Tag: private schooling

Dear Journalists, Donations Are Not ‘State Money’

Oklahoma has just joined the ranks of a half-dozen other states by enacting a K-12 education tax credit program. Under the new program, individuals or businesses that donate to non-profit School Tuition Organizations receive a tax cut worth 50 percent of the donation. STOs then use the funds to help low income families afford private schooling.

Journalists for the Associated Press and countless other media outlets routinely refer to donations made under education tax credit programs as “state money.” According to the United States Supreme Court’s recent ACSTO v. Winn decision, “that is incorrect.” This is a matter of settled law. To call these private donations “state money” is to misrepresent the facts and mislead readers.

It would be bad enough if the journalists and wire services misrepresenting these programs were simply unaware that they were distorting the facts, but in at least some cases they continue to do so even after having been apprized of their error. Brandon Dutcher, vice president for policy at the Oklahoma Council of Public Affairs, wrote to the AP last week to correct their earlier erroneous coverage. He received no reply and the errors continue.

I never cease to be amazed by this kind of behavior from an industry that is clinging for its life. The purpose of journalism is to apprize customers of the facts. Demonstrating indifference to the facts cannot be good for business.

New Jersey Canceled for Lack of Funds

New Jersey is broke. In an effort to get the state back on its financial feet, governor Chris Christie has made across-the-board cuts–including cuts to public school spending. This week, a judge ruled that his school cuts are unconstitutional, in light of state supreme court precedents dating back decades.

Basically, New Jersey’s highest court has ruled that the state must spend a fantastically large sum of money in order to meet its constitutional requirement of providing a “thorough and efficient” school system.

Slight problem: by definition, a system that spends outrageous sums of money for outcomes that are merely “thorough” cannot also be “efficient.” The courts seem to have resolved this logical contradiction by ignoring the word efficient. So now they just demand that the state spend more money on public schools, while acknowledging how futile that is. In Judge Doyne’s words:

Despite spending levels that meet or exceed virtually every state in the country, and that saw a significant increase… from 2000 to 2008, our “at-risk” children are now moving further from proficiency.

Spending more on public schools will do one thing for the state, though: bankrupt it. Unless something changes soon, we could well see the Detroitification of New Jersey: an exodus of residents fleeing failed government services and rising taxes, creating a death spiral as the shrinking tax base exacerbates the fiscal problems and perpetuates the exodus.

The only way that I can see for New Jersey to survive the court-mandated burden of its public school systems is to provide families and taxpayers with an alternative to them.

The state legislature is currently considering a k-12 school choice program that would subsidize private school tuition for poor kids by giving businesses a tax break if they donate to non-profit scholarship organizations. Florida has a program like this and it saves taxpayers $1.49 for every dollar it reduces tax revenues. That’s because monopoly public schooling is so much less efficient (there’s that word again) than parent-chosen private schooling.

If the state doesn’t enact this program–and make it large enough to make a difference… fogettaboutit

Vouchers, Tax Credits, and Social Conflict

Yesterday, I contended that education tax credits substantially avoid the compulsion inherent in school voucher programs – that vouchers compel all taxpayers to fund every kind of schooling (including ones they may strongly object to) whereas tax credits do not.

In his most recent response, NRO’s Robert VerBruggen disagrees. He writes

I don’t see how [tax credits do] anything whatsoever to change this, at least mathematically speaking. Whenever someone earmarks their tax dollars for a certain purpose — in this case, by “donating” to a voucher program and being reimbursed with a tax credit — the government has to devote a higher share of everyone else’s tax dollars to the rest of the budget. Non-”donating” taxpayers, therefore, subsidize the voucher program to the exact same degree they would have if the government funded it directly.

Let’s deal with the core of our disagreement by following the money. Under a voucher program, you pay your taxes as always, the money goes into a big government pot, and it pays for every type of schooling – including some that may violate your convictions. About this sort of thing, I agree with Thomas Jefferson, who wrote in the The Virginia Statute for Religious Freedom that:

to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical

(Well, I agree with the tyrannical part, anyway).

Tax credit programs like Arizona’s are different. From the start, taxpayers are given a choice. If they wish, they may donate to any of a wide range of k-12 scholarship organizations that subsidize private school tuition, and receive a dollar for dollar tax cut to offset the cost. That portion of their money – and only that portion of their money – is then used for scholarships for private schooling. So far, there is no conviction-violating compulsion.

Alternatively, taxpayers may choose not to donate to any scholarship organization, in which case they pay their taxes as always and the money goes into the state treasury. From there, the only k-12 educational uses to which it can be put are funding the secular public and public charter school systems. In this scenario, none of the taxpayer’s money goes to fund religious instruction of any kind.

There is no intermixing of funds between these separate options. There are two different pots of money, and each individual taxpayer decides which pot will receive his money.

It is not true that “the government has to devote a higher share of everyone else’s tax dollars to the rest of the budget,” because the government is no longer financially responsible for the education of children once they accept scholarships. To understand this, we again just have to follow the money.

For example, imagine that half of all taxpayers donate to the scholarship program, and half do not. Are the half that do not make donations “subsidiz[ing] the [scholarship students] to the exact same degree” as if it were a voucher? No. Under a voucher program, every taxpayer would be paying some portion of the cost of the program. With tax credits, the entire cost of the private school scholarships is being borne by those taxpayers who are making the donations. The taxes still being paid by non-donors do not go toward scholarships and they do not go up. On the contrary, if anything, the taxes paid by non-donors go down.

Educating students in private schools via scholarship programs costs less than placing them in government schools. The more students leave the government system for independent schools, the less it costs to operate the government schools. [And anyone out there who thinks that fixed costs are dominant in the public school sector should consult the relevant econometric literature. I and others have done marginal cost estimates of public schooling and found it to be in the 80 to 85 percent range – so when a child leaves the public school system, the system saves almost the entire average per-pupil cost.] And as the cost of the public school system goes down, the amount of revenue that needs to be appropriated for it goes down as well. In most states, state level public school appropriations are tied to enrollment, so appropriations will fall as students leave the government system.

The only scenario in which non-donating taxpayers could be said to have an “increased” tax burden due to an an education tax credit program is one in which there was never a tax-funded government school system in the first place. Then, there would be no savings from moving children out of public schools. But even in that fictional scenario, no taxpayer would be forced to pay for devotional religious instruction. They would always have the choice of donating to secular scholarship organizations, if they so wished.

So credits don’t suffer the same conviction-violating, conflict-generating, compulsion problem that afflicts vouchers.

I should add, of course, that public schools are much worse than vouchers in this regard. The conventional public school system not only forces all taxpayers to fund a single official government organ of education, sparking endless battles over what is taught, it puts huge financial pressure on all families to place their kids in that system, by virtue of its lavish funding monopoly. How a nation founded on liberty was ever lured into adopting such a compulsion-laden, Balkanizing system is a very interesting story of its own.

The Ninth Circuit as a Denial of Service Attack on American Justice

The Supreme Court is expected to decide tomorrow whether to summarily overturn a Ninth Circuit Court ruling, hear an appeal of that ruling, or let the Ninth Circuit’s decision stand. The case involves Arizona’s k-12 scholarship tax credit program that helps families afford private schooling, which the Ninth Circuit found last year to violate the First Amendment.

Before the Ninth Circuit handed down its decision, I predicted that it would rule against the tax credit program, and that it would eventually be overturned by the Supreme Court. The first part of that prediction came to pass, and I still expect the second part to as well. For the reasons why SCOTUS will overturn the Ninth Circuit, see Cato’s brief in the case

Ilya Shapiro (with whom I co-wrote that brief) draws attention today to a great column by George Will in which Will likens the Ninth Circuit to a “stimulus package” for the Supreme Court. It’s a funny analogy, but it’s too benign. It’s more accurate to see the Ninth Circuit as a Denial of Service Attack on American justice. A D.O.S. is a computer attack that prevents Internet surfers from accessing a particular website/server by flooding it with spurious requests. By failing to take Supreme Court precedents seriously, as the Ninth Circuit routinely does, it creates a torrent of ridiculous rulings that demand the Supreme Court’s attention, thereby preventing the nation’s highest court from taking other important cases.

If there is a way for SCOTUS to reprimand the Ninth Circuit for spuriously consuming the nation’s most important legal resources, it would be in the interest of justice for it to do so.

Union-Funded Study Says Private Schools Expensive!

I know, it’s a bit of a dog-bites-man headline, but bear with me. A new study by a Rutgers University ed. professor purports to tell us about “Private Schooling in the U.S.: Expenditures, Supply, and Policy Implications.” The trouble is, the study presents no data that are representative of private schooling in the U.S.

Author and ed school professor Bruce Baker analyzed per pupil expenditures of private schools that had registered with Guidestar.org. Based on its mission statement, Guidestar is a service brings together charities seeking donations with would-be donors, in an effort to encourage philanthropy. Only a fraction of the nation’s private schools participate, and they are self-selected into that group. It is reasonable to think that the schools that self-select into Guidestar are the ones most avidly seeking donations. According to a PowerPoint presentation on Guidestar’s site, its top five types of users are:

  • Non-Profit Development Directors
  • Non-Profit Fundraising Directors
  • Grant Writers
  • Foundation Grants Administrators and Donor Services Managers
  • Corporate Foundation Giving Program Managers

Quite possibly, the private schools most actively seeking non-tuition revenue are the ones… receiving the most non-tuition revenue. So not only is the Guidestar population of private schools not randomly selected, and non-representative of private schools nationally, there is reason to believe it is biased in the direction that its author and funders favor.

This would be bad enough, but it gets worse. The author makes no serious attempt to determine the extent of the bias, or to control for it. In fact, he consciously makes it worse: he choses to eliminate from consideration any private schools reporting revenues or expenditures under $500,000, thereby excluding smaller, less expensive schools.

I have literally NEVER seen a serious academic study that starts from a sample that is known to be biased in the direction favored by its funders and then consciously makes matters worse by actively skewing it even further!

An example of the kind of analysis that is supposed to accompany the presentation of a non-random sample to ascertain extent and direction of bias appears in my own 2006 study of Arizona private schools, available here. I dedicate five pages (beginning on page 14) to an assessment of whether and to what extent my survey respondents differed from the universe of all Arizona private schools. Significant effort was expended on that section of the study, because it is both necessary and expected. I was disappointed, though not surprised, by the absence of such a section in the Baker study.

Not only can the Baker study not tell you how much U.S. private schools really spend, it seems to have a little difficulty getting the public school spending figures right, too. For instance, there is a line on page 42 implying that DC public schools were spending $14,000 in 2007.  Federally-reported data show that DC was already spending over $18,000 per pupil in 2005-06. And I’ve shown that it spent $28,000/pupil in 2008-09.

Finally, did I mention that Baker’s study was funded by the NEA-bankrolled “Great Lakes Center for Education Research and Practice”? As Ed Sector pointed out a couple of years ago: “The Great Lakes Center and the NEA’s Michigan affiliate are also linked on a personal level: [the Center’s director] Teri Battaglieri is married to Michigan Education Association Executive Director Lou Battaglieri.”

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Update:  Note that the reason Guidestar only has financial information for a small fraction of the nation’s private schools is that the vast majority of U.S. private schools are religious, and religious schools are not required to file IRS Form 990 (from which Guidestar gets its financial data). The religious private schools that do file Form 990 are thus a small self-selected group that is presumably seeking to maximize its revenue from charitable donations, and hence very likely biased toward higher spending schools.