Policy Documents

Texas Taxpayers’ Savings Grants: Q&A No. 3 - Effect on Teachers

August 24, 2012

Taxpayer Savings Grant Program
Questions and Answers

by Joseph L. Bast
President, The Heartland Institute
Last Updated: August 2012

Q3: Would the TSGP hurt public school teachers?

Answer in brief:  No. In fact, the Taxpayer Savings Grant Program (TSGP) would benefit teachers at least four ways, starting with increasing their average annual compensation by as much as $12,000. 

The longer answer: The TSGP would force public schools to compete with private schools for good teachers. This would benefit at least four ways: higher wages, better working conditions, more money spent in the classroom and less on bureaucracy, and more opportunities to work with students, parents, and administrators who share a teacher’s educational philosophy.

Background and Analysis

1.  TSGP would force public schools to compete with private schools for students and teachers.

The version of the Taxpayer Savings Grant Program (TSGP) introduced in 2011 as HB33 read,

Any parent or legal guardian of a school-age child who resides in Texas and is entering kindergarten or attended a public school for all of the academic year prior to their participation in this program ... 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....

State average per-pupil maintenance and operations (M&O) expenditure, according to the Legislative Budget Board, was $8,801 in 2011. The savings grant would be a maximum of 60 percent of that amount, or $5,280. 

Based on a review of the academic literature and the experience of two somewhat comparable school choice programs, The Heartland Institute estimates that approximately 350,000 students would use savings grants to enroll in private schools in the second year of the program. This large shift of students from public to private schools would have a large impact on teachers.

2. TSGP would increase teacher compensation.

Under the TSGP, private schools could afford to compete with public schools for teachers, and as a result they would bid up teacher compensation. How much? University of Texas - San Antonio Professor of Education John Merrifield estimates the increase could range from $2,173 to as much as $12,000 in a large urban district such as Houston.

The current organization of public schools allows school districts to adopt personnel policies affecting all of the schools inside the district’s borders. This eliminates most competition among schools for students and for personnel, and weakens the ability of teachers to negotiate for higher pay. Since private schools can’t receive public funding, most of them cannot afford to pay teachers attractive salaries.

Prof. Merrifield tested this hypothesis using data from 118 school districts in 48 counties in Texas. He found that the smaller each district’s share of the teachers within a 25-mile radius, the higher teachers were paid, with all other variables held constant. That difference is the pay increase attributable to competition.

3. TSGP would improve working conditions for teachers.

Schools that compete for students and teachers have strong incentives to create a positive working environment for teachers. Schools that don’t compete can tolerate lax security and unsafe conditions in classrooms and on school grounds. 

A survey of teachers conducted by the U.S. Department of Education revealed that private schools have dramatically better working conditions than public schools. For example, one in five public school teachers reported being physically threatened in the previous year, versus only one in twenty private school teachers. One in eight reported physical conflicts with students every day, while only one in 50 private schools reported such frequent conflicts.

Public school teachers are almost three times as likely as private school teachers to say they will retire as soon as they are eligible (33 percent versus 12 percent). Nearly twice as many public school teachers as private school teachers say they would leave immediately if they could find a higher paying job (20 percent versus 12 percent).

4. TSGP would result in more money spent in the classroom.

Lack of competition leads to waste and inefficiency in every activity or industry, and K-12 education is not an exception. By encouraging schools to compete, TSGP would reward schools that minimize their spending on bureaucracy and overhead and devote more resources to supporting classroom teachers.

Texas spent $47.8 billion on K-12 schools in 2001-2008, but less than half that amount – $23.3 billion – was spent on instruction. The number of nonteaching staff in Texas is nearly the same as the number of teaching staff – 316,392 versus 327,905. This is evidence of too much bureaucracy.

Private schools report spending more of their budgets – about 72 percent according to one study – on classroom instruction than do public schools, which rarely get above 60 percent. For a state the size of Texas, that means billions of dollars more would go to teachers under the TSGP.

5. Better Matching of teachers, students, and parents.

We know that children learn differently, parents look for different things in the schools they want for their children, and teachers have different strengths and weaknesses. So why do we have a school system that assigns children to schools based on where their parents live, rather than which school is best for them? 

Why do we require parents with very different views on what would be best for their children to nevertheless have to send their children to a “one size fits all” school? And why should teachers be assigned to schools based on seniority or labor contracts rather than being encouraged to seek out (or even start) schools that are a “good fit” for their teaching style?

The TSGP would allow parents to choose the schools their children attend, bringing together teachers, students, and parents who want to learn together, rather than being thrown together by an educationally irrelevant variable such as their ZIP codes.

# # #


All of the following sources are available online at www.heartland.org/ideas/taxpayer-savings-grants:

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

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

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

Joseph L. Bast, “Making Texas Public Education More Efficient: Taxpayer Savings Grant Program,” Testimony to the Texas Senate Committee on Education, August 24, 2012.

For more information, contact Joseph Bast, Joy Pullmann, or John Nothdurft, The Heartland Is Institute, at 312/377-4000 or by email at jbast@heartland.org, jpullmann@heartland.org, or jnothdurft@heartland.org.