MIDLAND, Mich. — Michigan Student Opportunity Scholarships would take less than 1% of the state School Aid Fund’s annual revenues, according to a report released today from the Mackinac Center for Public Policy and EdChoice.
The scholarships would have a minimal effect on state and local school funding and may even result in savings for some school budgets, the report finds. It would also expand parental choice and provide thousands of students with a host of new educational options.
The report, titled “Michigan Student Opportunity Scholarships: Overview and Fiscal Analysis,” examines the fiscal impacts of adopting the Opportunity Scholarship plan that was passed through the Michigan Legislature but vetoed by Governor Whitmer in November. A citizen-led initiative is seeking to reverse that veto.
The Student Opportunity Scholarship plan would authorize income tax credits for individual or corporate donations to qualified scholarship-granting organizations. Low- or middle-income families, or those with special needs students, could apply for scholarship accounts to use for school tuition, tutoring and other education services.
“By giving students and families greater access to flexible education spending, enacting Student Opportunity Scholarships would represent a breakthrough for Michigan,” said Ben DeGrow, director of education policy and co-author of the report. “The program’s likely fiscal benefit offers an added bonus that could be a big win for education in our state.”
The report disproves the drastic claims opponents have made about that the plan’s impact on state and local school budgets. In fact, the analysis suggests schools might benefit financially on a per-student basis. Total Michigan K-12 spending was $14,191 per pupil in 2021.
As long as the state’s cost to support the student in the choice program is less than the amount of the foundation allowance (currently $8,700), the state financially benefits from each participating student. The precise impact of Michigan’s program will depend on the share of students who opt out of public schooling and the average scholarship account size. Most of the likely scenarios show a net savings.
These benefits are not surprising. The advantages of school choice both academically and fiscally have been researched extensively: 68 out of 73 studies examining the fiscal effects of choice programs found the programs generate positive effects.
“Michigan is primed to join the more than 30 states with education choice programs. There are many reasons to adopt these programs and expand educational opportunities for families, with potential fiscal benefits being one happy byproduct,” said Marty Lueken, director of EdChoice’s Fiscal Research and Education Center. “Ultimately, education choice is about putting education dollars directly into the hands of families for them to decide how best to spend them on their own children’s education. After all, parents are the ones who know what’s best for their own children.”
Learn more about Student Opportunity Scholarships here.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
Please consider contributing to our work to advance a freer and more prosperous state.