Tag: tax credits

Education Tax Credits More Popular Than Vouchers & Charters

As Neal wrote about earlier, Education Next has released their new poll, and there are some interesting results.

Surprisingly, the authors buried the lede in their writeup; education tax credits consistently have more support and less opposition than any other choice policy.

This year, donation tax credits pulled in a 29-point margin of support (that’s total favor minus total oppose). In contrast, charter schools had a 25-point margin of support.

The authors added a new, less neutral voucher question that boosted the margin of support to 20 points. They couched the policy in terms of “wider choice” for kids in public schools, and the implication was that it was universal. All three of these additional considerations tend to have a positive impact on support for choice policies.

The standard low-income voucher question showed a big jump this year from a -12 in 2010 to a 1-point margin of support. The last time Education Next asked a low-income tax credit question, it garnered a 19-point margin of support.

Last year, tax credits had a 28-point margin of support (that’s total favor minus total oppose). In contrast, charter schools had a 22-point margin of support and vouchers for low-income kids went -12 points (more respondents opposed).

Public opinion is consistently and strongly in favor of education tax credits over vouchers and even charter schools. And thankfully, they’re a much better policy as well.

Are Unions Really Good for Democrats?

Charles Krauthammer’s latest column is titled “The Union-Owned Democrats.” In it, he recounts a litany of economically ruinous actions being pursued by unions around the country, from blocking free trade agreements to hobbling Boeing’s efforts to compete with Airbus. He writes that “unions need Democrats — who deliver quite faithfully,” and that “Democrats need unions.”

Like a hole in the head.

Yes, it’s been a politically and financially symbiotic relationship for many decades. Unions get rents, Democrats get elected. But, as I argue in a cover story for The American Spectator this month (now on-line: “A Less Perfect Union”), it can’t last.

The biggest unions of all are the public school employee unions—the AFT and the NEA—with well over 4 million members between them. As I point out in my Spectator piece, these unions have become too successful for their own good—and for the good of the Democratic party.

In their game of Monopoly with American kids and taxpayers they have created staggering bloat in public school employment (which has grown 10 times faster than student enrollment over the past 40 years), and they have wheedled total compensation packages worth $17,000 more per year than those of their private sector counterparts (who, according to most of the research, outperform them in the classroom).

But the union-led public school spending spree has nearly bankrupted states all over the country. If California’s public schools had just maintained the same level of efficiency they’d had in 1970 (not gotten better, as other fields have, just stagnated), it would turn the state’s $26 billion deficit hole into a surplus.

Americans are rapidly running out of money to pay for their states’ school monopolies, and they are rapidly introducing school choice bills (42 states have done so this year), to give families alternatives. But as families escape the highly unionized monopoly and send their kids to school in the largely non-unionized private sector, teachers union power will implode. And resentment at having been gored for so long by the now bankrupt and discredited system will focus on the party that fought to preserve it until the bitter end… Democrats.

In my Spectator piece, I explain why that would be a bad thing, and what Democrats could do to avoid that fate. “Public schooling” is just a tool, and an ineffective, unaffordable one at that. Public education is a set of goals and ideals that can be advanced much more effectively by other policy mechanisms. The sooner Democrats realize that, the less likely they are to be dragged to the bottom of the political sea by the sinking union-helmed school monopoly.

Family Friendly DISCO Moves

I like the nightlife, and I’ve got to boogie, so I’m pleased to hear of a new organization called DISCO: Democrats Impatient for School Choice Organization.

There are many ways to shake, shake, shake that education policy booty, however, and if DISCO really wants to be family friendly, they would be better off skipping the voucher element of their choreography.

The organization’s goal is to extend real school choice to low income families. A crucial element in achieving that goal is to ensure that parents, not influential lobby groups or entrenched interests, get to decide the kinds of education they can choose.  Based on both my review of the historical evidence and my recent regression study of modern school choice programs, vouchers are prone to regulatory proliferation. They centralize authority over what a voucher can buy, so that parents who need financial assistance cannot escape whatever limits the politically powerful wish to impose on them.

Tax credits are different. Scholarship donation tax credit programs, such as the one that already exists in Pennsylvania (and which the state House has voted 190 to 7 to expand) create a proliferation of different sources of financial assistance for low-income families. So if one of those sources decides to impose a particular set of rules on how the money is used, it doesn’t affect any of the others. Parents can choose to seek financial assistance from whichever scholarship granting organization most closely matches their own values and preferences, thereby preventing them from being forced into a particular set of choices.

I made this argument in a little more detail in Cato’s amicus brief in the ACSTO v. Winn case, in which the U.S. Supreme Court recently upheld Arizona’s scholarship donation tax credit program.

Don’t Let the Aphorism Be the Enemy of Thought

I am often told that pointing out the serious shortcomings of government-funded school vouchers and the relative superiority of education tax credits is a case of “making the perfect the enemy of the good.”

It’s isn’t.

That is a misapplication of Voltaire’s famous aphorism. What the aphorism exhorts is that we not pursue an unattainable perfection when a good alternative is within reach. Education tax credits are not only attainable, they are usually easier to obtain than vouchers. Consider a recent example: Pennsylvania’s state House has voted 190 to 7 to expand its existing EITC tax credit program while the state Senate has been deadlocked for weeks looking for the bare minimum of votes to pass a voucher bill.

On top of that, it is dubious to cast vouchers as “the good” when they will expand the scope of compulsion of taxpayers to funding many new types of schooling to which they might well object, impose heavy new regulations on private schools (homogenizing the available “choices”), and more pervasively curtail direct payment by consumers in favor of third party government payment.

Even those who may not be fully convinced that vouchers are inferior should pause before trying to enact them in states that already have education tax credit programs with good growth prospects. Why make the dubious the enemy of the pretty darned good?

Educational Freedom in Pennsylvania

The Pennsylvania state House has just passed an expansion of its existing k-12 scholarship-donation tax credit program. The vote was a deafening 190 to 7 in a state that has voted Democratic in every one of the last five presidential elections.

Nevertheless, there is serious opposition to this expansion of education tax credits in the Senate, where several prominent lawmakers prefer a voucher bill. It’s not clear which path the legislature will ultimately take, but there seems to be considerable agreement on the goal: giving parents true freedom of choice in education.

A key point to consider, then, is which type of program is most likely to preserve the freedom and diversity of the education marketplace, thereby giving families a meaningful range of alternatives to choose from. I ran a regression study on precisely this question last fall (now forthcoming in the peer-reviewed Journal of School Choice). What I found is that vouchers impose a large and statistically highly significant burden of additional regulation on private schools while tax credits do not.

This is not the only advantage of the tax credit program, but it is a compelling one.

VICTORY! Supreme Court Upholds Education Tax Credits

Ruling in ACSTO v. Winn today, the United States Supreme upheld Arizona’s k-12 scholarship tax credit program. Under this program, individuals receive a tax cut if they donate to a non-profit scholarship fund that gives out private school tuition aid.

Today’s decision, a reversal of an earlier ruling by the 9th Circuit, found that the respondents had no right to sue to stop the AZ program because they have not been harmed by it. And the reason they have not been harmed is central to why, for nearly 20 years, I have favored education tax credit programs over both traditional public schooling and voucher programs.

Respondents alleged that cutting a person’s taxes is equivalent to spending government money – and since taxpayers are receiving credits for donations to religious organizations, that was ostensibly equivalent to the government giving to those organizations. The Court answered, quite simply: “That is incorrect.” Elaborating, the Court ruled that:

tax credits and governmental expenditures do not both implicate individual taxpayers in sectarian activities. A dissenter whose tax dollars are “extracted and spent” knows that he has in some small measure been made to contribute to an establishment in violation of conscience…. [By contrast,] awarding some citizens a tax credit allows other citizens to retain control over their own funds in accordance with their own consciences.       [emphasis added]

That is precisely the argument I have been making for a very long time (last Friday, at a conference in Berkeley; last year in a blog post, here; a dozen years ago, in my book Market Education: The Unknown History).

With this ruling, the way forward for the school choice movement is clearer than it has ever been. Education tax credits – both the scholarship form operating in Arizona and the direct form operating in Illinois and Iowa – allow for universal access to the education marketplace without forcing any citizen to subsidize instruction that violates their convictions. No other school choice system offers that advantage and it is an advantage that is central to the values of our nation. As Thomas Jefferson wrote in the Virginia Act Establishing Religious Freedom:

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

Public schooling has long been a source of social conflict because it engenders just such compulsion. Education tax credits offer a way of securing universal public education without this blight. It is time to adopt them more widely.

How to Think & Talk About Vouchers & Ed Tax Credits

School Choice Week is here, and there are a lot of people trying to spread the good word about the benefits of increasing educational freedom.

But what benefit of choice is best to focus on?

You can make at most a few points in an oped or on talk radio. On TV, and even in print reporting, you’re lucky to get one point across. And with friends and family, and even politicians, you need to keep the focus where it will do the most good.

So, should you focus on how horrible inner-city schools are, how many lives are destroyed in a failing government system? Maybe. Depends on the person, certainly.

But the evidence suggests that the best message overall is one that focuses on the financial benefits of school choice (and this is even before the financial crisis). People think about vouchers and education tax credits differently. And be careful trying to pull at Democratic heart-strings with arguments that choice will increase educational equity for poor kids … there’s evidence that it backfires!

Take a look at this slide presentation that describes how the public thinks about private school choice, what you should emphasize, and what you should be careful with … it’s not just my opinion, it’s based on evidence from a unique message experiment: