Heartland Ideas

Taxpayer Savings Grants

May 31, 2011, 3:47 PM
April 10, 2015, 4:33 PM
Heartland Institute President Joseph Bast testified before the Texas Senate Education Committee on August 24, 2012 in favor of the Taxpayer Savings Grants.
Read his testimony here.

Originally proposed in Texas in 2011, Taxpayer Savings Grants is a new approach to advancing school choice. While it may not be the best approach for every state, it’s a perfect fit given the problems Texas faces and the way it finances its schools. 

On April 7, 2015, the Texas state Senate Education Committee voted 8–3 to pass Senate Bill 4, which would establish a Taxpayer Credit Scholarship Program. The bill by Sen. Larry Taylor (R-Galveston) incorporated some pieces of SB 276, a robust Taxpayer Savings Grants bill authored by Donna Campbell (R-New Braunfels).

Under Taylor’s proposal, about 10,000 low-income children would be eligible for private school scholarships. Read Heartland experts' response to the vote.

What is the Taxpayer Savings Grant Program?

The original bill to create the Taxpayers’ Savings Grant Program (TSGP) in 2011 read as follows:

1. Any parent or legal guardian of a school-age child who resides in Texas and is enteringkindergarten or attended a public school for all of the academic year prior to their participation in this program, who is willing to help the State of Texas save money by accepting less than the average per-pupil maintenance and operations expenditure in the district in which they reside, may receive reimbursement from the state for tuition paid for enrollment of said child at a private school in the amount of actual tuition or sixty percent of the state average per-pupil maintenance and operations expenditure, whichever is less, and the gratitude of the State of Texas.

2. Within 45 days of the passage of this Act, the Comptroller shall adopt rules solely to effectuate reimbursement and prevent fraud in financial transactions under this program. Such rules shall include the method for counting Taxpayers’ Savings Grant students in the Foundation School Program and the consequent savings therefrom. No funds from the Available School Fund shall be used for Taxpayers’ Savings Grants.

Is it a voucher or tax credit plan?

The Taxpayer Savings Grants Program (TSGP) is a budget reform proposal, not a school reform proposal. This is why it is administered by the state Comptroller’s office rather than the Texas Education Agency, and why the whole proposal  is only five sentences long!

The TSGP differs from voucher and tax credit plans in several ways. Unlike voucher plans, enrollment isn’t capped, there are no means tests, no new regulations on participating schools, and no enrollment lotteries. Unlike a tax credit plan, participation is not limited to people who pay state taxes, every child receives the same sized grant, and there are no “scholarship granting entities” standing between parents and the schools they choose. 

Benefits to Students, Teachers, and Taxpayers

Allowing parents to choose which schools their children attend is a powerful way to promote student achievement as well as reduce spending.

Parents respond to school choice by becoming more involved in their children’s education, which is strongly correlated improved academic success. Parents who are empowered by school choice – who know their concerns are being taken seriously, and who are welcome to participate in their schools’ management – respond by becoming educational partners with teachers and administrators.

Students who attend schools of choice learn more, have higher attendance and graduation rates, and are more likely to go on to college. These benefits come about because the diversity in teaching methods and school management that choice allows closely reflects the diversity of learning styles and interests of students and parents.

Teachers benefit when schools compete for good teachers. Working conditions improve, and even salaries increase. The TSGP would raise annual salaries for teachers in Houston by as much as $12,000. See:

Joseph Bast, Herbert Walberg, and Bruno Behrend, “How Teachers in Texas Would Benefit from Expanding School Choice,” Policy Brief (The Heartland Institute, April 2011).

Because private schools typically spend less than public schools, school choice can also reduce taxes. The Heartland Institute estimates the TSGP would lead parents to transfer about 6% of public school students to private schools, saving the state approximately $1 billion a year. See:

John Merrifield and Joseph Bast, “Budget Impact of the Texas Taxpayers’ Savings Grant Program,” Policy Brief (The Heartland Institute and the E.G. West Institute for Effective Schooling, April 2011).

On June 6, 2011, the Texas Legislative Budget Board (LBB) issued a Fiscal Note claiming TSGP would cost taxpayers approximately $195 million in its first two years. The Heartland Institute immediately challenged that estimate, and on June 20, 2011, LBB issued a new memorandum changing its estimate to a net savings of approximately $1.2 billion over five years. LBB validated The Heartland Institute’s methodology for calculating savings but used an extremely low estimate of the number of students who would enroll, just one-half of one percent of public school enrollment in the first year. Heartland estimates that 6 percent of students will transfer in the first year.


Frequently Asked Questions

The Heartland Institute has prepared answers to six of the most frequently asked questions about the TSGP:

Q1: How Would the TSGP Affect Texas’ Rank?” (Joseph Bast, The Heartland Institute, August 2012)

Q2: Would the number of openings at private schools increase fast enough to meet the expected surge in demand?” (Joseph Bast, The Heartland Institute, August 2012) 

Q3: Would the TSG program hurt public school teachers?” (Joseph Bast, The Heartland Institute, August 2012)

Q4: Would the TSG program take the ‘best kids’ out of public schools?” (Joseph Bast and Marc Oestreich, The Heartland Institute, August 2012)

Q5: What regulations would schools that participate in the TSG program have to comply with?” (Joseph Bast, The Heartland Institute, August 2012)

Q6: Do vouchers threaten [not destroy] private school freedom?” (Dick Komer, Institute for Justice, June 2011)

More questions and answers appear here.

Join the TSG Revolution!

Taxpayer Savings Grants are a win-win for students, teachers, and Texas taxpayers. For more information, visit TaxpayerSavingsGrants.org or contact: 

Allan Parker
Grassroots Coordinator
Texans for Voluntary Taxpayer Savings
Post Office Box 271257
Flower Mound, TX 75027-1257
Email: aparker@txjf.org

…or contact Heartland’s government relations department at 312/377-4000 and jnothdurft@heartland.org.

More information

Kent Grusendorf and Michael Barba, "How Texas Can Take the Lead on School Choice," (Texas Public Policy Foundation, March 27, 2015)

Vance Ginn, Ph.D., "Teachers Win with School Choice," Testimony Before the Texas Senate Education Committee (Texas Public Policy Foundation, March 26, 2015)

Joseph L. Bast, "Making Texas Public Education More Efficient: Taxpayer Savings Grant Program," Policy Brief (Heartland Institute, March 8, 2013)

John Merrifield and Joseph Bast, “Taxpayers Savings Grants: Reply to Fuller,” Policy Brief (Heartland Institute and the E.G. West Institute for Effective Schooling, June 10, 2011)

Joseph L. Bast, “Corrections to Fiscal Note for Taxpayers’ Savings Grants Program,” Policy Brief (Heartland Institute, June 8, 2011)

Joseph L. Bast, "The Indiana School Scholarship Act (House Bill 1003)," Commentary and Anaylsis (Heartland Institute, June 7, 2011)

Joseph L. Bast, "Why Conservatives and Libertarians Should Support School Vouchers," (The Independent Review, October 1, 2002)

* Use Heartland's PolicyBot search engine of more than 25,000 documents of original research and commentary for more information on school reform efforts. Here is a search for "Taxpayer Savings Grants."

News articles at the Heartlander

"Texas Senate Committee Considers School Choice," Kenneth Artz, August 27, 2012.

"Eighty-five Percent of Texas Republicans Approve School Choice Proposition," Joy Pullmann, June 2, 2012.

"School Choice Proposition to Appear on Texas Primary Ballot," Caleb Whitmer, January 17, 2012.

* See archives of The Heartland Institute's monthly public policy newspaer, School Reform News.


Watch Heartland's video explaining the benefits of Taxpayer Savings Grants below: