Tag: Nevada

The Year of Educational Choice: Update II

Educational choice is on the march.

As I noted back in February, the stars appeared to be aligned for a “Year of Educational Choice.” By late April, state legislatures were halfway toward beating the record of 13 states adopting new or expanded school choice laws in 2011, which the Wall Street Journal dubbed the “Year of School Choice.” The major difference in the types of legislative proposals under consideration this year is that more than a dozen states considered education savings account (ESA) laws that allow parents to purchase a wide variety of educational products and services and save for future education expenses, including college.

On Monday, Tennessee Gov. Bill Haslam signed the Individualized Education Act, an ESA program for students with special needs. Earlier this year, Mississippi enacted the nation’s third ESA law, behind Arizona and Florida. Lawmakers in Montana also passed an ESA, but Gov. Steve Bullock vetoed it earlier this month.

Nevertheless, Gov. Bullock allowed a universal tax-credit scholarship bill to become law without his signature. The law is an important step toward educational freedom, albeit a very modest one. Taxpayers can only receive tax credits for donations to scholarship organizations up to $150, meaning that a single $4,500 scholarship will require 30 donors. No other state has such a restrictive per-donor credit cap. Unless the legislature raises or eliminates the cap, Montana’s tax-credit scholarship program is likely to help very few students.

When Overcrowding Happens in Vegas

What happens when the population of K-12 students grows faster than the government is able to build school buildings? Las Vegas is finding out the hard way:

Las Vegas is back, baby. After getting slammed by the Great Recession, the city today is seeing rising home sales, solid job growth and a record number of visitors in 2014.

But the economic rebound has exacerbated the city’s severe school overcrowding and left school administrators, lawmakers and parents scrambling.

This elementary school was built to serve a maximum of 780 students. Today it serves 1,230 — and enrollment is growing.

Forbuss Elementary is hardly alone. The crowding is so bad here in the Clark County School District that 24 schools will soon run on year-round schedules.

Forbuss already is. One of five sections is always on break to make room. Scores of other schools are on staggered schedules. More than 21,000 Clark County students are taking some online classes, in large part because of space strains. Nearly 700 kids in the district take all of their classes online.

“It’s pretty rough some days. I’m in a small portable with 33 students,” says Sarah Sunnasy. She teaches fifth grade at Bertha Ronzone Elementary School, a high-poverty school that is nearly 90 percent over capacity. “We tend to run into each other a lot. Trying to meet individual needs when you have that many kids with such a wide range of ability levels is hard. We do the best we can with what we have,” she says.

At Forbuss Elementary there are 16 trailer classrooms — the school prefers the term “portables” — parked in the outdoor recess area, eating away at playground space.

There’s also a “portable” bathroom and portable lunchroom. “It’s warmer in the big school,” a little girl tells me. “These get cold in winter.”

“You have to make do,” says Principal Shawn Paquette. “You get creative.”

“Our school is so overcrowded, that, you know, everybody’s gotta pitch in,” says school support staffer Ruby Crabtree. “We don’t have enough people.”

The Nevada legislature recently approved funding to build new schools and renovate old ones, but as NPR notes, the “handful of new schools won’t be finished for at least two years.” In that time, the Las Vegas school district is expected to experience 1 percent enrollment growth, or about 3,000 to 4,000 students, so the district will need “at least two more elementary schools every year.”

E-Verify in the States

Many state legislatures are proposing to expand E-Verify – a federal government-run electronic system that allows or forces employers to check the identity of new hires against a government database.  In a perfect world, E-Verify tells employers whether the new employee can legally be hired.  In our world, E-Verify is a notoriously error-prone and unreliable system.

E-Verify mandates vary considerably across states.  Currently, Alabama, Arizona, Mississippi and South Carolina have across the board mandates for all employers.  The state governments of Georgia, Utah, and North Carolina force all businesses with at least 10, 15, and 25 employees, respectively, to use E-Verify.  Florida, Indiana, Missouri, Nebraska, Oklahoma, Pennsylvania and Texas mandate-Verify for public employees and state contractors, while Idaho and Virginia mandate E-Verify for public employees. The remaining states either have no state-wide mandates or, in the case of California, limit how E-Verify can be used by employers.

Despite E-Verify’s wide use in the states and problems, some state legislatures are considering forcing it on every employer within their respective states. 

In late April, the North Carolina’s House of Representatives passed a bill (HB 318) 80-39 to lower the threshold for mandated E-Verify to businesses with five or more employees.  HB 318 is now moving on to the North Carolina Senate where it could pass.  Nevada’s AB 172 originally included an E-Verify mandate that the bill’s author removed during the amendment process. Nebraska’s LB611 would have mandated E-Verify for all employers in the state.  LB611 has since stalled since a hostile hearing over in February.

E-Verify imposes a large economic cost on American workers and employers, does little to halt unlawful immigration because it fails to turn off the “jobs magnet,” and is an expansionary threat to American liberties.  Those harms are great while the benefits are uncertain – at best.  At a minimum, state legislatures should thoroughly examine the costs and supposed benefits of E-Verify before expanding or enacting mandates.

Scott Platton helped to write this blog post.

The Year of Educational Choice: An Update

Back in February, I speculated that 2015 might be the “Year of Educational Choice” in the same way that the Wall Street Journal declared 2011 the “Year of School Choice” after 13 states enacted new or expanded school choice laws.

This year, in addition to a slew of more traditional school choice proposals, about a dozen legislatures considered new or expanded education savings accounts (ESAs). As I explained previously:

ESAs represent a move from school choice to educational choice because families can use ESA funds to pay for a lot more than just private school tuition. Parents can use the ESA funds for tutors, textbooks, homeschool curricula, online classes, educational therapy, and more. They can also save unused funds for future educational expenses, including college.

Currently, two states have ESA laws: Arizona and Florida. Both states redirect 90% of the funds that they would have spent on a student at her assigned district school into her education savings account. The major difference between the two laws is that Arizona’s ESA is managed by the Arizona Department of Education while Florida’s is privately managed by Step Up For Students and AAA Scholarships, the nonprofit scholarship organizations that also issue scholarships through the Sunshine State’s tax credit law.

Both Arizona and Florida expanded their ESA programs this year. Earlier this month, Arizona expanded eligibility for the ESA to students living on Native American reservations. And just today, the Florida House of Representatives voted unanimously to expand its ESA. Travis Pillow of the RedefinED Online blog explains:

Victories for Educational Choice in the Southwest

It’s looking more and more like the Year of Educational Choice each week.

Yesterday, Arizona Governor Doug Ducey signed a bill expanding eligibility for the state’s pioneering education savings account (ESA) law to all students living on Native American tribal lands. The ESAs were originally limited to students with special needs, but the state subsquently expanded eligibility to include students in adoptive care, students with an active-duty military parent, siblings of an ESA recipient, and students zoned to a district school rated D or F.

On the same day, Nevada became the third state this year to adopt a new educational choice law in both legislative chambers, behind Mississippi and Arkansas. In addition, the Montana Senate recently voted to create a new scholarship tax credit (STC) law, and Alabama Senate voted last week to expand the state’s existing STC law.

Nevada’s Assembly Bill 165 creates a STC law. Corporate donors will be able to receive tax credits for contributions to nonprofit scholarship organizations that aid low- and middle-income students attend the school of their family’s choice. The scholarships can be worth up to $7,755 in the first year, which is significantly less than the average $9,650 cost per pupil in Nevada’s district schools.

What if We Ran a Public School System… and No-One Came?

The New Jersey Office of Legislative Services, which estimates the budgetary impact of proposed laws, has just released its analysis of a private school choice bill called the “Opportunity Scholarship Act.” The most remarkable thing about its report is the amount of money it assumes that districts would save for each student they no longer have to teach: $0.

On that assumption, if every student were to leave for the private sector tomorrow, districts would keep right on spending exactly the same amount they spend today. Inefficient though it is, not even state-run monopoly schooling is that bad.

The OLS report does not explain why it assumes that the per pupil savings for students leaving public schools (the “marginal cost”) would be $0. It states that this figure is “indeterminate,” but by not counting it at all is effectively treating it as zero.

In fact, the marginal cost of public schooling is not “indeterminate” at all. Economists “determine” it all the time, and it’s quite easy to do. You simply observe how district spending actually rises and falls with enrollment, using a time-series regression, as I did in 2009 to calculate the marginal cost of public schooling in Nevada (see Appendix A).

Even if the NJ OLS does not conduct a marginal cost estimate specific to New Jersey, they could have done–and should still do–the next best thing: take the marginal cost estimates for other states as a rough guide and estimate the NJ district savings from them. I estimated that Nevada district spending falls by 85% of average per-pupil spending when a student leaves, and Grecu and Lindsay, a couple of years earlier, estimated the figure at 80% for South Carolina.

If they want to be conservative, the NJ OLS could use the lower of these figures, and perhaps also run the numbers for estimates 10% higher and 10% lower.

Any of the above options is preferable to the logical impossibility of their current analysis, which effectively treats the marginal cost of public schooling as $0.

Senator Reid’s Gamble

My colleague Dan Mitchell has already written about the tax deal reached between President Obama and congressional Republicans.  But there might be something in the package for people wishing to play poker freely online.

Sen. Harry Reid (D., Nev.) is apparently circulating draft legislation to overturn the Unlawful Internet Gambling Enforcement Act of 2006, which blocked financial institutions from processing transactions with online gambling companies.  I would characterize that as a good move overall, apart from three quibbles. First, the draft legislation would – you guessed it –place a tax on the wagers (you didn’t think you’d get your freedom back without conditions, did you?). Second, the bill applies only to poker, and continues to prohibit “Internet gambling” more broadly. And third, the fine-print sounds problematic from a trade policy (and trade law) point of view:

…Mr. Reid’s office is considering language that would allow only existing casinos, horse tracks and slot-machine makers to operate online poker websites for the first two years after the bill passes, which could limit the ability of other companies to enter the market.

Carving out this fast-growing market for established gambling service providers sets off my protectionist alert. The cosy little cartel wouldn’t just exclude domestic potential competitors; I wrote a short paper a few years ago on how the UIGEA got the United States into hot water with the World Trade Organization, and the same arguments apply today. The United States still – despite vague, and so far empty, talk about changing its commitments with WTO members – has an obligation under the General Agreement on Trade in Services to open its market to online gaming operators abroad.

Politico has more about the groups supporting this move, suggesting (as are many Republicans opposed to internet gambling) that Reid has seen religion on online poker in direct response to the campaign contributions he received from gambling interests. I’m not so much interested in that angle –politicians responding to special interests is hardly news – as I am in the substance of what the legislation is proposing. And if the following reporting from Politico is accurate, the substance is troubling enough :

The National Indian Gaming Association is opposing Reid’s effort to insert the online poker language in any tax cut bill, said an official with the group, Jason Giles. He asserted it gives an advantage to Las Vegas-based gambling operators while discriminating against tribal operators.

“It is drafted to create an initial regulatory monopoly for Nevada and New Jersey for the first several years of the bill, which gives Las Vegas operators time to capture the market,” he said.

A gambling industry insider familiar with Reid’s efforts said Republican-leaning Vegas casino moguls Steve Wynn and Sheldon Adelson, while generally supportive of Reid’s legislation, take issue with provisions that could allow companies that previously operated in violation of online gambling laws to cash in.

The UIGEA is/was a nightmare for online operators to work around, partly because it never really defined “unlawful internet gambling.” Therefore, I am not sure how one would determine unambiguously whether a company “operated in violation of online gambling laws”.  The UIGEA referred to transactions processors rather than gambling companies. And in any case, a few European operators (PartyGaming most famously) withdrew from the U.S. market at the time the UIGEA passed, just to be safe, and yet have continued to face prosecution.  The European firms are at the cutting edge of online gaming services. Of course Messrs. Wynn and Adelson would want them out of the picture, but legislators should resist their attempts.

While Reid’s proposal may be an improvement on the status quo, it falls far short of restoring the full freedom of consenting adults to use their money, time, and online access in a manner of their choosing. It also is a long way from allowing a competitive, open market in gaming services to thrive. We should see this as a step in the right direction, but not the end game.