Topic: Education and Child Policy

Cruz Introduces Education Savings Accounts Legislation

Yesterday, Sen. Ted Cruz introduced legislation to create an education savings account (ESA) program for students in Washington, D.C. In a press release, Cruz’s office stated that the legislation was modeled after Nevada’s ESA, and Cruz called educational choice “the civil rights issue of our era.”

“Each and every child has the right to access a quality education,” Sen. Cruz said. “Not only does school choice give low-income children the same choices and opportunities that children from wealthy families have always had, it also improves the public schools, making them stronger and more effective. This legislation ensures that every child in Washington, D.C., regardless of race, ethnicity, or zip code, has the same opportunity to choose the school that best fits their needs and will help them achieve their very best.”

Last September, Lindsey Burke of the Heritage Foundation and I explained why it’s imperative to break the link between housing and education in D.C. and how an ESA could do just that:

Sadly, access to a quality education is too often dependent on a family’s ability to purchase a home in an expensive area. As The Washington Post reported recently, the median price of a three-bedroom home in a D.C. neighborhood zoned to a public school where reading proficiency rates exceed 80 percent is about $800,000. The median price of similar homes near Eaton Elementary, where the Hills enrolled their children, is north of $1 million. Where the Hills resided in Maryland the median home prices ranged from a much more affordable $330,000 to $460,000.

There is a strong correlation between these housing prices and school performance. In nearly all D.C. neighborhoods where the median three-bedroom home costs $460,000 or less, the percentage of students at the zoned public school scoring proficient or advanced in reading was less than 45 percent. Children from families that could only afford homes under $300,000 are almost entirely assigned to the worst-performing schools in the District, in which math and reading proficiency rates are in the teens.

If policymakers truly believe in equality of opportunity, they must do more to sever the link between education and housing. The District has taken some important steps in the right direction — allowing parents to apply to charter schools and out-of-boundary district schools — but long waiting lists at the best schools have limited their usefulness for most families. […]

ESAs are restricted-use savings accounts parents can use to purchase a wide variety of educational products and services using a portion of the public funding that would have been spent on their child at their assigned district school.

ESAs are an improvement on the traditional voucher model because they empower families to completely customize their child’s educational experience. In addition to private school tuition, parents can spend ESA funds on tutors, textbooks, online courses, special education services and therapies, home-school curricula, and individual public school courses. ESAs even enable families to roll over unused funds from year to year.

These features also make ESAs more economically efficient than vouchers. Whereas traditional vouchers must be spent in their entirety at a single school each year, thereby creating a price floor, there is no minimum amount that ESA holders must spend in one place. The ability to spend ESA funds at multiple vendors or save them for future educational expenditures also gives parents a stronger incentive to economize, which should mitigate tuition inflation. […]

Because the District is under federal jurisdiction, Congress has a rare opportunity to advance a robust school choice option that is both constitutionally appropriate and would make a real difference in the lives of its young citizens by making every child in D.C. eligible for an ESA.

Taking (Tax) Credit for Education

One of the most promising recent developments in education policy has been the widespread interest in education savings accounts (ESAs). Five states have already enacted ESA laws, and several states are considering ESA legislation this year. Whereas traditional school vouchers empower families to choose among numerous private schools, ESAs give parents the flexibility to customize their child’s education using a variety of educational expenditures, including private school tuition, tutoring, textbooks, online courses, educational therapies, and more.

Today the Cato Institute released a new report, “Taking Credit for Education: How to Fund Education Savings Accounts through Tax Credits.” The report, which I coauthored with Jonathan Butcher of the Goldwater Institute and Clint Bolick (then of Goldwater, now an Arizona Supreme Court justice), draws from the experiences of educational choice policies in three states and offers suggestions to policymakers for how to design a tax-credit-funded ESA. Tax-credit ESAs combine the best aspects of existing ESA policies with the best aspects of scholarship tax credit (STC) policies. Like other ESA policies, tax-credit ESAs empower families to customize their child’s education. And like STC policies, tax-credit ESAs rely on voluntary, private contributions for funding, making them more resistant to legal challenges and expanding liberty for donors.

Here’s how it would work: individuals and corporations would receive tax credits in return for donations to nonprofit scholarship organizations that would set up, fund, and oversee the education savings accounts. There’s already precedent for this sort of arrangement. In Florida, the very same nonprofit organizations that grant scholarships under the state’s STC law also administer the state’s publicly funded ESA. Moreover, New Hampshire’s STC law allows scholarship organizations to help homeschoolers cover a variety of educational expenses, similar to ESA policies in other states. 

For more details on how to design tax-credit ESAs, how they would work, and the constitutional issues involved, you can read the full report here. You can also find a summary of the report at Education Next.

Supreme Court Poised to Free Public-Sector Workers from Compelled Union Fees

The conventional wisdom is that Justice Scalia is the swing vote in Friedrichs v. California Teachers Association, but he gave no indication at this morning’s argument that he was anywhere but on the plaintiffs’ side. Chief Justice Roberts and Justice Kennedy – other potential defectors from the pro-workers, anti-compelled-speech side – were similarly solid. With Justice Alito having written the two recent labor-related opinions, the most likely fifth vote for the unions (supported by California and the United States) becomes Justice Thomas, but only because he said nothing, as is his wont.

Not surprisingly, the biggest issue for the more conservative justices was the matter of compulsion: why should non-unionmembers in the public sector be forced to pay “agency fees” for so-called collective bargaining when (a) all issues that are collectively bargained by public-sector unions are matters of public policy (not simply wages and conditions of labor as in the private sector), and (b) those workers disagree with the supposed “benefits” that the unions want them to pay for (e.g., tenure protections versus merit pay). “Is it even okay to force someone to contribute to a cause you do believe in?”, asked Justice Scalia. “We’re not talking about free riders, but compelled riders,” posited Justice Kennedy.

“Since public employment contracts are submitted for public comment, that suggests this is different than private-sector collective bargaining,” explained Chief Justice Roberts, who was silent during the plaintiffs’ half of the argument and an active questioner of the union and governments (typically a sign of agreement with the former and disagreement with the latter). 

While the progressive justices focused on the importance of stare decisis – respecting precedent and the reliance interests built up around it – that didn’t appear to be a major concern for anyone else, regardless of the age of the ruling that’s now under attack (Abood v. Detroit Board of Education from 1977). “Everything that’s collectively bargained [in the public sector] is necessarily a political question,” thundered Justice Scalia in describing why a ruling to strike down agency fees would even comport with Abood’s statement that states can’t force workers “to contribute to the support of an ideological cause [they] may oppose as a condition of holding a job.”

In other words, to the extent we can predict anything based solely on oral argument – take this with a mine of salt – I’d much rather be us (those who support the teachers) than them (those who support the teachers’ union and state and federal governments). If that’s how the case goes, it would be a huge victory for workers’ rights, the First Amendment, and educational freedom – and probably the most important ruling this term. 

We’ll find out by the end of June.

For background and commentary about the case, see this two-minute primerCato’s brief, my two recent op-eds, and this podcast.

Teachers v. the Union

In less than an hour, the U.S. Supreme Court will hear oral arguments in one of the most important cases of the year, Friedrichs v. California Teachers Association. The plaintiffs in Friedrichs are ten California teachers who are suing their union because they believe that laws forcing government employees to join a union or pay them “agency fees” as a condition of employment violate their First Amendment right to free speech, which includes the freedom not to speak, and not to be compelled to subsidize the speech of others.

SCOTUS has previously held that the agency fees may cover collective bargaining activities but not the unions’ political activities. However, as the plaintiffs argue, public-sector collective bargaining is inherently political. For example, more funding for teachers means higher taxes or less money for public parks, etc. The Cato Institute has filed an amicus brief in support of the plaintiffs, and several Cato legal eagles, such as Ilya Shapiro, Andrew Grossman, and Trevor Burrus, have already weighed in

Much of the constitutional analysis floating around the interwebs has focused on whether or not overcoming the supposed “free rider” problem constitutes sufficient grounds for states to grant unions the right to expropriate funds from non-members to cover collective bargaining activities that supposedly benefit them. Champions of free speech have generally attacked the other side’s strongest case, therefore their arguments assume that all teachers do, in fact, benefit from that collective bargaining, but that freedom of speech entails the freedom not to be forced to pay for someone else to advocate even on your supposed behalf. In an op-ed for the Orange County Register, however, Ilya Shapiro and I explain how collective bargaining can actually come at the expense of some teachers:

[E]ven if collective bargaining weren’t inherently political, it’s easy to see how workers could object to the supposed “benefits” negotiated on their behalf. For example, a teacher might prefer higher pay to tenure protections, or a defined-contribution pension plan – such as a 401(k) – to one that has defined benefits.

There are countless ways in which union-negotiated contracts or laws that the unions lobbied to enact can actually harm the interests of individual teachers. For example, “last-in, first-out” laws protect long-serving teachers regardless of ability at the expense of talented, young teachers. Worse, as we explain, such contracts and laws can harm the interests of the very children our education system is supposed to be designed to serve:

Collective bargaining also can come at the expense of students. When schools lack high-quality math teachers because the union contract requires they be paid the same amount as gym teachers, kids lose out. And when that contract has “last in, first out” (LIFO) rules that force a district to lay off a talented young teacher before a low-performing teacher with seniority, students suffer.

Last year, a judge in California struck down such tenure and LIFO rules after finding “compelling” evidence that making it hard to fire low-performing teachers had a negative impact on students, especially low-income and minority students. The judge pointed to research by Harvard professor Thomas Kane showing that Los Angeles Unified School District students who were taught by an English teacher in the bottom 5 percent of competence lose the equivalent of several days of learning in a single year relative to students with average teachers.

“Indeed,” the judge concluded, “it shocks the conscience.”

Sadly, the deleterious effects of collectively bargained tenure rules can be serious and long-lasting. In a 2012 study of more than 2.5 million students, Harvard professors Raj Chetty and John Friedman and Columbia professor Jonah Rockoff found that students who had just a single year in a classroom with a teacher in the bottom 5 percent of effectiveness lose approximately $50,000 in potential lifetime earnings relative to students assigned to average teachers.

If the Friedrichs plaintiffs win, it won’t solve all these problems. Some states will still have LIFO rules, teacher salary and benefits schedules, or related matters enshrined in statute. Nevertheless, if the Friedrichs plaintiffs prevail, it will mean that district school teachers will no longer be forced to support advocacy that they believe works against their interests or the interests of their students. In the long run, less funding for such advocacy may well translate into fewer policies that come at the expense of some teachers and students.
 
Ultimately, a win for the plaintiffs in Friedrichs would be a victory for teachers and their students.

The Folly of Overregulating School Choice: A Response to Critics

Earlier this week, NBER released the first random-assignment study ever to find a negative impact from a school voucher program. Previous gold standard studies had almost unanimously found modest positive effects from school choice, which raises the obvious question: what makes the Louisiana Scholarship Program (LSP) so different?

In an article for Education Next, I argued that, “although not conclusive, there is considerable evidence that the problem stemmed from poor program design.” The LSP is one of the most heavily regulated school choice programs in the nation, and that burden has led to a very low rate of private school participation.  Only about one-third of Louisiana private schools accept voucher students, a considerably lower rate than in most other states. From a survey of private school leaders conducted by Brian Kisida, Patrick J. Wolf, and Evan Rhinesmith for the American Enterprise Institute, we know that the primary reason private schools opted out of the voucher program was their concerns over the regulatory burden, particularly those regulations that threatened their character and identity. For example, voucher-accepting schools in Louisiana may not set their own admissions criteria, cannot charge families more than the value of the voucher (a meager $5,311 on average in 2012), and must administer the state test.

The Unintended Consequences of Regulating School Choice

Yesterday, NBER released the first random-assignment study of a school choice program ever to find a negative result. Students who received a voucher through the Louisiana Scholarship Program (LSP) during the 2012-13 school year were 50 percent more likely to receive a failing score on the state math test than students who applied for but did not receive a voucher. The study also found negative effects on reading, science, and social studies tests.

The previous research on school choice had been almost unanimously positive. Out of a dozen previous random-assignment studies, 11 found positive results overall or for some subgroups, and only one found no statistically significant impact. Until now, none found any harm.

So what happened this time? As I explain at Education Next today:

Although not conclusive, there is considerable evidence that problem stemmed from poor program design. Regulations intended to guarantee quality might well have had the opposite effect. The [Louisiana Scholarship Program]’s high level of private-school regulation appears to have driven away better schools while attracting primarily lower-performing schools with declining enrollments that were desperate for more funding. 

In Washington DC, the Tax Consumers Always Win

Politicians typically try to win votes by giving away money. Being a political Santa Claus usually is seen as more rewarding than being a federal Ebenezer Scrooge. Which is why there’s now a $1.2 trillion federal student loan program which, the New York Times politely observed, “has been removed from the norms and values of prudent lending.”

Federally subsidized student loans have become a political favorite, as Uncle Sam added $82 billion to his loan portfolio in 2015. An incredible 42 million Americans have outstanding debt; 6100 schools have collected subsidized loans. Congress has created an educational “entitlement” akin to Medicare and Social Security, only for the young.

A lot of that cash will never be repaid. As of 2014, 28 percent of those whose loans became due in 2009 were in default. Anticipated lifetime default rates for cohorts 2007 through 2011 steadily increase from 15.9 percent to 18.4 percent. The Huffington Post’s Shahien Nasiripour warned: “Federal student loans made in recent years resemble the toxic subprime mortgage loans that helped cause the Great Recession.”