Proposition 305 Delayed the Modernization of the Arizona Empowerment Scholarship Program

October 30, 2018

(Guest Post by Matthew Ladner)

The Arizona Auditor General has performed an update on their review of the Arizona Department of Education’s administration of the Empowerment Scholarship Account program. Back in 2016, the Auditor General found a number of deficiencies in the Department’s oversight of the program. Two years later, they find…many of the same shortcomings. Given the proximity of a public vote on ESA eligibility and administrative modernization, this is basically like pouring a bucket of chum in shark infested waters. Overreaction is guaranteed, despite the fact that the funds discussed represent less than 1% of the total. The greatest irony here is that the bill that the Save Our Schools group placed on the ballot (thus either delaying or killing depending upon the will of the voters) took robust steps to improve the administration of the program.

ESAs are complex programs to administer, and bless their hearts the Arizona Department of Education volunteered to be the first to try. The Arizona Republic’s story on the Auditor General update includes push-back from the outgoing Superintendent of Public Instruction Diane Douglas on the Auditor General update:

State schools Superintendent, Diane Douglas said the misspending of the voucher money is the result of decisions by the Republican-controlled Legislature to deny her department money needed to properly administer the program. Douglas said lawmakers resist properly funding oversight because they want a private entity to oversee it.

“If you’re not willing to put the resources into the oversight, then it doesn’t happen appropriately,” Douglas told The Arizona Republic on Monday. 

She said her staff has “done a phenomenal job with the lack of resources.”

She criticized the audit for glossing over the Legislature’s failure to properly fund oversight.

That’s a story but not a credible one. From the outset, the Arizona Empowerment Scholarship Program has included fees for management companies as an allowable expense for accounts. While the Arizona Department of Education had no experience in managing multi-vendor accounts, there are in fact multiple private firms which have gone up and down the learning curve of managing (for instance) health savings accounts. Other states with ESA programs have contracted with these firms in order to build digital platforms so that both administrators and parents can view accounts and account transactions in real-time. They’ve also developed methodologies to prevent misspending of account funds from occurring. They do this for a very modest fee. These platforms also collect user reviews to help inform the decisions of other parents- which is the only plausible way to hold, for instance, an occupational therapist or online education provider accountable for performance.

What was requested of the department repeatedly and I know this because I myself personally all but begged them to do this on multiple occasions- was to have them hire one of these firms so as to radically improve the administration of the program. The parents would have received superior program that was easier to use, misuse of funds could be dramatically curtailed, and transparency improved. Everyone wins, and you can see this underway in Florida, where the main Gardiner Scholarship administrator (Step Up for Students) has contracted with SAP Ariba to create such a platform.

I interpreted the feedback I received as “Nah man- hold my beer! We’ve GOT THIS!” No wait I think what I was actually told was “the Superintendent is suspicious of outside vendors” which translated in practice to approximately the same outcome. In any case since then the Department’s administration of the program has looked something like:

Notice that this is not a bureaucratic turf issue. The avenue allowed left the Department of Education in charge of the program. Any outside vendor would have reported directly to them, and they could tell them what to do and hire/fire them at will within the normal confines of state contracting. The great advantage here is that these firms have decades of experience in navigating these waters and there are multiple players in the space that could compete if the state created an RFP.

The complaint about under funding of administration also rings hollow because as previous reporting from the Republic established the Department failed to spend the resources allocated for program administration by leaving funded FTE spots open. If you don’t spend the funds appropriated for you, then you don’t get to complain that you needed more funds. And by the way, the private firms with plentiful experience in managing account based program could have been funded for a very modest fee by the account holders, and would have not needed to subtract from the funds the department didn’t in any case fully spend.

Oh but it gets better.

Arizona SB 1431 from the 2017 session included a large number of items to improve the administration of the program and to increase transparency. You can read a list of these items here. In evident despair of the Department modernizing the program administration, the legislature (wisely imo) included these provisions:

Directs ADE to post on its website information and data that are updated monthly regarding ESAs that includes the following:

a)info on all purchases and expenditures made with ESA monies that does not violate the personal privacy of any student or family and that includes only aggregate date;

b)the number of enrolled students disaggregated by eligibility; and

c)any other information or data that may be pertinent to promoting transparency and accountability of the ESA program.

and…

Requires, rather than allows, the Treasurer to contract with private financial management firms to manage ESAs and directs ADE to cooperate with the Treasurer and the contracted firm.

The collection of signatures against SB 1431 by the Save Our Schools group at minimum delayed the modernization of the program in the form of Prop. 305. If the yes vote prevails, SB 1431 will take effect, whereas if no prevails it’s back to the drawing board. The polls on this provision have been mixed, and at the time of this writing it seems the proposition could go either way. Regardless of what happens at the ballot, it remains abundantly clear that program administration must be modernized.

Just as a reminder, this is the same Arizona Department of Education which mis-allocated $85,000,000 in federal title I and IDEA funds, giving some schools too much while short-changing other schools. The “blame the legislature” trick also doesn’t work here as the positions that allocate funding are funded by Uncle Sam (like every other state) but one doesn’t read stories about Montana, Oregon or (fill in the blank here) managing to make a mess of these sorts of things.

Note that the response to this has never been nor should it be “If the Department can’t administer Title I we should just get rid of it!!!!” but I’m fairly confident that I could go on to twitter right now to find this argument being made with hypocritical gusto. In fact I fear I could find this double standard being applied by the very people who delayed the modernization of the program. It’s a neat trick to prevent the implementation of solutions while continuing to complain about the problems. Let’s see what happens next.

 

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Tuthill on the Shape of Things to Come in the K-12 debate

November 7, 2014

(Guest Post by Matthew Ladner)

Generals are always fighting the last war, and in this must read piece by Doug Tuthill over at RedefinED, Tuthill makes the case that many of our current K-12 debates are already sliding towards irrelevance in an emerging multi-provider K-12 landscape.


Florida School Boards Association Prepares to File Suit Against Tax Credit

August 27, 2014

Florida census

(Guest Post by Matthew Ladner)

Despite the wishes of the parents of 69,000 low-income children, despite the fact that Florida districts improved outcomes substantially during an era of increasing parental options, despite positive third-party academic evaluations of the tax credit program, and despite Census Bureau projections that show that Florida’s district schools will likely face a severe overcrowding problem, the word is out that the Florida School Boards Association is set to file suit against Florida’s tax credit program.  As you can see from the post below, Florida is one of the lower-income states. As you can see from the chart above, both the youth and elderly populations of Florida are set to substantially grow over the next decade and a half.  Elderly people already consume a majority of Medicaid funding, and when your population of 65+ projects to grow from 3.4m to 7.8m you’ve got a huge problem on your hands.

The tax credit program will not begin to solve this problem by itself, but nothing will.  Florida is going to need a series of policy innovations to improve state outcomes while lowering costs to get through this.  Innovations with results **ahem** like the tax credit program.  The average scholarship amount is about half of the public school spending rate. Better still, the third-party academic evaluations by Northwestern economist David Figlio found academic gains for both participating students and for public schools facing higher levels of competition.

If the Florida School Boards Association has a plan to deal with the age demographic storm on the horizon, which includes a projected million plus increase in the size of the K-12 population while the state ages, I would like to know what it is.  Stamp out successful reforms and then cover the playgrounds with trailers and hope for the best?  School districts are always going to be the backbone of the education system in Florida. Funding for education is guaranteed by the Florida Constitution and supported by the public.

Nevertheless, Florida urgently and badly needs improvement and innovation in the public sector, especially in K-12.  This lawsuit represents a step in the wrong direction and more worrying still speaks to a complete lack of either awareness or seriousness about the challenges facing Florida’s future.


Florida Tax Credit Analysis find Participant Gains

August 31, 2011

(Guest Post by Matthew Ladner)

A careful analysis of test score gains by David Figlio of Northwestern University has found a modest but statistically significant gains for Florida tax credit students. The data in this study are messy, and Dr. Figlio admirably goes about sorting through the various issues in an even-handed fashion.

Figlio employs a regression discontinuity design to analyze the data, and his finding of a small but statistically significant academic gain fits quite comfortably with the larger random assignment literature, which find small year to year gains which accumulate over time.

One of the under-appreciated features of the random assignment literature: the studies usually fall apart after three or four years due to attrition in the control group. Our window into the academic benefits of choice is therefore limited. Figlio’s employment of a different analytical technique provides confirms previous findings, and may (?) open the door to longer term assessment. The challenges with the data described in this paper, however, suggest that it may not be easy.

Money quote from the study, with a definite echo of previous random assignment studies:

These differences, while not large in magnitude, are larger and more statistically significant than in the past year’s results, suggesting that successive cohorts of participating students may be gaining ground over time.

Good discussion of the results over at RedefinED, including a discussion of the baseline results (tax credit students are poorer and less Anglo). Emerson also puts this study in the context (Figlio also found positive public school effects associated with the Step Up for Students program).

So, the Step Up for Students program has now been found to help improve public school results, help improve participant academic gains, generates high levels of parental satisfaction. Sounds like a rock solid justification for expansion to me.

 


New Study Links Tax Credit to Florida Public School Gains

June 3, 2010

(Guest Post by Matthew Ladner)

A new study by David Figlio links higher gains among Florida public schools with higher levels of competition from the Step Up for Students tax credit program. You can read the St. Pete Times story by Ron Matus here.  Matus wrote:

Figlio emphasized the boost was significant, but modest.

“Anybody looking for a silver bullet has to keep looking,” he said. “What we find is certainly positive and statistically strong, but it’s not like public schools are revolutionizing overnight because of this, either.”

So it turns out that the public school gains associated with a state program with an initial statewide cap of $50m in a state with a multi-billion dollar public school budget were statistically significant but modest. Would it be reasonable to expect anything more from such a modest program? I suggest we scale this public school improvement program up to say a cool billion per year and then measure the impact.

My favorite line in the story comes from a hostile academic:

Another researcher remained skeptical. Stanford labor economist Martin Carnoy, who has studied the impact of vouchers and reviewed the latest study, said Figlio and Hart did “an honest job with the data.”

But here is the real story: even after several years the effect size is TINY,” he wrote in an e-mail. “They are so small that even small downside effects would nullify them, leaving vouchers as mainly an ideological exercise.”

This is one of the more unintentionally hilarious statements I have read in some time. The field of education reform battle is covered with the dead bodies of reforms that show nothing in the way of a statistically significant impact. Increasing per pupil funding, Head Start, teacher certification, almost everything studied by the “What Works” clearinghouse so far, etc. All of these failures cost a great deal of money and deliver nothing in the way of sustained academic gains.

So the state of Florida passes a small law that actually saves the state money and shows a statistically significant and small result of improving public schools, and we are supposed to wring our hands and despair because something bad could come along and nullify the gains? Ummmmm, no.

First of all, nothing bad did come along and nullify the gains- quite the opposite. This program was only a part of the strategy to increase parental choice in Florida. That strategy also includes charter schools, McKay vouchers and virtual schooling- all of which either already are or soon will be much larger programs than Step Up for Students.

Second, the parental choice strategy was itself a part of a larger effort to improve Florida public schools. Parental choice reinforced the central K-12 reform of grading schools A-F. Transparency, rewards for success, consequences for failure formed the core of the Florida strategy.

Did it work?

The Step Up for Students program played a contributing role in Florida’s symphony of success rather than “destroying public education.”  This is what Milton Friedman argued all along. Bravo- the obvious conclusion to draw is to push both parental choice and public school reform still further in Florida and elsewhere.


Florida School Choice Rally

April 8, 2010

(Guest Post by Matthew Ladner)

Another video of the largest parental choice rally in history. A final vote on the Step Up for Students expansion is expected today:

UPDATE The Florida House has passed the tax credit expansion with a strong bipartisan majority, gaining  the support of 20 of the 43 House Democrats present, including the support of the ranking Democrat on the Education Policy Council. It also was supported by 11 of 18 Black Caucus members voting.


Newscast from the Florida Rally

March 25, 2010

(Guest Post by Matthew Ladner)