03/24/2025
School Vouchers as Texas Tax Policy
The 89th Texas Legislature’s school voucher proposals raise a crucial question: Should the majority subsidize a select few, or should vouchers be used to help students in poverty develop their long-term human capital? School vouchers represent the latest effort by the Texas Legislature to divert funding from traditional public schools, affecting the majority of Texas students. Below is an explanation of private school vouchers as a de facto tax credit, charter schools as a tax dodge, and the continued underfunding of traditional public schools.
Private School Vouchers as a Tax Credit
Private school vouchers effectively serve as a tax credit for wealthy families. According to PrivateSchoolReview.com, the average cost of private school tuition in the Dallas-Fort Worth metroplex was $13,850 in 2022. Consider the financial impact of a voucher:
A student’s family resides in a home appraised at $1,000,000. In Lewisville ISD, school district taxes are assessed based on property value after a $100,000 homestead exemption, at a rate of $1.1187 per $100 of taxable value:
$1,000,000 – Appraised Value
-$100,000 – Homestead Exemption
$900,000 – Taxable Value
x 1.1187 – School District Tax Rate
$10,068 – Annual School District Taxes
Without a voucher, the family pays $13,850 in private school tuition and $10,068 in school taxes, totaling $23,918.
With a $10,000 voucher, their total education costs drop to $13,918—shifting the financial burden to taxpayers while benefiting wealthier families who can already afford private tuition.
Charter Schools as a Tax Dodge for the Texas Legislature
The Texas Legislature established open-enrollment charter schools in 1995 without granting them taxing authority. Instead, they receive state funding based on the average per-student amount allocated to traditional public schools. This creates disparities: half of Texas districts receive less funding per student than charters, while the other half receive more.
Charter schools lack authority to levy property taxes, particularly for facilities and infrastructure (Interest & Sinking funds) which diminishes funding for their instruction of students. The result? Lower per-student education costs, but also underfunded charter schools that struggle to afford qualified staff, classrooms, instructional programs, and essential resources.
The Legislature’s Restrictions on Public School Funding
The Texas Legislature has consistently restricted public school funding by limiting maintenance and operations (M&O) tax rates:
Senate Bill 2 (1997) – Required voter approval for certain tax increases.
House Bill 1 (2006) – Compressed school property tax rates.
House Bill 3 (2019) – Further reduced rates and introduced automatic tax compression.
For districts with declining enrollment, like Lewisville ISD, automatic tax compression, combined with inadequate increases in per-student funding, leads to continuous budget cuts—forcing reductions in instructional programs, staff, resources, and even school closures.
A More Equitable Approach: Vouchers for Students in Poverty
Instead of subsidizing wealthier families who can already afford private education, what if vouchers were targeted to students in poverty? A $10,000 public school voucher could allow these students to transfer to high-performing public schools, with funds covering both tuition and transportation, addressing a major barrier for low-income families.
Such a policy would increase competition among public schools for underserved students, driving improvements in educational quality while ensuring funds remain within the public education system.
The Texas Legislature’s school voucher proposal is not a solution for improving education—it is a policy that prioritizes private interests over the needs of the majority. By diverting public funds to private schools, vouchers serve as an indirect tax credit for wealthier families while leaving public schools, particularly those serving disadvantaged students, with fewer resources. Charter schools, similarly, function as a tax dodge that shifts financial responsibility away from the state, further weakening the traditional public school system. Instead of funding a system that exacerbates educational inequality, Texas lawmakers could consider policies that invest in all students, particularly those in poverty. A public school voucher targeted at low-income students could provide real opportunities by improving access to high-performing schools and critical resources. Public education is the foundation of Texas’ future workforce and economy. If legislators truly want to strengthen the state’s education system, they must focus on equitably funding public schools rather than implementing a regressive voucher scheme that benefits a privileged few.
