Tag: tax credits

A Dialogue on School Choice

The South Carolina legislature is currently considering a tax credit bill intended to give parents an easier choice between public and private schools. It would do this by cutting taxes on parents who pay for their own children’s education, and by cutting taxes on anyone who donates to a non-profit Scholarship Granting Organization (SGO). The SGOs would subsidize tuition for low income families (who owe little in taxes and so couldn’t benefit substantially from the direct tax credit). Charleston minister Rev. Joseph Darby opposes such programs, and I support them. We’ve decided to have this dialogue to explain why. The next installment is here.


Rev. Darby

Rev. Joe Darby

Opening Comment, Con

My local newspaper, The Charleston Post and Courier, recently affirmed their continuing editorial suggestion that we “give School Tax Credits a Try.” I think that’s a very bad idea.

My wife is a public school teacher – and an excellent one at that. She spends much of her time either shaping young minds or preparing to do so, even supplementing meager supplies at her own expense and using creative means to reach and teach children described as “at risk.” Her school is almost 100% “free lunch,” but her students score well on state tests because she’s a good teacher. Most of her colleagues who labor under difficult circumstances are excellent teachers too. Rather than simply blaming an ominous “public education establishment,” we should note the truth – objective studies show that private education is not always a winner. A 2008 United States Department of Education study of the District of Columbia voucher program found that students in the program generally did no better on reading and math tests after two years than their public school peers.

A mass exodus to private schools will weaken public schools by leaving behind parents who have the least ability to advocate for or assist their children, and remove positive peer role models from struggling students. The major beneficiaries of private school choice in South Carolina will not be poor families, for the tuition tax credits and scholarships proposed will not cover the cost of many good private schools and will leave parents to take up the slack and to provide other things like uniforms, transportation and extracurricular activity fees. The major beneficiaries will be affluent parents who will simply have more disposable income when their share of their children’s tuition is decreased.

Before we give school tax credits a “try” we should first give equitably funded, staffed and equipped public schools a “try,” for many southern states have never done so. Excellence in public education for African-Americans was frowned upon after the Post Civil War period of reconstruction. In Paradoxes of Segregation by R. Scott Baker, Charleston, SC School Superintendent A.B. Rhett touted what was Burke Industrial School in 1939 as a place to “supply cooks, maids and delivery boys.”

His views matched those of the political powers that be when South Carolina’s schools were separate and unequal. The U.S. Supreme Court outlawed segregated schools in 1954, but South Carolina held out until the 1960’s. Our legislatively ordained strategies to maintain segregation included allowing parents to “choose” their children’s public schools and giving state “scholarships” to white parents who sent their children to private schools established to maintain segregation – the same essential strategies in the present quest for school tax credits. Many predominately African-American schools were woefully underfunded, and when whites fled the public schools for private schools, public schools sank into a state of chronic neglect. We can’t label public schools as “failures” when we’ve failed our schools. When we fully and equitably fund, equip and staff all public schools, we can then “try” tuition credits, for parents can then choose between quality public and private schools – although that might be bad for the private school business.

I serve as the pastor of a church in peninsular Charleston, where architectural preservation is serious business. Homes and businesses that have been long abandoned or neglected and are all but falling over aren’t torn down – they’re rebuilt and restored in spite of years of chronic neglect. If we can do that for neglected homes, then we should also acknowledge our past failings and do the same for our public schools instead of simply tearing them apart or abandoning them.

***

The Rev. Darby is senior pastor of the AME Morris Brown Church in Charleston, and First Vice President of the Charleston Branch of the NAACP.

 

Andrew Coulson

Andrew Coulson

Opening Comment, Pro

On paper, the United States offers its citizens a solemn promise: work hard and you can succeed here – regardless of your race, sex, creed, or family wealth. But there’s a catch. To secure a good job you first need a good education. On paper, we’ve taken care of that, too. Over the past 150 years we’ve built up a monumental system of free state-run schools that aims to ensure every child access to a quality education.

In reality, it’s all lies.

If you’re in the top fifth of wage earners, there’s just a one-in-a-hundred chance that you are functionally illiterate. If you’re in the bottom fifth or have no income at all, the odds are that you cannot understand a newspaper or follow the directions on a pill bottle. Despite the relentless efforts of generations of reformers, America’s system of public schooling has failed in its most essential duty. We are not equipping all children to succeed in private life and participate in public life. America’s meritocratic promise is a lie.

What can we do about it?

There are those who still believe that the existing system can be fixed. Having compared different kinds of school systems from ancient Greece to the modern day, and from the poorest to the richest nations on Earth, I am convinced that that effort is futile. The problems with the status quo are endemic to its design.

Public schooling hasn’t failed so many children for so long because teachers weren’t smart enough, or paid well enough, or because classes were too large, or the federal government played too small a role. It has failed because it lacks the freedoms and incentives that drive progress in every other field. Public school teachers are hamstrung by regulations and are paid based on time served rather than classroom performance. Parents are not free to seek out the public or private educational setting best suited to their children, they are extorted into the state system because of its monopoly on $12,000 per pupil in government funding.

But should we prevent people from trying to fix it? Certainly not. If they think they can bring to public schooling the same incredible progress that other human endeavors have experienced over the past forty years, more power to them.

By the same token, no one who wants what’s best for kids should stand in the way of a program that would give parents educational alternatives today. Our children cannot wait to see if the current generation of public school reformers will somehow succeed where their predecessors failed.

I’m an engineer by training and a geek by nature. I advocate programs like the one under consideration in South Carolina because the evidence overwhelmingly supports them. Scientific studies comparing this kind of free enterprise education system to conventional public schooling favor the free enterprise approach by a margin of 15 to 1.

Others advocate school choice for more personal reasons. DC school voucher recipient Carlos Battle wrote a poem explaining his gratitude and commitment to school choice, and delivered it to the rally here last week in support of that program:

surrender me from the typical stereotype of a

black young man

one who slings rocks, smokes weed, and keeps a

gun at hand

i am a whole different guy

one who reads books and wears a tie

you see, I’m changing the perception of a young

black man

i’m climbing the ladder of success - try and stop

me, try as hard as you can….

 

Please don’t.

Please don’t stop Carlos or the children who would follow him up that ladder.

***

Andrew Coulson is director of the Cato Institute’s Center for Educational Freedom, and author of Market Education: The Unknown History.

 

9th Circuit Imitates Marcel Marceau

Last month, I warned that the 9th Circuit Court of Appeals would soon be handing the school choice movement a legal setback. Well, it’s here.

As expected, the 9th Circuit has reinstated a lower court challenge to Arizona’s scholarship donation tax credit program. The program allows taxpayers to contribute to non-profit Scholarship Tuition Organizations (STOs) that provide financial assistance to families choosing private schools. The taxpayers can then claim a dollar for dollar credit for their donation.

While this ruling leaves the program intact for the time being, it would almost surely require the tax credit program to be amended if it is allowed to stand. Fortunately, as I noted in my earlier post, the 9th Circuit is overturned as often as a caber at the Highland Games. Its ruling is unlikely to stand if appealed to the U.S. Supreme Court.

At issue is the fact that taxpayers are free to choose the STOs to which they donate their money, and private STOs are free to set criteria for the schools at which their scholarships can be redeemed. There are thus some STOs that offer scholarships only to religious schools. This is essentially the same situation that obtains when taxpayers claim deductions for contributions to non-profit charities. The charities can legally be religious or secular, and they can infuse the services they offer with religion, or not, as they choose. The whole thing is constitutional because it is the taxpayers, not the government, that decides which charity gets their funds. This is all settled law.

To get around the fact that the legal precedents were against it, the 9th Circuit decided to do a compelling impression of Marcel Marceau, pretending to hem itself into an invisible legal box. Specifically, the 9th Circuit decided to pretend that the constitutional restrictions limiting government expenditures (as in school voucher programs) also apply to the private funds at issue under tax credit programs.

That box, of course, does not exist. No government money is spent under the tax credit program, and the tax credits are themselves available on an entirely religiously neutral basis, in scrupulous conformance with the Establishment Clause of the First Amendment.

So here’s my next legal prediction: the constitutionality of the Arizona education tax credit program will ultimately be upheld by the U.S. Supreme Court, and opponents of educational freedom will have to resort to some new ploy in their efforts to herd American families back onto the public school plantation.

Obama Tax Policies and Beyond

I was a panelist for a Tax Notes forum on April 3 regarding Obama’s tax policies. The other panelists were Len Burman of the Urban Institute and Gene Steuerle of the Peterson Foundation. It was an expert and ideologically diverse panel, but nobody was fond of Obama’s fiscal policy direction. (In the photo, that’s former CBO director Rudy Penner to my left. Photo credit to Derek Squires)

Tax Notes summarized the discussion: “A diverse panel of economists and tax specialists largely agreed … that President Obama’s tax and budget plans at best would fail to forestall long-term fiscal ruin and could even hasten its arrival.” One point of agreement was that the tax code is too complex and it doesn’t need the complicated new tax credits that Obama has proposed.

Where we differed was on the need for added federal revenue, and herein lies the big tax policy battle ahead. Len thought that some form of new value-added tax (VAT) was inevitable in order that the government could  raise more money. I am increasingly hearing that argument from top fiscal scholars, and I fear that the drumbeat for a VAT will get louder.

Dan Mitchell and I are dead-set against a VAT because it will be a tool to fund even larger government, as we discuss in Global Tax Revolution. But supporters of limited government need to start watching this issue and making preparations to ward off a Euro-style money machine.

Vouchers Defeated in AZ. Freedom Can Still Prevail

The Arizona Supreme Court has just struck down two voucher programs serving disabled and foster children. This is a terrible blow to the families involved, but there is a way to continue offering them educational freedom: incorporate them into the state’s popular education tax credit programs.

Arizona residents and businesses can already make donations to non-profit scholarship funds and receive a tax credit for their donations. If the caps on those credits are raised, it will be possible to generate enough funding to serve the students formerly participating in the voucher programs. It would even be possible to create non-profit scholarship funds that specifically focus on serving special needs students, which could help parents choose the schools best suited to their individual children’s needs, and allow donors to know that their funds would go toward that cause.

While the Court has said that vouchers are impermissible in Arizona, it has already upheld the state’s tax credits that accomplish the same ends entirely through voluntary action. It is a solution that should satisfy everyone.

Everyone, that is, who has the best interests of children in mind.

Stop Wasting $Billions; Expand School Choice

The Philadelphia school system will spend over $3 billion for the first time next year. That works out to $18,500 per student in a failing school system and most likely leaves out significant costs like teacher health and retirement funds. Maybe it has something to do with the 84 administrative departments burning through funds that should be used to educate children.

In 2007 I highlighted the growing spending insanity in Philadelphia schools and noted that tens millions of dollars could be saved every year through even a small school choice program.

Pennsylvania’s small, successful, and popular donation tax credits system for private scholarships is already saving money and children from failing schools.

In this economy, Pennsylvania can’t afford not to have more school choice.

Why Vouchers?

Yesterday a universal voucher bill heavily promoted by state Sen. Eric Johnson died in the Georgia legislature.

I can’t understand why anyone continues to push for a brand-new voucher program when they already have a universal education tax credit.

Tax credits are more popular and pose less of a threat to private schools and homeschoolers than vouchers, and Georgia already has a tax credit program. All they need to do is lift the cap on available tax credits, which is set at $50 million.

School choice programs actually save money — billions of dollars in fact — so there is no sense in capping the program, especially during an economic downturn.

And there is no sense in pushing for a new, inferior policy when you can focus your efforts on increasing funding for an existing law.