Report: Kentucky could lose $1.2 billion yearly by giving private schools tax dollars

A new report from the Kentucky Center for Economic Policy says diverting public money to private schools in Kentucky would siphon away at least hundreds of millions of dollars and put thousands of public-school jobs at risk.

In the November general election, Amendment 2 will ask voters whether they want to change the Kentucky Constitution to allow public dollars to go to charter, religious and other private schools.

Voters will answer “yes” or “no” to the question: “To give parents choices in educational opportunities for their children, are you in favor of enabling the General Assembly to provide financial support for the education costs of students in kindergarten through 12th grade who are outside the system of common (public) schools by amending the Constitution of Kentucky as stated below?”

The report, released Monday, examines the policies and impact on Kentucky education that will likely follow if the amendment is approved and shows the impact of voucher programs similar to those in other states, center officials said.

The Kentucky Center for Economic Policy is a nonprofit, nonpartisan organization conducting research, analysis and education on policy issues.

“For Kentucky, establishing a program proportional to what Florida, the largest state voucher program, now has in place would cost $1.19 billion annually from the state budget,” the report said. “That equals the cost of employing 9,869 Kentucky public school teachers and employees.”

“Even a much smaller voucher program just one-sixth the proportional size of Florida’s and smaller than the rapidly growing programs in Arizona, Indiana, Iowa, North Carolina, Ohio and Wisconsin would cost Kentucky’s budget $199 million, equivalent to employing 1,645 public school personnel.”

“If Kentucky implements a Florida-style voucher program and takes money from public schools to support it, (Fayette County Public Schools) could see a loss of $52 million budget reduction, which is equivalent to cost of employing 380 educators,” said Jason Bailey, Executive Director of the Kentucky Center for Economic Policy.

The report also maintains:

▪ In other states, 65 to 90% of voucher costs go to subsidize families already sending their children to private school or planning to do so — a group whose average household income in Kentucky is 54% higher than public school families. Providing vouchers to that group would cost the state hundreds of millions of dollars based on the numbers of Kentucky students already in private school.

▪ The cost of paying for vouchers will directly hit the state’s poorest rural areas the hardest because low property wealth makes them more dependent on state dollars for public education. Those districts almost entirely lack private schools and vouchers are unlikely to make setting up new private schools financially viable in many communities. The results will be tax dollars leaving rural districts entirely, with local resident’s state taxes paying for private education elsewhere.

▪ The costs of private school subsidies will also be high in the state’s most populous counties, where public schools are more likely to face a secondary budget impact of a shift in enrollment to private schools and privately controlled charter schools. Local public schools would continue serving the vast majority of students and those with the greatest needs.

▪ Local public schools would also continue facing many of the same fixed costs, which cannot be reduced proportionally with a decline in the number of students. More money will be spent overall on duplicative administrative expenses across public and private systems rather than in the classroom where it is most needed. And schools will be increasingly segregated and unequal both racially and economically.

Existing private schools in Kentucky tend to be concentrated in wealthier geographic locations. Just three counties — Jefferson, Fayette and Kenton — are home to 52% of the state’s private schools, the report said.

The report says Amendment 2 is on the ballot because the Kentucky General Assembly enacted a private school voucher program in 2021 and legislation was filed to expand the program, but the state Supreme Court ruled that it violated Kentucky’s constitution. States without such protections have recently increased spending on vouchers and school privatization at a rapidly growing costs to their budgets.

Rev. Rhondalyn Randolph, president of the Owensboro NAACP and two school superintendents who say their districts would be hardest hit if Amendment 2 passed, Casey Allen of Ballard County Schools and Paul Green of Carter County Schools, spoke with reporters Monday.

“There really isn’t a great reason for anyone in Ballard County to support Amendment 2,” Allen said.

In response, officials from EdChoice Kentucky, a group that supports Amendment 2, said in a statement Tuesday that “This report is a scare tactic that simply hasn’t come to fruition in other states.”

“ Educational choice has proven to lead to thriving, competitive public school systems while also allowing parents to have options, no matter their income level. Kentucky is no different - we can have great public schools while also empowering parents to make the right choice for their kids. It’s done in states around us and can be done here,” the statement said.