Chapter 6: Funding Formulas, School Choice, and Inherent Incentives

This chapter reports on funding and financing of school choice across the United States. School choice includes a range of policy reforms, including: the promotion of private schools through vouchers and tuition tax credits; the introduction of charter schools; the liberalization of public school options within and across district boundaries; home-schooling; and deregulation to allow home-schooling options. These options may be contrasted with local public schools where places are allocated primarily based on residency and financing relies heavily on the local tax base. How school choice is financed will influence both its prevalence and its effectiveness in improving education as an alternative to local public schools.