Sweet Victory in the Peach State

February 8, 2016


Image: Tim Keller of the Institute for Justice, right, wields his legal fiddle to defend school choice.

(Guest Post by Jason Bedrick)

Great news from the Peach State, where a superior court judge dismissed a constitutional challenge to Georgia’s scholarship tax credit (STC) law. The Institute for Justice intervened to defend the law on behalf of five tax-credit scholarship recipients. Currently, more than 13,000 Georgia students receive tax-credit scholarships to attend the schools of their choice.

School choice opponents alleged that the STC violated the state constitution’s historically anti-Catholic Blaine Amendment, which prohibits the state from publicly funding religious schools, among other provisions. However, citing precedent from the U.S. Supreme Court and several state supreme courts, Judge Kimberly M. Esmond Adams held that tax-credit eligible donations constitute private funds, not public expenditures:

Courts that have already considered whether a tax credit is an expenditure of public revenue have answered this question in the negative. Of particular importance is Arizona Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436 (2011), where the United States Supreme Court found that taxpayers lacked standing to challenge a scholarship tax credit program under the Establishment Clause of the United States Constitution that was almost identical to the Program at issue here. Like Georgia’s Program, the Arizona program provided that taxpayers could receive a credit for donations made to independent scholarship organizations which then provided scholarships for students to attend private schools. […] Plaintiffs have not presented any arguments for why this Court should not follow this persuasive authority.

The fact that tax-credit eligible donations are private funds is the primary reason that STC laws have a perfect track record in the state courts thus far. It’s also why tax credits are the most liberty-friendly means of financing educational choice, as the late, great Andrew J. Coulson never tired of reminding us (much to Greg’s chagrin). In response to the U.S. Supreme Court’s similar ruling five years ago, Andrew wrote:

The rationale underlying the Court’s ruling highlights a unique advantage that tax credits have over other ways of funding education: they expand both freedom of choice for parents and freedom of conscience for taxpayers.

Plaintiffs had argued that cutting a person’s taxes is equivalent to spending government money, and so taxpayers were being compelled to support religion when credits were used for donations to religious [scholarship organizations]. The Court said, “that is incorrect.”

Unlike the funding of public schools, which is compulsory for all taxpayers, participation in [a] tax credit program is voluntary. If an individual chooses not to donate to [a scholarship organization], his taxes are collected just as they have always been, and those dollars cannot be used for any sectarian purpose. Furthermore, if a taxpayer does choose to make a donation, he is free to select the STO most consistent with his own values. […]

There are other ways of funding universal choice in education, but only tax credits (either for parent’s own education expenses or for donations to [scholarship organizations]) respect the freedom of conscience of taxpayers as well as the freedom of choice of parents. If we truly wish our schools to help build strong, harmonious communities, there is no better way than to adopt such programs at the state level on a grand scale.

The opponents of educational choice are likely to appeal the judge’s decision. Let us hope their appeal meets the same fate as all of its predecessors.

The Choice Genie Continues to Flow out of the Florida Bottle

January 25, 2016

(Guest Post by Matthew Ladner)

RedefinED has published their sixth look at the changing landscape of Florida education, reporting over 88,000 new choice students over the last two years.

Florida choice

The Three Bees release New Study on Tax Credit Funded ESAs

January 21, 2016

(Guest Post by Matthew Ladner)

Jason may have not yet developed the shameless self-promotion bug that afflict the rest of us here at JGPB, so I’ll mention for him that he has a new study out along with Jonathan Butcher and Justice Bolick (ah….I just love the sound of that…) on tax-credit ESAs.

The Three Bs make a strong case on the desirability of converting existing tax credit programs over to multiple uses, and also correctly note possible constitutional advantages under some state constitutions for a tax credit approach. The technology for allowing multiple uses for funds looks to be better and cheaper than one might expect (account management/oversight technology is fairly advanced) which may allow for oversight within the admin fees typically allowed by scholarship tax credit programs.

The Three Bs did not directly address the topic of scale. The mighty Florida tax credit program currently looks likely to reach the practical limits of its ability to scholarship children somewhere below 100,000 out of Florida’s 2,500,000 students. This might change if new taxes can be added to credit, but the mechanics of creating a credit against some taxes seems somewhere on the speculative to work-in-progress spectrum at present.

Thus I enthusiastically support conversion of existing tax credit programs to multiple uses, and under some state constitutions, it might be a very good idea to choose this option over a state funded model. Outside of those circumstances, I’d recommend taking your chances with a state funded model if aiming for more than a pilot project.

This is about justice

January 20, 2016

(Guest Post by Matthew Ladner)

The Rev.Martin Luther King III, a long-time parental choice supporter, addressed a crowd of 10,000 strong at a rally in Tallahassee yesterday.

“I just find it interesting that in our country we have the gall to debate about how our most precious resource — our children — are treated,” he said.

“My dad, I don’t really know if I can actually speak to what he would speak today, but I can say is that he would always  stand up for justice,” he added. “This is about justice.”

Meanwhile the VP of the Florida Education Association, who once referred to children with disabilities and low-income children benefiting from Florida choice programs as “hit dogs” had this to say:

“What are they so afraid of going to the courts to ensure this voucher scheme is legal?” Joanne McCall, the union’s president, asked. “Let’s let the courts decide this once and for all. We’re not dropping our legal challenge.”

Let me get out my Big Chief Tablet and crayons and draw a picture for McCall here really slowly and with bright colors so she can follow along. Why are they so afraid of a judicial assault on their program? That’s easy:

These kids and parents fear losing access to their schools because people like you won’t leave them alone to pursue their dreams.

To Rev. Martin Luther King III this is about justice and the opportunity of children. Joanne McCall says this about adult turf and adult power. If there is a moral difference between redneck governors standing at the school house doors to keep kids out of school with a baseball bat, and union bosses wanting to go into schools to kick kids out of schools with legal baseball bats, the distinction escapes me.

Competition Is Healthy for Public Schools

December 9, 2015

Competition Benefits Public Schools

[Guest Post by Jason Bedrick]

As more North Carolina families are using school vouchers, enrolling their children in charter schools, or homeschooling, some traditional district schools are experiencing slower growth in enrollment than anticipated. The News & Observer reports:

Preliminary numbers for this school year show that charter, private and home schools added more students over the past two years than the Wake school system did. Though the school system has added 3,880 students over the past two years, the growth has been 1,000 students fewer than projected for each of those years.

This growth at alternatives to traditional public schools has accelerated in the past few years since the General Assembly lifted a cap on the number of charter schools and provided vouchers under the Opportunity Scholarship program for families to attend private schools.

Opponents of school choice policies often claim that they harm traditional district schools. Earlier this year, the News & Observer ran an op-ed comparing choice policies to a “Trojan horse” and quoting a union official claiming that “public schools will be less able to provide a quality education than they have in the past” because they’re “going to be losing funds” and “going to be losing a great many of the students who are upper middle-class… [who] receive the most home support.”

Setting aside the benefits to the students who receive vouchers or scholarships (and the fact that North Carolina’s vouchers are limited to low-income students and students with special needs), proponents of school choice argue that the students who remain in their assigned district schools benefit from the increased competition. Monopolies don’t have to be responsive to a captive audience, but when parents have other alternatives, district schools must improve if they want to retain their students. But don’t take their word for it. Here’s what a North Carolina public school administrator had to say about the impact of increased competition:

New Wake County school board Chairman Tom Benton said the district needs to be innovative to remain competitive in recruiting and keeping families in North Carolina’s largest school system. At a time when people like choice, he said Wake must provide options to families.

“In the past, public schools could assign students to wherever they wanted to because parents couldn’t make a choice to leave the public schools,” Benton said. “Now we’re trying to make every school a choice of high quality so that parents don’t want to leave

Wake County is not unique in this regard. As readers of this blog surely know (and as I’ve written elsewhere), there have been 23 empirical studies investigating the impact of school choice laws on the students at district schools. As shown in the chart below, 22 of those studies found that the performance of students at district schools improved after a school choice law was enacted. One study found no statistically significant difference and none found any harm.

Academic Outcomes of Public Schools in Response to Competition

Beating district schools over the head with more and more top-down regulations has done little to improve quality. A better approach is bottom-up: empower parents with alternatives and give district schools the freedom to figure out how to provide a quality education that will persuade parents to choose them.

[A version of this post was originally published at Cato-at-Liberty. Hat tip to Dr. Terry Stoops of the John Locke Foundation for the story from New Wake County. Thanks to Bob Bowdon of Choice Media for the image.]

Ensuring Scholarship Continuity

December 8, 2015

[Guest Post by Jason Bedrick]

In a recent Friedman Foundation blog post I coauthored with Lindsey Burke of the Heritage Foundation and Friedman’s own Robert Enlow, we argued that the government should not prohibit mission-specific (e.g. – Catholic or Montessori) scholarship-granting organizations from participating in tax-credit scholarship programs. We offered both principled and pragmatic reasons for opposing such a policy.

Simply put, private organizations should have the right to set their own institutional mission and donors should be free to choose to support those that align with their values. Moreover, prohibiting mission-specific scholarship organizations could reduce the overall level of scholarship funding because some donors would prefer to support only certain types of education to the exclusion of others. And, as it happens, the largest scholarship-granting organization (SGO) operating in each state with a scholarship tax credit law tends to be the type that grants scholarships to any eligible student to attend any qualifying school.

However, proponents of the universal model offer a strong objection. We all want to ensure that every child has access to the school that best meets his or her needs, but where there is a cap on the total amount of tax credits offered, students might lose their scholarships if the SGO upon which they relied fails to claim the requisite amount of tax credits before other SGOs do. When SGOs in Georgia hit the total tax-credit cap almost immediately after the fundraising period commenced, some SGOs were unable to continue providing scholarships for many of the low-income students that they had been funding previously. Wouldn’t it be better to require that SGOs fund students attending any school of their choice?

I have several responses to this challenge:

  1. The main problem here is that the tax-credit cap is too low. One reason competition in a free market is healthy is that it can expand the size of the economic pie. Unfortunately, tax-credit caps create a zero-sum game. If the cap is not high enough, the growth of one SGO comes at the expense of others. In Georgia and several other states, there is much greater demand for scholarships than there is funding for those scholarships. Raising the cap, therefore, should be the primary goal of school choice groups in Georgia and in other states that might be facing similar issues. But assuming the cap cannot be raised sufficiently…
  2. The market can solve this problem, although it is not guaranteed. A similar issue arose in Arizona when a new and well-funded SGO entered the state, thereby depriving other SGOs of credits upon which they were depending. I am told that the new SGO gave priority to students that had previously received tax-credit scholarships but who were unable to obtain funding that year. That said, there is no guarantee that SGOs will work together like this, and it seems that some low-income students in Georgia lost their scholarships, so perhaps a policy solution is necessary to address such situations.
  3. The universal model doesn’t necessarily solve this problem. In a state with multiple SGOs that all fund students attending any school their family chooses, it would still be possible for one SGO to experience a drop in funding that causes them to grant smaller and/or fewer scholarships. Again, it’s possible the other SGOs would step in and prioritize students who lost their scholarships, but it’s also possible that they would fund students on their waiting lists first, and some students would still lose their scholarships. This is one reason that some groups would prefer to have a single SGO in each state, but the monopoly model is fraught with other dangers, and even there, the lone SGO might see a decrease in fundraising one year, which would mean granting smaller and/or fewer scholarships.
  4. There are other ways to address this problem that don’t entail the government excluding mission-specific SGOs. As noted above, tax-credit caps create a zero-sum game. Fortunately, there are ways to design a scholarship tax credit program to mitigate the problems that tax-credit caps create. One approach would be to “grandfather” credits to existing SGOs for a certain period of time before opening them up to other SGOs to claim. For example, an SGO that raised $500,000 in tax-credit-eligible donations one year would have six months in the following year to raise an equal amount. After that point, any credits their donors did not claim would be open for other SGOs, along with any new credits available if the credit cap increased. The “grandfathering” approach would prevent SGOs from losing funding to competition due to the credit cap, though if the SGO was unable to raise funds for another reason (e.g. – a large donor went out of business, there was a scandal, etc.), it’s still possible that some students could lose their scholarships. (Then again, the same things could happen in a state with the universal model.)

In a perfect world, every child would have access to the education that best meets his or her needs. Sadly, the world we live in is far from that ideal and even the best educational choice policies have not yet attained it. For the foreseeable future, it’s trade-offs as far as the third eye can see.

When attempts to solve problems that arise put two ideals in tension (e.g. – universal access vs. the autonomy of private organizations), education reformers should strive as much as possible to find a solution that preserves both. There is no way to guarantee that no student will ever lose his or her tax-credit scholarship, but I believe the approach I outlined above in Point 4 mitigates that risk as much as possible. It also preserves the autonomy of SGOs while education reformers work toward lifting the tax-credit caps and ensuring universal access to a quality education.

Choose Families, Choose Choice

September 30, 2015


(Guest post by Greg Forster)

The new OCPA Perspective carries my argument that the government monopoly on schools undermines the institution of the family, and school choice would strengthen the family:

Are schools an extension of the family, helping parents raise their children the way the parents want them raised? Or are schools an autonomous branch of the technocratic state, answering not to parents but to professional experts who know how children ought to be raised better than parents do?

The creation of the government school monopoly was one part of a general inversion of the social order going on in the 19th century:

In the 18th and 19th centuries, the family had been understood as the primary unit of society; larger political and economic structures existed to mediate relations between households, not between individuals as such. Relations between individuals within a household—such as the work of childrearing—were the family’s business, except in extreme cases. All that was now gone. The family was no longer primary; the technocratic state was primary.

The failure of the school monopoly has reoped the question of whom schools work for:

School choice and federal centralization of power are both responses to this failure. Some are seeking to reverse course, hoping that the moribund school system can be revitalized by putting parents back in charge. Others are seeking a stronger technocracy that will be more capable of achieving its goals.

I close with the reflection that social conservatives could bring something important to the school choice coalition not currently provided by the two factions that now dominate it, progressives and libertarians. As always, your comments are most welcome!


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