Tag: Florida

The Silver Lining in the Florida School Choice Expansion Loss

Supporters of the Florida Tax-Credit Scholarship (FTS) program are understandably disappointed that the state senate abandoned legislation to expand the program on Thursday. The FTS assists low-income families that want to enroll their children in private schools by offering tax credits to donors of nonprofit scholarship organizations. This year, the state’s only active scholarship organization, Step Up For Students, was able to aid more than 60,000 students but there were not enough funds to aid the more than 30,000 additional applicants. The proposed expansion would have provided enough funds to aid about 6,000 more students. The bill’s withdrawal therefore leaves 6,000 students without the funds they need to attend the school of their choice.

However, the disappointment should be tempered by a large measure of relief. While the legislation contained several praiseworthy changes and eliminated some red tape (including a requirement that would-be scholarship recipients spend a year in a government-run school first), legislative negotiations threatened to add a poison pill that would have severely affected school autonomy and parental choice.

The FTS currently mandates that all participating schools administer a nationally norm-referenced test. Nevertheless, Florida Senate President Don Gaetz insisted that the FTC expansion bill include a provision requiring that scholarship students take the Florida Comprehensive Assessment Test (FCAT), which is soon to be replaced by a Common Core-aligned assessment.

While the existing mandate is unnecessary because private schools are already directly accountable to parents, it still allows schools and parents some measure of flexibility in deciding how best to measure performance. By contrast, the proposed state testing mandate would have forced all schools into a uniform testing regime. Since tests dictate what is taught, when, and how, this mandate would have induced conformity at the expense of diversity and innovation. As explained in the open letter on choice and accountability that the Cato Institute recently issued along with the Heritage Foundation, Friedman Foundation for Educational Choice, and others, such mandates undermine the central purpose of educational choice:

Educational choice has also been repeatedly shown to produce far higher levels of parental satisfaction than does centrally planned schooling. That’s because choice empowers parents to find the best education for their children, and test scores are not their only consideration. Research shows that many parents care more about safety and discipline, graduation and college acceptance rates, and moral values.

Dictating uniform standards and tests threatens those other valued features by redirecting educators’ focus from serving families to catering to bureaucrats. It also contributes to a culture of “teaching to the test” that has already resulted in several large-scale public-school cheating scandals.

Children are not interchangeable widgets that can be beneficially fed through their education on the same conveyor belt. Even within a single family, children often learn different subjects at different speeds. Myriad new options are arising in response to that reality that allow students to learn at their own pace in every subject, helping all to fulfill their individual potential — the very antithesis of uniform government mandates.

Fortunately, the FTS already contains an “escalator” provision that allows it to grow over time, albeit not as quickly as it would have under the expansion bill. Hopefully, Florida legislators will take a second look at some of the important reforms that would have expanded access to the program. Meanwhile, other states that are considering scholarship tax credit legislation should learn from Florida’s experience. Design matters.

WaPo Blogger Wrong About School Choice… Again

Once again, the Washington Post’s education blogger, Valerie Strauss, failed to do her due diligence before posting a hit piece on school choice. A year ago, she falsely claimed that scholarship tax credit programs benefit corporate donors and wealthy recipients. In fact, donors break even at most and the best evidence suggests that low-income families are the primary beneficiaries even in the few programs that are not means-tested. Unfortunately, Strauss has still failed to issue a correction.

Now Strauss has posted an op-ed from an anti-school choice activist in Florida that contains numerous additional errors, which the good folks at RedefinED.org have thoroughly debunked, including the following canard:  

Any way you look at it, private entities receive public tax dollars with no accountability.”

One can certainly debate whether there is sufficient accountability, but there is certainly more than none. All scholarship students take state-approved nationally norm referenced tests such as the Stanford 10 or Terra Nova. The gain scores are reported publicly, both at the state level and for every school with 30 or more tested scholarship students. Additionally, schools with $250,000 or more in scholarship funds must submit independent financial reports to the state.

Not only did the op-ed’s author fail to correctly explain the law, she failed to understand that school choice is accountability. As explained in an open letter that the Cato Institute recently issued along with the Heritage Foundation, Friedman Foundation for Educational Choice, and others: “True accountability comes not from top-down regulations but from parents financially empowered to exit schools that fail to meet their child’s needs.” 

Moreover, the claim that “private entities receive public tax dollars” is also false. The money flows from private donors to private nonprofits to private citizens to spend on their children’s tuition at private schools. That the donors receive a tax credit does not transmogrify their donation into “public” money. Indeed, the U.S. Supreme Court ruled that this view erroneously “assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. Private bank accounts cannot be equated with the … State Treasury.” Likewise, neither tax deductions for donations to a church nor the church’s own property tax exemption mean that churches are therefore funded by “public tax dollars.”

The Washington Post has an in-house fact-checking team. They should not have to rely on RedefinED.org or others to ensure the veracity of what their bloggers post. 

Reality Hits Sunshine State “Accountability”

Former Florida governor Jeb Bush is arguably the leading supporter of both the Common Core national curriculum standards and top-down, standards-and-accountability-based reforms generally. And there is broad evidence that he had success with his overall education program as governor, though that included a sizable—and likely influential—amount of school choice. Given that success, why does the “accountability” piece of his overall program seem to be eroding, with the state school board voting last week to “pad” school grades, for the second year in a row, greatly reducing how many schools are deemed failures? Answering this is crucial to understanding why top-down reforms like Common Core—even if initially offering high standards and strict accountability—almost certainly won’t maintain them.

Once again, we have to visit our ol’ buddies, concentrated benefits and diffuse costs. Put simply, the people with the most at stake in a policy area will have the greatest motivation to be involved in the politics of that area, and in education those are the schooling employees whose very livelihoods come from the system. And being normal people like you or me, what they tend to ideally want is to get compensated as richly as possible while not being held accountable for their performance.

The natural counters to this should be the parents the employees are supposed to serve and the taxpayers footing the bills. But taxpayers have to worry about every part of the state spending pie, and can’t sustain their focus—or motivation—for long on any particular pie slice. Meanwhile, parents are much harder to organize than, say, teachers and administrators, and are only parents of school-aged children for so long. Political advantage: those whom government is supposed to hold accountable.

That said, in Florida it sounds like many parents and taxpayers may be getting fatigued by test-driven school grades, adding onto the power of employee groups. Like we’ve seen in Texas, Florida’s politics may be reflecting a general exhaustion with standards and testing that fails to treat either students, or schools and districts, as unique. In other words, the likely benefits to breaking down such systems are being felt by more parents and “regular” voters, which doesn’t bode well for standards-and-accountability in Florida.

Which brings us to the crucial point about the Common Core. Supporters have a tendency to promise the world with the Core (often neglecting to mention that it provides no accountability itself) largely because they think the standards are very high. But even if they are lofty, and even if they are initially coupled with common tests with high “proficiency” bars—an increasingly big “if”—because of concentrated benefits and diffuse costs the odds of them staying that way are poor. It is a huge problem that Core supporters need to address, even for people who like the idea of “tough” government standards for schools. But sadly, many supporters seem to ignore the problem, choosing instead to tout how supposedly excellent the standards are, and attack as loony opponents who dare to oppose the Core for numerous, very rational reasons.

Unfortunately, it seems a major reason for adopting that tactic is to shield from honest debate a policy that will, by its very nature, impose itself on the entire country. That’s something no one in the country should be happy about.

Parents Want More Education Options

A record number of low-income families participated in Florida’s scholarship tax credit (STC) program this year.

According to the Florida Department of Education’s latest report, the number of scholarship recipients grew by 10,827 students from 40,248 in 2011-12 to 51,075 in 2012-13, an increase of 26.9 percent. More than half of the scholarship recipients are in grade 3 or lower, indicating that the program will continue to grow over time.

Florida’s sole scholarship organization, Step Up for Students, focuses aid on the families that are most in need. Florida’s STC program requires that the families of first-time scholarship-recipients earn less than 185 percent of the federal poverty line ($43,568 for a family of four), but the average scholarship recipient’s family income is only about 106 percent of the federal poverty line ($23,579 for a family of four). 

Scholarship recipients are much more racially diverse than Florida’s general population. Scholarship recipients are 25 percent non-Hispanic white, 33 percent non-Hispanic black and 35 percent Hispanic compared to 78 percent non-Hispanic white, 17 percent non-Hispanic black, and and 23 percent Hispanic in the general population.

According to Jon East, spokesperson for Step Up for Students, there are still more than 10,000 students on the waiting list due to the program cap. This is consistent with the demand for STC programs in other states. For example, just one of Pennsylvania’s roughly 250 scholarship organizations, the Children’s Scholarship Fund Philadelphia, had to turn away 104,500 of 115,000 scholarship applicants over the last decade due to the state’s program cap.

Florida’s STC program is allowed to grow to meet demand over time because the law contains an “escalator” provision that automatically raises the cap whenever the program grows to at least 90 percent of the cap. While STC programs in Arizona and New Hampshire contain similar provisions, most do not. That’s unfortunate, since the caps limit the program’s ability to expand education options to low-income families.

Florida House Committee, Speaker Reject ObamaCare’s Medicaid Expansion

On Monday, a select committee of the Florida House of Representatives rejected ObamaCare’s Medicaid expansion. Shortly thereafter, the speaker of the Florida House announced his opposition:

I am proud of the thoughtful, thorough and deliberative approach that our Select Committee took on the important issues related to Medicaid expansion and health exchanges. I received their recommendations and agree that expanding Medicaid and setting up a state exchange is not in the best interest of our state. We simply cannot count on the federal government to pay 100 percent of the cost for expansion. The facts show that healthcare costs will go up for many Floridians, while access to and quality of healthcare will go down. The ‘all or nothing’ approach that the Obama administration is offering will not work for our state. I know there will be continued discussion about this matter, and I look forward to exploring better policies for our state.

It looks like Medicaid expansion in Florida may not be the foregone conclusion that some people thought.

Yes, Florida Voters Oppose ObamaCare’s Medicaid Expansion

Bloomberg’s Josh Barro criticizes the James Madison Institute’s poll showing that 65 percent of Florida voters oppose implementing ObamaCare’s Medicaid expansion. Barro is mostly wrong. But even when he’s right, he’s still wrong. Disclosure: I helped JMI formulate their poll questions.

Barro complains that JMI conducted a “push poll.” His first complaint is:

It starts by priming respondents with questions about the national debt and the size of Florida’s existing Medicaid budget.

Then it gives an inaccurate description of the terms of the expansion. Poll respondents were told that Medicaid currently covers people earning up to 100 percent of the federal poverty line. That’s not true: In Florida, the limit for adults is 56 percent of FPL, and you must have dependent children to qualify.

Though Barro slightly mischaracterizes the poll question, he is basically correct, and the inaccuracy is my fault.

The folks who originally drafted JMI’s poll questions aren’t health care wonks, so they ran their questions by me. This question was originally worded the way Barro claims the final question was: “Medicaid coverage is currently available for those with incomes up to 100% of the poverty line.” I hurriedly emailed the JMI folks, “Florida does not offer Medicaid coverage to everyone below 100 percent of poverty. See page 2 and table 3 of this report. You might replace ‘currently’ with ‘generally.’” So that’s what JMI did. In retrospect, Barro is right. “Generally” gives the impression that Medicaid is available to more Floridians below the poverty line than is actually the case, and I should have offered a better edit. Mea culpa.

His next complaint is not accurate:

Respondents also heard that after three years, the state would be on the hook for “more than 10 percent” of the cost of newly eligible adults. That’s not true, either: The state’s share would be exactly 10 percent.

Under current law, for the first three years the feds pay for 100 percent of the cost of claims for newly eligible adults. They do not pay 100 percent of the administrative costs of covering those adults. States have to pick up much of that cost (as well as other costs related to other parts of the expansion). So the question is accurate and Barro is wrong. He’s not a health care wonk, though, so he can be forgiven for this one.

But Barro’s third complaint is the real doozy:

Market Structure & Barriers to Entry in Education Tax Credit Programs

I want to thank John Kirtley for his gracious reply to my criticism of his policy guidelines. He has spilled a tremendous amount of blood, sweat, and tears on the ground fighting to establish, protect, and expand the largest private school choice program in the country, and I, quite simply, have not. I think this kind of policy debate is good for the health of the school choice movement, however, so on it goes …

Andrew Coulson posted a response to many of John’s points, but I think some areas deserve an expanded treatment. One of the primary issues in our discussion is centralization vs. diversification of scholarship organizations. I did not claim there was a “mandated” monopoly, which I take to mean government-mandated. Step Up for Students is, however, the only active scholarship organization in the state. It became the sole scholarship organization through hard work and good performance. John mentions Microsoft in his defense of market dominance, but Microsoft never fully monopolized any product or service. There is, however, a literal monopoly of the education tax credit system that was produced and is maintained by problematic provisions in the credit program that create a very high barrier to entry. The structure of the education tax credit in Florida all but ensures a monopoly in the education tax credit program.

For the first six years of the program, scholarship organizations were required to spend 100 percent of the credit funds they raised on scholarships. In other words, they had no money for overhead, which made establishing and running a scholarship organization difficult and expensive … a non-profit would need to seriously cannibalize its established charitable funding, likely already committed, and/or fundraise along two separate tracks for administrative and scholarship funding.

To put this in context, Charity Navigator, which rates non-profits, considers it acceptable for a charity to spend close to one-third of its revenue on non-program expenses. Even the 4-star rated Inner-City Scholarship Fund spends over 13 percent of its revenue on overhead expenses.

Scholarship programs, especially ones with relatively high compliance costs such as requiring detailed checks on a family’s income, require significant but entirely normal overhead spending. Furthermore, local scholarship organizations in a decentralized system act as more than a high-volume processor of financial applications. They act as community organizations that consider the needs and struggles of individual families and children, which requires spending more time and resources on each family. A 10 percent overhead allowance is eminently reasonable, indeed, within the bounds of best practices for such charities. Denying any overhead to non-profits ensured that few charitable organizations would be capable of fundraising and processing scholarships under the law.

Exacerbating this problem, scholarship organizations are not allowed to target the use of scholarship funds they raised to particular kinds of educational environments. What this means is that a non-profit would have to a) cannibalize money raised from other sources and for other purposes, and b) possibly fund educational environments that directly conflict with their conscience, mission, or best judgment. For instance, a Catholic charity would be required to fund an atheist, Wiccan, Protestant fundamentalist, Lutheran, Islamic, or any other school which met the basic requirements of the legislation. Even a non-sectarian scholarship organization is required to issue scholarships to any school, regardless of quality, as long as it meets the basic legal requirements.

In addition, the Florida tax credit applies only to corporate taxes, the vast majority of which are paid by large corporations based outside of the state of Florida. This means that fundraising is relatively difficult and time-consuming, not to mention extremely volatile, as large corporations shift revenue and expenses to minimize their tax burden year to year. It can take two years for a large corporation to begin disbursing funds after first being solicited. And fundraising requires expensive out-of-state traveling.

The corporate-only credit acts as an additional barrier to entry that grows over time and with centralization. Step Up for Students entered this constrained market efficient and well-capitalized, and spent the next decade bringing on the biggest corporate taxpayers in Florida as donors. A new entry into the credit scholarship realm would need to raise very substantial funds for fundraising for years before they saw a return in credit donations. Even should the very high quality of Step Up decline in the future, its relationships with the biggest donors, scale, and general dominance would pose a very formidable wall to climb for any non-profit. Indeed, it is far more likely that the state government would intervene long before any non-profits entered the market to impose the discipline of competition.

With extremely high start-up costs, low return for many non-profit missions, a fully established monopoly, and no profit motive or access to investment funding, the Florida education tax credit scholarship organization opportunities are all but nonexistent under current law.

Pages