The Privatization Playbook: From Government Contracts to School Vouchers, Taxpayer Money Flows to the Few

For decades, a quiet revolution has been reshaping the landscape of American public services. Under the banner of efficiency and choice, we've witnessed a steady transfer of taxpayer wealth to private corporations by privatizing government functions and the lucrative world of government contracts. A similar strategy is gaining traction in education, with private school voucher programs poised to divert billions of public dollars into private and religious institutions, potentially at the expense of our already strained public schools.

The history of privatization in the United States offers a revealing blueprint. From the Reagan-era sale of Conrail to the more recent outsourcing of military housing and even water systems, the promise has often been the same: private companies can deliver services more effectively and at a lower cost. Yet, the reality has frequently been more complex. While some instances, like the initial stages of the Military Housing Privatization Initiative, showed early promise, others, such as the privatization of water systems in some areas, led to significant rate hikes and service problems, sometimes even requiring public buybacks.

The realm of government contracts paints a similar picture. Massive sums of taxpayer money flow to private companies for everything from defense and security to infrastructure and administrative services. While these partnerships are often deemed necessary, concerns persist about cost-plus contracts, non-competitive bidding, and the potential for conflicts of interest. Are we always getting the best value for our tax dollars, or are these arrangements simply another avenue for wealth to concentrate in the hands of a few powerful corporations?

Now, enter the rapidly expanding world of private school vouchers. Proponents argue that these programs empower parents with choice, foster competition, and provide opportunities for students in struggling public schools. However, a closer look reveals troubling parallels with the historical trends of privatization and government contracting.

Just as privatization diverts public funds to private entities, voucher programs redirect taxpayer dollars intended for public education to private and religious schools. The financial impact on public schools can be significant. When students leave with vouchers, public schools often face reduced funding while still bearing substantial fixed costs, leading to potential cuts in essential programs and services for the vast majority of students who remain.

The experiences of states like Arizona offer stark warnings. Arizona's universal Empowerment Scholarship Account (ESA) program cost a staggering $738 million in fiscal year 2024 and is projected to reach $864 million in fiscal year 2025. Alarmingly, 71.2% of students using vouchers in 2023 were already enrolled in private or homeschool, representing an entirely new cost to the state, averaging $7,500 per student, which can be more expensive than funding students in traditional public schools. This expansion has contributed to a severe budget deficit and cuts in other public services.

Indiana has seen a similar trend, spending approximately $439 million on its voucher program in the 2023-24 school year, a $127 million increase from the previous year. This surge is primarily due to relaxed eligibility requirements, leading to a significant rise in participation from wealthier families. The number of voucher students from households earning over $150,000 yearly soared by 183%, and those earning over $200,000 increased tenfold. Notably, voucher use has grown faster than overall private school enrollment, indicating that many students using vouchers were already in private schools, effectively subsidizing their education with taxpayer money.

In Louisiana, despite research showing significant declines in test scores for students using vouchers, there are proposals for a universal Education Savings Account (ESA) program projected to cost over $520 million annually after full implementation, primarily benefiting families already in private schools.

Ohio took a drastic step by removing the income limit for its EdChoice Expansion voucher program in 2023, making it virtually universal. The cost of Ohio's five voucher programs reached an astounding $966.2 million for the 2023-24 school year, with EdChoice Expansion being the main driver. Shockingly, nearly 70,000 new EdChoice Expansion vouchers were given out in 2023-24, but private school enrollment grew by fewer than 3,700 students. This means most of these new vouchers went to families already sending their children to private schools, providing them with a substantial public subsidy. Consequently, public schools in Ohio are facing reduced funding.

Concerns about accountability and equity also echo the criticisms leveled against privatization and government contracting. Private schools accepting vouchers may not be subject to the same level of transparency and oversight as public schools, raising questions about how taxpayer money is being used and whether all students are being served equitably. Furthermore, private schools often have selective admissions criteria and may not be equipped or legally required to provide the same level of support for students with disabilities as public schools. This raises the specter of a two-tiered education system, where public schools, facing dwindling resources, struggle to meet the needs of all students, while private schools, fueled by public funds, cater to a select few.

The long-term consequences of widespread school voucher adoption could mirror some of the challenges seen in other privatized sectors. Just as healthcare privatization has been linked to reduced access for low-income patients and potential declines in care quality, diverting funds from public education could weaken the system that serves the vast majority of American children. Moreover, public education is vital in fostering social cohesion and civic engagement. A fragmented education system, driven by private interests, could erode these crucial functions, potentially leading to a less equitable and less unified society.

We must learn from the history of privatization and government contracting. While the rhetoric of efficiency and choice can be appealing, we must critically examine who frankly benefits when taxpayer money is channeled into private hands. The growing momentum behind private school vouchers demands careful scrutiny. Are we genuinely expanding opportunities for all students, or are we simply replicating a familiar playbook that ultimately benefits the wealthy and well-connected at the expense of our vital public institutions? The future of public education and the equitable opportunities it provides hangs in the balance.