TN School Voucher Bill Will Cost Taxpayers Billions

When it comes to state funding for public schools, Tennessee consistently ranks among states around 44th. In 2023, Tennessee earned an F in funding level, an F in funding effort, and a C in funding distribution.  

When it comes to state support for school vouchers, however, Tennessee is pushing to be among national leaders.  And if the current school voucher legislation passes that is now being crammed through the legislative process, Tennessee funding for public schools will take another huge hit.  

How big a hit?  Conservatively, the Republican voucher program, which they call Education Freedom Scholarships (EFS), will result in annual state expenditure increases of over $340,000,000.  So every three years Tennessee taxpayers will pay over a billion dollars for 2-5% of Tennessee's K-12 students to attend private schools, either secular or sectarian.

The information below is from a memo dated February 26, 2024 by the Tennessee General Assembly Fiscal Review Committee.

• Due to the universal nature of the program, it is assumed that students already attending
private school will seek the additional funding through the EFS Program.
• Based on school voucher program data from other states and the large pool of private
school students that would be eligible for the EFS, it is estimated that 47,000
scholarships will be awarded in the 2025-26 school year.
• The EFS Program is projected to grow in subsequent years following the 2025-26 school
year. However, due to the lack of multi-year data from other school voucher programs
across the country and different factors amongst those programs, a precise growth
estimate cannot reasonably be determined.
• The total amount of scholarships awarded will result in an increase in state expenditures
estimated to be:

o $141,500,000 (20,000 x $7,075) in FY24-25;
o $343,147,000 (47,000 x $7,301) in FY25-26; and
o Exceeding $343,147,000 in FY26-27 and subsequent years.

• The estimated annual growth in the program is conservative due to a limited amount of
data from other states with similar programs and the inability to establish participation
trends in those programs.
• Without a limitation on the number of participants beyond year one of the program, the
fiscal liability to the state created by the proposed legislation is significant.
• Should all 105,503 private school students receive a scholarship in FY25-26 (year two
of the program), the fiscal impact for FY25-26 would be an additional increase in state
expenditures of $572,506,018 [(105,503 x $7,406) - (47,000 x .60 x $7,406)] (p. 3).