Tag: school vouchers

Education Tax Credits Aren’t New and Aren’t Just a Work-Around for Voucher Failure

Among the many things that were wrong or at least grossly misleading in Stephanie Saul’s hit piece on education tax credits is her claim that credits were invented in the late 1990s as some underhanded work-around for political and constitutional problems with vouchers. Here’s Saul’s creation myth for tax credits:

Vouchers … were unpopular among many voters and legislators, and several state courts had found them unconstitutional. Proponents decided to reposition themselves, and in 1997, Arizona’s Legislature adopted the first tax-credit scholarship program.

Credits are much more popular and legally protected than vouchers, but these characteristics are the result of important differences in function and principles. Moreover, the credit concept goes back more than forty years (more for deductions) and dominated the school choice landscape for over a decade. What changed in the late 1990s was an equity-focused twist on the concept, bringing the benefits of education tax credits to families without significant tax liabilities.

Reporters often mistake this relatively recent policy innovation for the origin of the credit approach and overlook credit advantages in policy principle and function in favor of the practical/cynical drivers of support for the policy. Sadly, Saul and many other reporters skip serious research in favor of collecting anecdotes that help drive their predetermined narrative.

So, a bit on the origins of education tax credits that Saul and even many school choice proponents miss entirely. (Note: Much of this material comes from my dissertation, which relies heavily on an excellent chapter in The Future of School Choice by Martin West, 2003.)

Despite the pedigree of vouchers as the first school choice proposal and the preferred mechanism of Milton Friedman, and despite the rise of progressive voucher plans in the late sixties and early seventies, education tax credits were arguably the dominant school choice policy from the 1970s through the mid-1980s.

Education tax credits first entered the federal agenda during the Nixon administration, during which he assigned the problem of the struggling private school sector to be studied by a panel within the President’s Commission on School Finance. The attention came in response to growing financial problems among the private school sector—in particular, among Catholic schools pressed by the rapidly declining numbers of priests and nuns who had traditionally provided a quality, low-cost labor pool.

Voucher policies, despite their libertarian lineage, were typically framed in progressive equity terms. Tax credits were typically been framed as a fiscal matter, a way to bring tax relief to the middle class. In taking up a proposal for a federal education tax credit, Nixon explicitly framed the issue as a matter fiscal prudence in support of middle-class families, placing “particular emphasis on the dire fiscal consequences should the nonpublic sector be allowed to collapse” (West 2003, 161). A subsequent panel report released in 1972 included a recommendation for a Federal income tax credit for private school tuition, but legislation would not be introduced until four years later. In 1976, a maximum $1,000 education tax credit for tuition at any school from elementary school to college and vocational school was defeated in the Senate by a surprisingly close 52-37 vote that included support from over a third of the Democrats and half of the Republicans. The fiscal argument for tax credits lacked the power it might hold at the state level, as the overwhelming burden of financing education was shouldered by state and local governments.

Efforts at the state level during this period were sporadic and uncoordinated. The attention of school choice supporters was directed toward federal policy and nothing approaching a school choice “movement” had yet developed.  Many of the state-level efforts throughout the 1970s attempted to enact tax credit and voucher policy through ballot initiatives and referenda (Catterall 1984).

The tax credit issue came back at the federal level during the Carter presidency with a bill introduced amidst discussion of a similar proposal for higher education. Although the bill passed narrowly in the House, it was defeated 56-41 in the Senate and faced a veto by Carter in any case. It was during this battle over k-12 tax credits that opposition from the government education establishment coalesced and began to flex to full extent its considerable power. Literally hundreds of lobbyists descended upon Capitol Hill to argue the interests of the recently formed National Coalition to Save Public Education and the National Education Association (West 2003).

The school choice issue was a relatively stable fixture on the national education agenda during the 1980s, first in the form of tax credits and shifting back to vouchers again in the mid-1980s. The hopes for school choice success at the national level peaked with Reagan’s arrival in the White House. Reagan and the Republican Party gave strong and explicit support for education tax credits throughout the 1980’s—with tax credits, but not vouchers, mentioned specifically in the Republican Party platforms of 1980, 1984, and 1988. Tax credits were the primary focus for the conservative policy world as well. The Heritage Foundation, an influential conservative think-tank, published a book in 1983 assessing the failures and accomplishments of the Reagan administration that had an education chapter proposing tax credits to help the middle-class supplemented by vouchers to help low-income parents (White 1983).

Here’s Where Better Schools HAVE Scaled Up…

Earlier this summer, I released a study comparing the performance of California’s charter school networks with the amount of philanthropic grant funding they have received. The purpose was to find out if this model for replicating excellence was consistently effective. The answer, regrettably, was no.

But a new study we are releasing today finds that there is at least one place where better schools HAVE consistently scaled-up: Chile. Thanks to that nation’s public and private school choice program, chains of private schools have arisen, and they not only outperform the public schools, they also outperform the independent “mom-and-pop” private schools.

For anyone interested in replicating educational excellence, this study by a team of Chilean scholars is worth a look.

Colorado Court Halts School Voucher Program

Last Friday, a Colorado District Court halted the new and unique Douglas County school voucher program with a permanent injunction. School choice legislation is a little like the Field of Dreams: pass it, and they will sue–and we all know who “they” are. So there’s a tendency to dismiss legal setbacks for the choice movement as purely the result of self-serving monopolists exploiting bad laws or partisan, activist judges. There are certainly cases that fall into that category, but this Colorado ruling isn’t one of them.

Oh, the self-serving monopolists and opponents of educational freedom are no doubt cheering it, but the ruling does not read like the work of a rube or an ideologue, and not all of the state constitutional provisions on which it was based can be dismissed as outdated examples of religious bigotry. The state’s “compelled support” clause, in particular, seems to uphold a fundamentally American idea: that it is wrong to coerce people to pay for the propagation of ideas that they disbelieve. Thomas Jefferson, in his Virginia Declaration of Religious Freedom, called this: “tyranny.”

Obviously, conventional public schools have been a source of such coercion for a very long time–everyone has to pay for the public schools, despite profound objections they may have to the way those schools teach history, literature, government, biology, or sex education. That’s why we’ve had “school wars” as long as we’ve had government schools. And obviously vouchers offer the advantage of giving parents a much wider range of educational options for their children than do the one-size-fits few public schools. But despite this advantage, vouchers require all taxpayers to fund every kind of schooling, including types of instruction that might violate some taxpayers’ most deeply held convictions. That’s a recipe for continued social conflict over what is taught.

If there were no alternative to vouchers for providing school choice, perhaps it would make sense to have a debate over which freedoms should take precedence: the freedom of choice of families or the freedom of conscience of taxpayers–and then to sacrifice whichever one was deemed less worthy. But there is an alternative, and it does not require anyone to be compelled to support any particular type of instruction. I discuss this alternative, education tax credits, in a recent Huffington Post op-ed.

People Think of Something as Their Business When It Is Their Business

A WSJ interview with Bill Gates includes this pivotal observation:

“I believe in innovation and that the way you get innovation is you fund research and you learn the basic facts.” Compared with R&D spending in the pharmaceutical or information-technology sectors, he says, next to nothing is spent on education research. “That’s partly because of the problem of who would do it. Who thinks of it as their business? The 50 states don’t think of it that way, and schools of education are not about research. So we come into this thinking that we should fund the research.”

While it’s true that public school districts don’t spend a lot on R&D, a vast army of academics has been cranking out research in this field for generations. The Education Resources Information Center, a database of education studies dating back to 1966, boasts 1.3 million entries. So the problem is not a lack of research, but rather that most of the research is useless and that the rare exceptions have been ignored by the public schools.

Why? Because, as Bill Gates correctly observes, hardly anyone thinks of education as their business. And how do you get masses of brilliant entrepreneurs to think of education as their business? You make it easy for them to make it their business. When and where education is allowed to participate in the free enterprise system, entrepreneurs enter that field just as they do any other–and excellence is identified and scales up. It is a process that happens automatically due to the freedoms and incentives inherent in that system. More than that, it is the only system in the history of humanity that has ever led to the routine identification and mass replication of excellent products and services.

So what happens if you want market outcomes but reject the market system that creates them? You are left to re-invent the wheel… without the only value of pi that makes a circle.

Vouchers in Education and Health Care Reform

E.D. Kain has a post up here (and here) comparing and contrasting vouchers in education and health care. It’s an interesting post that manages both insight and remarkable oversights in a very short space.

And the insight and oversights are bound up with each other:

I think it’s a consistent position to support both single-payer health care – something many progressives advocate – and single-payer education – something many libertarians advocate…

[Medicare] is a lot like what many school choice advocates want. They want government to foot the bill, but they don’t want them to provide the service, or at least not exclusively. This approach works for Medicare, and it could work for schools also. What we really need is single-payer education – not single-provider education. Anyways, the point is that we think about these programs in somewhat inconsistent ways… Even people advocating single-payer want to be able to go to a private doctor. And yet, these same people are terrified of the government paying for education but not actively providing the schooling.

Kain is right that many school choice advocates want a single-payer, government voucher system. But he’s absolutely wrong to imply the libertarian preference is for a single-payer, government voucher system in education. [Note: I look at ideologies as structures reflecting what people think is valuable, what works and why in politics and society.]

In education, we begin with an almost fully socialized system unlike anything else in American society. So its no surprise that education reform discussions produce ideological confusion.

Vouchers, because they move the means of production out of the hands of the government, into the hands of private providers, and afford the consumer some decision-making powers, are improvements from a perspective that advantages individual liberty. But the single-payer, government funding, and regulation inherent in a voucher program remain massive defects from the libertarian perspective.

Our health care system is crippled by government regulation and single-payer (private employer and government) distortions. But it is not fully socialized or government-funded like our education system. A single-payer government health system would make matters worse from the libertarian perspective.

Think of these policy scenarios on a Left-to-Right ideological scale running from 1 on the far Left to 7 on the far Right, with 4 in the middle. Our standard government-financed, government-run, socialized education system is a 1, as far Left as one can go. Voucherizing the entire system would push it to a 2.

Kain is correct that  ”it’s a consistent position to support both single-payer healthcare … and single-payer education,” because both are completely and comfortably on the Left side of the policy spectrum. Vouchers can’t solve all of our problems in education policy.

Jay Greene’s Great New Manifesto

Education scholar Jay Greene has a great new pamphlet called Why America Needs School Choice. Concise and very readable, it does a fine job of introducing the general public to the arguments and evidence in favor of market forces in education. In the process, it debunks six “canards” put forward by defenders of the status quo school monopoly.

Of particular value is Jay’s explanation of why existing “school choice” policies, while often producing positive results, have not yet transformed American education. He notes that these existing programs are hobbled by enrollment limits and regulations, and thus represent only dim shadows of what truly free and competitive education marketplaces would offer. I couldn’t agree more! In fact, the manifesto might more precisely be called Why America Needs a Competitive Education Marketplace, though perhaps that would have narrowed its appeal.

One minor quibble: On page 46, Jay writes that:

No private school choice program has been eliminated legislatively. Aside from a few adverse state court decisions, every choice victory is permanent, and every defeat is temporary.

The implication is that legislative and court action are the only avenues by which choice programs can be overturned. A third, public referendum, exists–and was responsible for the repeal of a Utah school voucher program in 2007. Would-be reformers should remember that lesson: unless the public understands and accepts the value of a policy, it may well overturn it before the first student ever participates. Manifestos like Jay’s are a good way to help spread that understanding.

A more significant problem with this particular passage is that it seems to imply that every “choice” program is a victory, and it asserts every victory is permanent. There is good reason to conclude that neither is the case.

The worldwide historical and modern evidence indicate that private schools will ultimately accept government funding no matter what strings are attached, and that such subsidized schools can consume the unsubsidized sector. This has happened in the Netherlands, for instance, which no longer has an unsubsidized private school sector after a century of government-funded private schooling. And since subsidized schools may not be operated for profit, it has no entrepreneurial chains of private schools.

So what happens if the subsidies eventually accumulate so much regulation that government-funded “private” schools become indistinguishable from today’s government schools? The result would be a move from the current 90% government monopoly to a 100% government monopoly. Not a victory at all, as the international evidence shows that the least regulated, most market-like education systems enjoy the greatest advantage over centrally planned school systems such as our own.

Last year, I ran a statistical analysis of the level of regulation imposed on private schools participating in voucher and education tax credit programs. I found that vouchers impose a large and statistically significant burden of extra regulation on private schools, whereas tax credits do not.  There are other issues with vouchers and charter schools as well. So all “choice” programs are not created equal.

Still, these concerns aside, Jay has written one of the best introductions to the case for educational freedom I’ve seen. I hope it gets a wide readership.

Tuesday Links

  • “Vouchers and tax credits differ from one another in important ways, and Pennsylvanians deserve to have their representatives consider them one at a time.”
  • “So, if the Supreme Court’s precedents defer to Congress’ assessments of its powers, but Congress is relying for ‘constitutional authority’ on the Supreme Court’s precedents, then NO ONE is actually looking at the Constitution itself to see if a bill is within Congress’ enumerated powers.”
  • “Carbon dioxide, thought to be a significant cause of the warming of surface temperature since the mid-1970s, is currently the respiration of the world’s economic civilization. Getting rid of it isn’t as simple as banning CFCs and switching to another refrigerant.”
  • “As Arthur Schlesinger Jr. explained in his book of that name, the presidency’s transformation from limited, constitutional office to Supreme Warlord of the Earth has been ‘as much a matter of congressional abdication as of presidential usurpation.’”
  • It’s the expenditures, stupid: