Tag: school choice

Government Can Tax Your Income, But It Doesn’t Own It in the First Place

As Andrew and Adam have already explained, today’s decision in ACSTO v. Winn, though grounded in the technical legal doctrine of “standing,” is a big win for school choice and state flexibility in education reform.  Even more importantly, it makes clear that there is a difference between tax credits and government spending; to find that tax money was used for unconstitutional ends here would have assumed that all income is government property until the state allows taxpayers to keep a portion of it.  That is not, to put it mildly, how we think of private property.

Of course, even had the Court found that Arizona’s scholarship scheme involved the use of state funds, the program would have been insulated from Establishment Clause challenge because it offered the “genuine and independent choice” that the Court has long required in such cases (most notably the 2002 school voucher case of Zelman v. Simmons-Harris). Many layers of private, individual decisionmaking separate the alleged entanglement of taxpayer funds with religious activities: the choice to set up a scholarship tuition organization (STO), the choice by an STO to provide scholarships for use at religious schools, the choice to donate to such an STO, the choice to apply for a scholarship, and the choice to award a scholarship to a particular student.  

Far from being an impediment to parental control over their children’s education or an endorsement of religious schooling, the autonomy Arizona grants taxpayers and STOs ultimately expands freedom for all concerned.  For more on that, see Cato’s amicus brief.

Also interesting about the case is that it offers us Justice Elena Kagan’s first significant opinion, for the dissenting four justices.  While not surprising that she would be in dissent here, in a “conventional” 5-4 split – although the “conservatives” adopted the position advocated by the Obama administration – there do appear to be some eyebrow-raising turns of phrase.  I won’t comment until I finish reading the opinion, but Ed Whelan offers an initial reaction at NRO’s Bench Memos blog.

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

Unions and Kids

Over at Think Progress, a bevy of commenters dispute an anecdote shared in my book Market Education. Here’s what I wrote, in the teaser to chapter 8:

In late October of 1995, officials of the Pepsi company announced at Jersey City Hall that their corporation would donate thousands of dollars in scholarships to help low-income children attend the private school of their choice. The immediate response of the local public school teachers’ union was to threaten that a statewide boycott of all Pepsi products could not be ruled out. Pepsi vending machines around the city were vandalized and jammed. Three weeks later, company officials regretfully withdrew their offer.

What are government school teachers’ unions so afraid of?

The source article for this episode is of course cited in the book, but here is the link to that article on the Education Week newspaper’s website.

Some of the commenters made the point that policy should not be driven by anecdotes. I agree, which is why I already blogged the evidence that only private sector competition can control skyrocketing public school spending.

Profits Do Oft Disprove Jesters

A new study of Sweden’s nationwide private school choice program reveals that both non-profit and for-profit private schools outperform state-run schools. And, after the most comprehensive set of controls for confounding variables, they do so by an almost identical (and highly statistically significant) margin.

Is there any reason, then, to prefer one form of private organization over the other? Yes. While non-profit private schools have tended to increase the size of their waiting lists in response to growing demand, their for-profit counterparts have done what all commercial enterprises would do in that circumstance: they’ve grown.

For more insights on this crucial distinction, have a look at Peje Emilsson’s presentation from our “Cloning Superman” event, which was broadcast on CSPAN.

If you want more good schools and fewer bad ones, make it easier for entrepreneurs and investors to team up with great educators, and let them earn profits or suffer losses in direct proportion to their ability to serve children.

I Hope to See a LOT More of This…

In Indiana the other night, two grassroots groups–one on the left, the other on the right–got together to discuss the merits of state schooling, home schooling, and private school choice programs. There doesn’t seem to have been any high-profile organization orchestrating the event. It was just two groups of citizens getting together to try to find the best way forward on education policy. Let’s hope this is the beginning of a trend.

“… your month, or even your year”

At one time or another over the past two decades, most school choice supporters have felt like the subject of the “Friends” theme song; that it hasn’t been their day, their week, their month, or even their year.

Things are different now. For one thing, choice programs have proliferated and grown over time, more are being introduced this year than perhaps ever before. And for another, well, this IS their week: the first national School Choice Week.

Events are being held all over the country to celebrate the idea that families should be able to easily choose the best schools for their kids, and that schools should have to compete for the privilege of serving them.

Here at Cato’s Center for Educational Freedom, we’re dipping into the future to see what it holds. How are large scale public/private school choice programs working out in countries that have had them for two or three decades? To find out, we’ve invited the founder of the largest private school chain in Sweden and a Chilean economist researching his own nation’s program to share their experiences and findings on Friday at noon.

Given how alien for-profit k-12 schooling appears to most Americans, imagine the reaction Peje Emilsson got in 1999 when he proposed founding a chain of for-profit schools in Sweden. Already the founder of a multinational communications firm, Peje broached the idea with some of his nation’s top entrepreneurs and economists. If you’d like to find out what they had to say, and how his idea has turned out in practice, you won’t get another chance any time soon. Hope you can join us on Friday – to register for free, click here!

If They Gave Out Awards for Good Policy Design…

…the folks in South Carolina would be top contenders for the gold.

Here’s the thing: all the evidence shows that educators are human beings like the rest of us and that education benefits from the same market freedoms and incentives that have driven progress in every other field. So how do you unleash those market forces so that our kids have the best shot at fulfilling their potentials? For a start:

  • You minimize regulation on what and how teachers teach.
  • You make it easy for families to choose whichever schools (or homeschooling) they deem best for their kids.
  • You encourage people to pay directly for their own children’s education to the greatest extent possible, reserving third-party payment (which is inherently problematic) to an as-needed basis

As a result, schools compete for the privilege of serving each and every child and they are attentive to parents’ demands because otherwise their livelihoods will suffer. Parents, in turn, become more invested in their children’s education—both literally and figuratively—because suddenly they have the power to exercise their educational responsibilities, and they expect to get value for the money they spend.

There are already a few school choice programs around the country that move in this direction, but a bill under consideration in South Carolina would do a better job than any of them. First, it offers tax cuts to parents who personally shoulder the cost of their own kids’ education, and those cuts are more meaningful in size than the ones currently offered in Illinois and Iowa. As Milton Friedman (and Pliny the Younger) rightly said: people are most careful spending their own money on their own families. Second, it extends its benefits to homeschoolers, which few other choice programs do. Third, it provides tuition assistance to low-income families through nonprofit scholarship organizations (SGOs) that are funded by private tax-creditable donations—better than any other system of third-party education aid.

If enacted, this program will not only provide a wonderful new range of educational options to South Carolina families, it will save taxpayers millions due to the tremendous inefficiency of the existing state-run monopoly school system. That combination of improved education options and reduced tax burden will in turn attract new businesses to the state, spurring economic growth. All in all, a pretty darn good deal.