A second charge made by opponents of expanded school choice is that it will somehow de-fund the public school system, resulting in its financial bankruptcy or an inability to pay for essential programs. Of course, it is true that choice will allow dollars to follow students. In nearly all states participating in inter-district choice programs, the funding follows each student from the original school district in which he or she resides to the chosen school and its district. This, necessarily, results in a reduction of the overall grant to the original school district, and an increase in the resources to the school receiving new students. For example, due to the opening of two large charter schools in the mid-Michigan area in the 1996-97 school year, the Lansing School District experienced a "loss" of just under four million dollars in state aid when approximately 700 students left the district.25 Of course, these new charter and other public schools "gained" the same amount of money as was "lost" by this school district. Thus, the government education system as a whole did not lose money, and parents and their children gained an increase in options.

When choice is extended to private schools, even more resources are deployed for education. Dollars follow the students, although in a more indirect manner. Other dollars, from private sources, also flow in. Thus, even when choice options include private schools, the overall resources devoted to education need not decrease.26

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