Tag: vouchers

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.

Ensuring that Indiana’s New Voucher Program Lives up to Budgetary Expectations

A new voucher program in Indiana looks likely to be signed by Gov. Daniels soon, but without a slight modification it may not have the benign budgetary impact that is expected.

As written, the program could have a significant negative impact on state finances if families claim both the vouchers and funds from the state’s existing education tax credits.

There is nothing that precludes children who receive a voucher from also topping off that amount with private funds from the existing education tax credit program. That means a voucher student could accept, for example, $4,500 in government funds and then apply for a tax credit scholarship that reduces state revenue by, say, $2,000. The voucher student would cost the state $6,500, not the $4,500 that would be counted on the books. If state funding is 100 percent sensitive to enrollment, the state would save $5,000 on that student switching, and the net impact on state finances would be a $1,500 loss. In other words, the program could have a negative net impact on state finances due to double-dipping.

From a fiscal standpoint, the state would show an apparent “savings” based on the $4,500 voucher, but this would fail to take into account the reduced revenue due to the credit. And the law requires these on-paper-only savings to be passed out to public schools districts. The result? The state government could be out $7,000 on the student in this example, not the $4,500 it paid out in a voucher. The net impact wouldn’t be neutral, it would be a $2,000 loss.

This scenario looks only at how the vouchers might impact state finances. At the local level, the program is likely to have a strongly positive impact on the resources available for each student. But a school choice program’s impact on state finances – ensuring financial transparency, certainty, and a neutral or positive impact – is a critical concern in its own right.

Critics of expanding educational freedom always claim, incorrectly, that school choice programs are a drain on public resources. But the double-dipping that is allowed under this program could inadvertently prove them right – it would also make Indiana’s existing education tax credit program a mere appendage to the new government voucher system. In short, it’s an unforced error, and worth fixing.

CEOs to Governors: Raise Production Goals and Quality Standards

A group of CEOs called on the nation’s governors this week to raise U.S. business standards. Speaking at the National Press Club in Washington, DC, the CEOs declared that state governments have been misleading consumers about the quality of the goods they’re buying. One retired Fortune-500 CEO declared that:

America’s standing as the most innovative and prosperous nation on earth depends on our ability to boost business’ productivity. As business leaders, we are pledging to stand with governors who commit to high production and product quality standards in scientific and technological fields.

Even today, most readers probably recognize the preceding paragraphs as satirical (I hope!). The idea that it would be helpful to have bureaucrats set production volume and quality standards for high-tech industries is ludicrous on its face. How tragic it is, then, that this event actually took place… with one small twist: the CEOs were calling for more central planning in science and technology education.

Having spent nearly 20 years studying the relative productivity of different types of school systems, it is hard for me to understand how such brilliant business leaders could have arrived at such a profoundly mistaken conclusion. If they care at all about the goals they have set out to achieve, they would be well advised to stop listening to those who are currently advising them, and to look at the evidence on what actually does raise educational productivity. I’ve summarized that evidence in a short piece for the Washington Post, in a journal paper reviewing the past 25 years of worldwide research, and in a book surveying 20 centuries of school systems.

Distilling the findings of that work into a single sentence: it is the freest and most market-like education systems that, throughout history, have done the best and most efficient job of serving both our individual needs and our shared ideals.

Teachers, it turns out, are people. And like other people, they respond to the freedoms and incentives of their workplaces. As a result, the same structures and conditions that optimize the operation of other industries also optimize the operation of school systems. Xerox makes good copiers and Intel makes good chips because they have competitors who will eat their lunch if they don’t; because they have the freedom to explore new and better ways of serving their customers; and because they are rewarded very handsomely for innovations that successfully serve those customers.

Want education standards to rise? Give educators those same freedoms and incentives — and stand back.

“Winning”

I have an op-ed in the Huffington Post today arguing that it’s possible to ensure universal access to education without compelling anyone to support types of instruction that violate their convictions. This eliminates the central objection that the ACLU and ADL have given for their opposition to private school choice. Indeed, if those organizations really care about freedom of conscience, they should prefer the policy solution I outline to the status quo system in which every taxpayer is compelled to support a single government organ of education. Or is there some other reason why the ACLU and ADL oppose liberating American education?

Feel free to chime-in in the comments section on Huff Po.

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.

Obama’s Little Evidence Problem

Last month I wrote a post on President Obama’s selective citation of evidence when debating which education programs to kill and which to keep. Well yesterday the administration struck again, issuing the following statement opposing a bill that would revive DC’s bleeding-out voucher program:

STATEMENT OF ADMINISTRATION POLICY

H.R. 471 – Scholarships for Opportunity and Results Act

(Rep. Boehner, R-Ohio, and 50 cosponsors)

While the Administration appreciates that H.R. 471 would provide Federal support for improving public schools in the District of Columbia (D.C.), including expanding and improving high-quality D.C. public charter schools, the Administration opposes the creation or expansion of private school voucher programs that are authorized by this bill.  The Federal Government should focus its attention and available resources on improving the quality of public schools for all students.  Private school vouchers are not an effective way to improve student achievement. The Administration strongly opposes expanding the D.C. Opportunity Scholarship Program and opening it to new students. Rigorous evaluation over several years demonstrates that the D.C. program has not yielded improved student achievement by its scholarship recipients compared to other students in D.C.  While the President’s FY 2012 Budget requests funding to improve D.C. public schools and expand high-quality public charter schools, the Administration opposes targeting resources to help a small number of individuals attend private schools rather than creating access to great public schools for every child.

So, as I wrote last month, while the Prez. has no problem calling for heaps of dollars for such proven failures as the 21st Century Community Learning Centers – $1.27 billion, to be exact – he won’t support $20 million for something that rigorous research actually works, quoting Andrew Coulson’s recent congressional testimony:

that students attending private schools thanks to this program have equal or better academic performance than their peers in the local public schools, and have significantly higher graduation rates. This, and very high levels of parental satisfaction, com[ing] at an average per pupil cost of around $7,000. By contrast, per pupil spending on k-12 public education in the nation’s capital was roughly $28,000 during the 2008-09 school year.

And such positive results, again in contrast to the President’s statement, are not an aberration for school choice. The highest-calibre research on choice has almost always found clear benefits stemming from it, and has never found negative outcomes.

Obviously I can’t read the President’s mind – he might oppose the voucher program but otherwise love big education spending for philosophical reasons, or he might just be appeasing teachers’ unions – but one thing I do know is that a fair examination of the evidence simply cannot support killing DC vouchers while spending lavishly everywhere else.

Why Ryan-Rivlin Beats ObamaCare on Costs — and Spending

Washington Post blogger Ezra Klein asks of Rep. Paul Ryan’s (R-Wisc.) Medicare voucher proposal (co-authored with former Congressional Budget Office director Alice Rivlin):

Why are the cost savings in his bill possible, while the cost savings in the Affordable Care Act aren’t?…when it comes to the ACA, Ryan firmly believes that seniors will quickly and successfully force Congress to reverse any reforms that degrade their Medicare experience. That’s a fair enough concern, of course. What’s confusing is why it isn’t doubly devastating when applied to Ryan-Rivlin.

Set aside that Klein violates Cannon’s First Rule of Economic Literacy: Never say costs when you mean spending.  And that he uses the word “affordable” to describe ObamaCare.

There are two reasons why the Medicare spending restraints in the Ryan-Rivlin proposal are more likely to hold than those in ObamaCare.

First, ObamaCare’s restraints amount to nothing more than ratcheting down the price controls that traditional Medicare uses to pay health care providers.  Structuring Medicare subsidies in this way – setting the prices that Medicare pays specific providers – makes it very difficult to lower those prices, because the system itself creates huge incentives for providers to organize and lobby to undo those restraints.  As I explain more fully in this op-ed from September 2010, Medicare vouchers would change that lobbying game by reducing the incentives for provider groups to expend resources in the pursuit of higher Medicare spending.  That gives the Ryan-Rivlin restraints a much better shot at surviving.  (Seriously, it’s a pretty cool feature.)

Second, Klein predicts a backlash against Medicare vouchers because he says it amounts to “giving seniors less money to purchase more expensive private insurance.”  The notion that Medicare is less costly than private insurance is pure, uninformed nonsense.  Medicare and a “public option” are attractive to the Left precisely because such programs hide the full cost of their operations from enrollees and taxpayers.  It is a virtue of vouchers that they would reveal to Medicare enrollees the actual prices of the coverage and services they demand, because that information will spur enrollees to be more cost-conscious when selecting a health plan and consuming medical services.  That, in turn, will force insurers and providers to compete on the basis of cost to a degree never before seen in this nation, competition that will generate the sort of cost-saving innovations that Jim Capretta discusses here.

Both of these reasons boil down to the truism that nobody spends other people’s money as carefully as they spend their own.  We’ll make a lot of progress in this country when the Left realizes how much damage they’ve done by ignoring that truism.