Tag: school choice

The Charter School Paradox

Is it possible for charter schools to increase educational options and diversity in the public school system but decrease it overall; to spend less money than regular public schools but cost taxpayers more overall; and to outperform regular public schools but decrease achievement overall?

Unfortunately, it is possible, and this mix of intended and unintended outcomes is the “Charter School Paradox.” But it is only a paradox if we take a narrow view of charter school effects. Rigorous new research concludes that public charter schools are seriously damaging the private education market, adding to the taxpayer burden, and undermining private options for families and healthy competition in the education sector.

Fortunately, we have a solution in education tax credits …

Take a look at the full paper by Richard Buddin, my short companion piece, and our brief video on the findings and implications of this path-breaking new research.

Edu-poll Results, for What They’re Worth

Polls are tricky things, giving a veneer of scientific certainty to an endeavor subject to all sorts of biases, methodological problems, etc. Worse, while they might tell us what people think, they do almost nothing to inform us about what policies actually make the most sense. With those provisos in mind – and they apply heavily here – what follows are the highlights of the annual Phi Delta Kappa/Gallup poll on public education, released this morning. Phi Delta Kappa, by the way, is the self-described “premier professional association for educators.”

I’m not going to hit all the topics – you can catch every question here – I’m just going to cover the ones likely of most interest to libertarian types. And here they are:

School choice:  Using PDK/Gallup’s long favored voucher question – the most loaded one, which asks whether respondents favor or oppose allowing people to “choose a private school at public expense” – 44 percent favored and 55 percent opposed. For whatever reason – maybe seeing choice greatly expand recently, maybe growing disgust with teachers unions – favorability rose from 34 percent last year. Charter schools were favored by 66 percent of respondents, and “laws that allow parents to petition to remove the leadership and staff of failing schools” – roughly, “parent trigger” laws – were favored by 70 of respondents.  This last one is probably the worst way to deliver “choice,” but it must sound good. And how did the best way to deliver choice – tax credits – do? The pollsters didn’t even ask about them, probably because they would have polled very well.

National Standards: Asked several questions about their thoughts on the likely effect of “common core standards” – but not the Common Core standards – most people thought having some commonality would be beneficial. But there seems to be a huge disconnect between the question and reality: only 2 to 4 percent of respondents answered “don’t know” or refused to respond to the common core questions, but 60 percent of voters polled just a few months ago said they knew nothing about the actual Common Core standards being implemented in almost every state. So people seem to like generic commonality, but know little about the actual standards that were, unfortunately, purposely kept under the radar by their supporters.

Biggest Problem Facing Schools: Surprise, surprise, by far the most cited “biggest problem” people said their public schools were facing was ”lack of financial support.” 35 percent picked that, versus 8 percent fingering “lack of discipline,” the next biggest vote-getter. What this likely tell us is that (1) we are very slowly coming out of a recessionary period and some districts probably are making some cuts, and (2) people have no idea how much is actually spent on education, or how much it has grown over the decades. It also shows that propaganda – when you hear people say “the schools are underfunded” enough you believe it – works.

Grading Public Schools: As always, people gave their local public schools decent grades and public schools overall lousy ones. This year 48 percent of respondents gave their own public schools an A or B (though that means a majority graded them C-or-below), while only 19 percent gave high marks to “public schools nationally.” Basically, people – who often heavily considered schools when they bought their homes – tend to affirm their own choices, but see the overall system as crummy.

And so goes another Phi Delta Kappa/Gallup poll. See you pollsters next year!

Celebrating Milton Friedman

Today is the 100th anniversary of Milton Friedman’s birth and wonderful pieces have appeared all over the Web to commemorate the occasion. I particularly like Stephen Moore’s editorial in the Wall Street Journal, and economist Bryan Caplan’s brief but thoughtful blog post.

To add to the celebration, we’ve put together a brief interview with Bob Chitester, producer of Milton’s “Free to Choose” documentary series, and provided a link to the site where you can watch the whole thing for free. I’ve also added a few thoughts of my own on Milton’s impact on the school choice movement, and the high standards he set in his life and work.

School Choice Right Focus for African Americans

This morning Republican presidential candidate Mitt Romney spoke to the NAACP – not a group traditionally friendly to GOP pols – and made school choice a focus of his address. It was a politically smart message to deliver (though, importantly, federal vouchers outside of DC would be unconstitutional). School choice is very popular with African-Americans, who are often saddled with the worst public schools.  Indeed, according to a 2011 Education Next poll, 50 percent or more of African-Americans either “completely” or “somewhat” favor vouchers for students to attend private schools, versus just 23 percent or fewer who oppose the idea. (The results depend a bit on question wording). When presented with tax credits for individual and corporate donations for private school scholarships, “somewhat” or “complete” support hits 57 percent.

It’s a not-so-well-kept secret that the strongest opposition to school choice comes not from the people it would most directly benefit, but the wealthier “soccer mom” demographic that doesn’t seem to realize that though they may like their public schools, not everyone can afford to choose a school by buying a house. Of course that’s an incredibly inefficient way for anyone to choose a school, but it goes from an efficiency afterthought to a life-altering problem when you can’t get your child into a place that is safe and able to maximize his or her potential.

Many Americans don’t grasp that. Most African-Americans do.

Obama on DC Vouchers. No ‘June Surprise.’

Reports circulated yesterday that President Obama had reached an agreement with House speaker John Boehner (R-OH) and Sen. Joseph Lieberman (I-CT) to not only sustain the DC school voucher program for another few years but to eliminate the legislative cap on student enrollment—theoretically allowing it to grow without limit. Based the program’s performance to date, this would dramatically improve the graduation rate city-wide, likely boost performance academically, and save hundreds of millions of dollars from the bloated DC K12 budget.

But I didn’t write about it, because I didn’t believe it. Sure enough, later in the day, Secretary of Education Arne Duncan offered a clarification. Far from allowing unlimited growth in the program, the president only intended to allow another 85 students to participate—and still opposes the program in principle.

There is simply no way—no way—that President Obama could support an unlimited expansion in this successful, fantastically cost-effective education program. If he did, he would demoralize the most powerful force within the Democratic Party, the teachers’ unions, in the run-up to this fall’s election. Clearly he has no intention of doing that, given his recent advocacy of using federal dollars to grow the public school workforce (despite the fact that public school employment has already grown 11 times faster than enrollment over the past four decades).

We have a president who, for political reasons, cannot throw his full support behind the only federal education program in the nation’s history that is constitutional, successful, and cost-effective.

State Rep. Balks at Voucher Funding for Muslim School

Just as Louisiana’s legislative session was wrapping up earlier this month, state Rep. Kenneth Havard refused to vote for any voucher program that “will fund Islamic teaching.” According to the AP, the Islamic School of Greater New Orleans was on a list of schools approved by the state education department to accept as many as 38 voucher students. Havard declared: “I won’t go back home and explain to my people that I supported this.”

For unreported reasons, the Islamic school subsequently withdrew itself from participation in the program and the voucher funding was approved 51 to 49. With the program now enacted and funded, nothing appears to stand in the way of the Islamic school requesting that it be added back to the list, and it is hard to imagine a constitutionally sound basis for rejecting such a request.

This episode illustrates a fundamental flaw in government-funded voucher programs: they must either reject every controversial educational option from eligibility or they compel taxpayers to support types of education that violate their convictions. In either case, someone loses. Either poor Muslims in New Orleans are denied vouchers or taxpayers who don’t wish to support Muslim schools are compelled to do so.

It doesn’t have to be that way. Education tax credit programs can ensure universal access to the education marketplace without violating anyone’s freedom of conscience. That’s because tax credits extend choice not only to parents but to taxpayers as well. Taxpayers in Arizona, Pennsylvania, and a half dozen other states can choose to donate to nonprofit tuition-assistance organizations that serve the poor. If they do make a donation, they pick the organization that receives their funds, whether it be Catholic, Muslim, Jewish, secular or entirely indifferent to religiosity.

Similarly, direct education tax credits for parents who pay for their own children’s education compel no one to support those parents’ choices. Such personal education tax credits, which already exist in Illinois and Iowa, merely let parents keep more of their own money. Far from increasing the tax burden on their fellow citizens, parents who pay for their own children’s education with the help of a credit save other taxpayers from having to pay for their children’s state schooling.

The school choice movement does not need to throw taxpayers’ freedom of conscience under the bus to secure freedom of choice for parents.

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.