Predicting the Impact of Education Choice on Public Schools

By Jim Schiele

Growth Within Education Options

The Texas Education Agency’s (TEA) enrollment reports confirm that nontraditional models, including charters, homeschooling, and private schools occupy a growing share of education choices in the state.

In Texas, homeschooling continues to rise sharply, with an estimated 800,000 homeschool students withdrawing from public or charter schools to homeschool between 1997-2022, according to the Texas Homeschool Coalition.

Charter schools in Texas have seen an average enrollment increase of 11% each year, over the past ten years, according to the Texas AFT, a union of public school employees. Texas Public Charter Schools Association says that more than 420,000 students attend public charter in the state, with 76,000 on waiting lists.

Projected Cost of Vouchers from the Texas Legislative Budget Board

The Texas Legislative Budget Board predicts vouchers will reallocate money from public schools to private ones. The strain on public school district budgets may reduce funds that the community may see as fixed, such as the number of schools, some administrative salaries, facility maintenance, and utilities. The revenue to cover those costs could be significantly reduced. The Legislative Budget Board has estimated the cost of the voucher system will grow substantially in the near future.

• $1 billion in 2027
• $3.3 billion by 2028
• $3.7 billion by 2029
• $4.8 billion by 2030

Projecting the Impact on Enrollment

Local public school districts and their demographers should assume persistent upward migration into charters, home schooling, and voucher systems, unless strong evidence suggests otherwise.

To forecast enrollment effectively, Texas districts must incorporate both local evidence and national historic data into their projection models. With 30 states offering some sort of private school choice option, demographers should look at the experiences in those states to develop a projected migration rate to these alternate options.

More than 700 Texas schools have been approved to participate in the state’s school voucher program, focused in major metropolitan areas, according to Spectrum News. If a charter school or private school is being established in or near your district, that may change the historic trends your district has seen over the past decades.

Districts should include an annual homeschooling drift factor in projection models. Analyzing address data can identify which students are no longer attending public school.

Projecting the Impact on Budgets

Since enrollment is closely tied to the public school budgets, enrollment changes will also affect the amount of money school can spend.

Delay Hiring or Hire Conservatively

Given personnel costs typically consume 80 percent of budgets, develop staffing triggers tied to enrollment thresholds. In many cases this may delay the hiring process, however, this delay may be necessary to prevent hiring too many employees.

As the district looks toward addressing enrollment impacts, consider:

• Phasing in adjustments over multiple years, to avoid disruption to educational services
• Avoid long‑term commitments funded with one‑time money (ESSER cliff lessons apply)

Maximize Facility Efficiency

Given the pressure on enrollment, districts should look at additional or alternate usage of facilities:

• Consolidating schools, administrative buildings, athletic facilities
• Leasing or selling unused land and building space
• Converting facilities for multipurpose community use
  Cities are under financial pressure in Texas just as school districts are. In many instances the available facilities could be used by both entities as opposed to the construction of new facilities by either entity. There have been examples of buildings housing both city services, county extension offices, and school district administration offices.

Manage your Fund Balance Closely

Enrollment volatility creates fiscal uncertainty. Fund balances should have a minimum of 90 days of operations, but more if a district is fast growth, or has declining enrollment. If your district projects an enrollment difference of three percent or more, consider the following:

• Increase contingency reserves
• Maintain conservative revenue assumptions
• Use multi‑year projections with multiple scenarios
  Allow your models to run “what if” scenarios and what the impact on fund balance will be.
• Avoid using fund balance to fund recurring expenses
  Fund balances should only be used for one-time costs with a plan to replace the funds.

Communicating Your District’s Value Proposition, Building Trust

Parents may choose charters, homeschooling, and private schools because they perceive their child is getting a better education. Public school districts can respond and stabilize enrollment by promoting what makes their schools strong options.

• Highlight specific curriculum, programs, magnet schools that differentiate your district
• Promote college and career readiness across multiple paths
• Advertise unusual educational offerings
• Add instruction methods or programs as needed to attract students

Use your website, social media channels, local events, and board meetings to promote your district’s programs.

Beyond your educational offerings, Texas school districts should be guided by transparency that builds trust with local stakeholders.  

• Share transparent enrollment and budget data
• Explain how charter, homeschool, and voucher dynamics affect district’s finances
• Highlight district innovations and quality improvements

Working Within the System

There are also ways that public schools can work with students who are already in alternate education systems. Districts can offer classes in a cafeteria style program, especially for the homeschool student or voucher student. There are opportunities to market programs to those communities.

In addition, 1882 agreements can offer a way to stave off enrollment losses, by creating a partnership with charter schools. This not only allows for new programs to be marketed and offered by public schools, it can also create new revenue streams through the additional funding.

Public schools should also formalize their process on evaluating and documenting students for an IEP under Individuals with Disability Education Act (IDEA). Public schools can be reimbursed for each student who is evaluated, including students attending private schools. These evaluations may be compensated at up to $1,000 each, if it fits within the Full Individual & Initial Evaluation (FIIE) requirement.

Navigating a New Environment

Texas school districts must now navigate a competitive educational environment marked by charter growth, expanding homeschooling, and the likelihood of ongoing voucher enrollment increases. By integrating trend data into enrollment models, preparing multi‑scenario budgets, adapting program offerings, and looking for partnerships with parents and charter schools, districts can stabilize their financial footing and continue delivering strong educational opportunities.

We can work with you to develop a plan to address these challenges. If you have any questions or thoughts, please let us know. 

Jim Schiele is Linebarger’s School Financial Consultant. He offers free assistance to Linebarger school district clients as they navigate budgets and meet financial deadlines. He can be reached at jim.schiele@lgbs.com.

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