Going bold in Missouri with Education Savings Accounts

July 19, 2016

(Guest Post by Martin F. Lueken)

Last year, Missouri was one of 18 states that introduced legislation to create an education savings account (ESA) program for families. While it didn’t ultimately become law, it’s stoked the conversation about educational choice in the state and how we can empower families to find schooling options that work for their kids.

Under an ESA program, state officials deposit money into an account for education expenses for children who sign up for the plan. Parents can spend the money on a host of education expenses ranging from books to special needs services, online education, tutoring, SAT and ACT preparation or private school tuition. Parents can also roll over unused funds and use them in the future to pay for college tuition.

Currently, there are five K-12 ESA programs operating in five states – Arizona, Florida, Mississippi, Nevada, and Tennessee.

ESAs are a new and promising innovation with lots of potential because they move beyond just giving parents a say in what school their children attend. ESAs empower parents to tailor an educational experience that they want for their own children.

In essence, it expands on what Nobel Laureate and economist Milton Friedman’s vision of providing parents with freedom to choose the school that best suits their children’s needs. Going a step further, ESAs allow parents to unbundle educational goods and services and choose the ones that best meet their needs. School choice is getting an upgrade.

Critics of ESAs and other school choice efforts like to allege that the programs will “siphon” resources from public schools or harm students in some way. Fortunately, school choice has been around long enough to have produced a large body of research to learn from.

Researcher Greg Forster, for instance, systematically reviewed 100 empirical studies. His findings: school choice affects all of these areas mentioned above in a positive way. Students who choose score higher in reading and math, are more likely to graduate and are more likely to succeed in college. They also are more likely to learn civic values. Moreover, increased competition from school choice makes students remaining in public schools better off. When students choose, schools also tend to become more integrated. And not a single study found that school choice cost taxpayers any money.

Although greater educational freedom for Missouri families would be reason enough for many to adopt a program, some, including taxpayers and legislators, want to know how an ESA program would affect the state’s bottom line – a legitimate concern. A paper I recently co-authored with Mike McShane, Director of Education Policy at the Show-Me Institute, estimated the fiscal impact of a broad-eligibility ESA program on Missouri taxpayers and public school districts. This program would be funded by tax credits for private donations, in which nearly all Missouri K-12 age children (88 percent) would be eligible. We considered a program that is capped at $50 million in its first year, which is a drop in Missouri’s $5.7 billion K-12 education budget’s bucket.

Using a variety of circumstances to make our estimates, we found that state government and local school districts combined would save between $8 million and $58 million per year under an ESA program. The school districts alone would save $21 million to $40 million per year. The state – which is footing the bill by issuing tax credits – could save up to $18 million annually.

What does this mean? For starters, public school districts would have more resources for each student who remains in public school (as well as other tangential benefits such as smaller class sizes and better matches between Missouri students and schools).

Overall, however, Missourians and their children would have little to worry about and a whole lot to gain. The Show-Me State has tried many things to improve their schools, especially in the areas that struggle the most, with little success. It’s time to go bold, and try something that’s already a demonstrated success. It’s time for Missouri to create an education system fit for the future.

Update: rephrased for clarity

Martin F. Lueken is the Director of Fiscal Policy and Analysis at the Friedman Foundation for Educational Choice.

New Report-Turn and Face the Strain

February 4, 2015

Turn and Face the Strain

(Guest Post by Matthew Ladner)

Excel in Ed and the Friedman Foundation have co-released a study on state age demographics authored by yours truly.  The title reflects a couple of different things. First, I dig me some Bowie. Second, people are generally aware of the looming crisis in age demography we face, but they primarily have it framed as a federal issue. With 10,000 baby boomers reaching retirement age every day between now and 2030 (when they all reach retirement age) this certainly does represent a federal issue- trillions of dollars of unfunded liabilities in Social Security and Medicare, etc. The federal issue is not the only issue…

State policymakers must turn and face the strain that changing age demography will have on state government in the form of Medicaid, public pensions, a drag on economic growth and in many states an increasing K-12 population. Spoiler alert but all states have it bad with some states having it far worse than others.

The Baby Boom generation has already started retiring, and will be sending their grandchildren off to school. The United States Census Bureau projects the percentage of working age people to shrink in every state, meaning fewer people in the prime earning (and thus taxpaying) years to support a growing number of seniors and youth.  All states will be getting older, with only a handful of states projected to have a smaller elderly population than 2010 Florida by 2030. Many states also face large projected youth population increases.  With Medicaid currently constituting 23 percent of the average state budget and education approximately half, a fierce battle between the need for health and education spending looms with fewer working age people to foot the bill.

A great many of the working age population of 2030 btw sit in American classrooms right now. According to NAEP around a third of them can read proficiently. While a broad and difficult rethinking of the provision of vital public services will prove necessary including especially subjects such as health, pensions, immigration-the most urgent need is to improve both the effectiveness and cost-effectiveness of the K-12 system.

Most of the K-12 debate ultimately boils down to whether or not to change the status-quo. The status quo however is going to change us whether we like it or not.

More over on the EdFly blog, let me know what you think.

The 123s of the ABCs

February 3, 2015


(Guest post by Greg Forster)

We are now up to an astonishing 51 school choice programs in 24 states plus DC. We are one state short of having private school choice in half the states. Who wants to put us over the top?

Check out all the latest stats on all these programs in the 2015 edition of The ABCs of School Choice, just released from Friedman.

Over One Billion Saved

October 1, 2014

McDonalds billions

Watch out, Ronald. We’re catching up!

(Guest post by Greg Forster)

Matt seems to have been a little distracted by the Ramones yesterday, so for those who are still wondering, the new study from the Friedman Foundation is a comprehensive financial audit of modern school choice programs. It finds that choice has already saved $1.7 billion. As Matt notes, Friedman produces some pretty awesome slideshows that let you absorb tons of information in two minutes. Check it out below and let us know what you think!

The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money? from The Friedman Foundation for Educational Choice

Bedrick: Get Your Charter Law Off Me You Dirty Ape!

July 15, 2014

(Guest Post by Matthew Ladner)

Okay so the title is a bit of an exaggeration but what the heck, there is a new Planet of the Apes movie out and we believe in giving our audience what they pay for around here at the Jayblog. What’s that you say? You guys read this blog for free? Oh yeah, that’s right. We write it just to entertain ourselves, I forgot.

Anyhoo, Cato’s Jason Bedrick raises questions worth debating about the new Friedman Foundation study by Andy Smarick over at Education Next.

Fix Voucher Regulations with This One Weird Trick!

May 30, 2014

Public Rules on Private Schools

(Guest post by Greg Forster)

One of the big controversies surrounding school choice programs is whether they tend to increase government regulation of private schools. Big, sweeping claims have been easy to come by; serious scholarship studying the question, while not nonexistent, has been rare. Today the Friedman Foundation makes a major new contribution by releasing the study “Public Rules on Private Schools.” It is one of the most careful, methodical analyses to date on this question.

The big revelation for me in this study is that government regulations associated with voucher programs (as distinct from other types of school choice programs) is disproportionately made up of paperwork and other compliance requirements. Programs can largely nullify the effects of these regulations by adding some additional funding to cover compliance costs. Some programs do this already. This seems like a no-brainer for legislators to start including in future bill design.

So for the most part the war between voucher and tax-credit scholarship programs seems to me to be blown way out of proportion. Top up the voucher for compliance costs and the differences become unimportant.

Check out this awesome slideshow for tons of information plus author Drew Catt’s spot-on demonstration of what “nerd hipster irony” looks like.

Taste the ABC Rainbow!

January 23, 2014


(Guest post by Greg Forster)

The new edition of the ABCs of School Choice is out – now available in a rainbow of colors, showing that Friedman provides the full spectrum of data on school choice programs.

No red, though? I’m disappointed.