Claiming Defeat on the Brink of School Choice Victory in PA

The WSJ recently published an opinion piece passing judgment on a long and still-active battle over school choice in Pennsylvania.

Unfortunately, I think it misses the most important part of the ongoing saga; Pennsylvania is on the cusp of a massive school choice victory. A huge expansion of the education tax credit program looks feasible, and it would make the Keystone state the leader in school choice with $400 million helping over one hundred thousand poor kids get a good education.

But first, since this, sadly, seems necessary; I am not in fear of “the fury of teachers unions.” And I am not beholden to their special interests. Don’t take my word for it. Just look through what I’ve written, and then run it by a union flak for comment. Dollars to doughnuts the response is decidedly negative.

And yet, I, a fully credentialed non-teachers-union-hack, think the Pennsylvania voucher proposal is a very bad idea. Why?

First, Pennsylvania already has one of the largest, most successful education tax credit programs in the country. It serves more children than any other program, tapping more funds than all but one other program (in Florida, also a tax credit). A huge expansion of the program already passed the House with just 4 percent of legislators opposed.

Critics claim that the proposed credit expansion would help kids “far less than vouchers would.” The opposite is true. The Senate voucher plan is estimated to cost just short of $100 million in the fourth year (covering just kids in failing school districts) and it would expand the education tax credit program to $125 million (up from $75 million). The new House credit plan would add a new fund of $200 million for kids in failing schools and increase the existing credit fund to $200 million.

In other words, the voucher plan envisions $100 million for only low-income kids in failing schools. The new credit program doubles the funds for those same kids, and increases the existing credit program that serves all low-income kids, regardless of their school district, by an additional $75 million over the Senate voucher bill. Senate bill = $225 million for choice, House bill = $400 million for choice. And this would put Pennsylvania ahead of Florida’s $229 million program for next year.

Critics of credits claim that since the average scholarship is just $1,000 per child, it isn’t helping poor kids enough. But this misses entirely the fact that education tax credit funds are just part of the scholarships needy kids receive; schools backfill what’s needed with regular charitable donations. Scholarship organizations and schools are able to work together to ensure that every family gets just what they need to go to the school of their choice, but no more; they use the funds efficiently to help even more families. A voucher program, run by the government, cannot respond flexibly to the diverse needs of individual families, and will therefore waste funds and serve fewer children.

Furthermore, it is likely that this average scholarship size is artificially low, an artifact of a bug in the way education tax credits are currently processed. After two years of donating to the program, a taxpayer is thrown back into a first-come-first serve poll of applicants. Since there is a cap on the popular program, a good number of existing donors will be kicked out of the program each year when the cap is reached. And the schools they were donating to will have to make up a big hole in their budget.

In other words, donors, Scholarship Organizations and schools have no guarantee that a credit donation will come through and therefore face a lot of unnecessary uncertainty in budgeting. So they do the logical thing, which is to spread the money out over more students and rely on charitable funds as the stable base for the full scholarship. If the government processes some donors out, then they have less to try to scrape up per student and less per family to help make up spread over a larger number of families. The low scholarship amount is in part a response to the uncertainty caused by a bug in how the credit donations are process, a problem that can be easily fixed and should be fixed in any new legislation.

Critics also note that credits are subject to budget cuts, and indeed the program was caught in a frenzy to roll back tax benefits in Pennsylvania. But legislators quickly heard from the more than 200 Scholarship Organizations and the thousands of families, taxpayers, and schools who know the value of the program, and the funds were replaced and discussions about expansion resumed.

The fact is, any program can be cut or expanded; credits, vouchers or even, exceedingly rarely, government education. A program is protected to the extent that it has defenders. Because the credit program is entirely private and voluntary, it invests taxpayers and community organizations directly in the program and provides a structure of and motivation for support that voucher checks sent from the government simply cannot replicate.

And this is all before we even consider the fact that vouchers are likely unconstitutional under Pennsylvania’s state constitution, which contains one of the most explicit and restrictive clauses on state funds and religious education in the nation.

Finally, the article looks to Louisiana and Indiana as models for Pennsylvania, but those states would have done much better by modeling their choice efforts after Pennsylvania.

In Louisiana, the voucher program is under siege for a perceived lack of accountability and vetting of schools, and in Indiana, the program is capped at 15,000 students, or less than half of the number of kids currently served by Pennsylvania’s credit program. Both of these programs make nominally private schools “accountable” to the government that got us into our educational quagmire, whereas education tax credit programs keep schools independent while making them accountable directly to taxpayers and families.

The best thing Pennsylvania’s leaders can do is forget about an inferior and unattainable voucher program and make the state’s education tax credit the largest school choice program in the country.