful and thorough legislative process.
Why dump an omnibus wad of paper on the Legislature and insist that it be log-rolled with no real debate? Answer: It’s all about politics, and not about education, fairness or equity. The proponents of these vouchers forgot about the Arkansas Constitution when they introduced their canned voucher legislation.
Until you go to a struggling school and see for yourself how all of this shakes out, this is all just numbers on a page.
For just a minute, forget about all of the math, the complex statutes, the court rulings and the political wrangling. Imagine you are a student from a struggling family, and you are in a classroom that has almost no middle-income kids in it. All of those kids left and are now in private schools funded at least in part with state dollars. The teacher is doing the best he or she can, but you don’t understand the lesson. As a student you want something better, but the teacher has 20 other students who also need attention and special help. If only a few students needed extra help, the teacher would probably have time to help you understand, but the bell rings. You leave the room confused and disheartened.
Public education was originally predicated on a single system of public schools that served everyone. Some students needed very little help to learn. Some students helped others learn. Some students needed extra help, and there was time for them.
The governor and the Legislature have abandoned that vision. Instead, their focus seems to be pulling students and funding out of public schools altogether. Until we get some clear thinking in the capitol, Arkansas will be last in just about anything that matters to the daily lives of Arkansans of greatest need.