Commentary

No More Funding Fads, Give Power to the Parents

Mayor Bloomberg recently announced another round of major changes to the New York City education system, proposing that the City fund students directly rather than through schools.

“Weighted student funding” may be the latest fad in education reform, but it is a welcome step in the right direction: decentralizing power in education. Bloomberg should follow his logic where it leads and use education tax credits to put all the power back in the hands of the parents.

In the current funding system, the City’s centralized education bureaucracy uses impenetrable formulas to allocate funds to schools for rigidly defined uses. The Mayor intends to loosen the reins and let education dollars follow each student to her school, in an amount based on her needs. Critics attack the plan and supporters praise it as a “backdoor voucher,” and in some ways it is just that, but it still keeps everyone in a government-run system.

So what happens when the best schools are all booked up? Weighted student funding doesn’t open up seats at good schools. What happens if a child needs the direction and moral education that a religious school offers? Weighted student funding doesn’t give parents that option.

Only school choice puts parents in charge of their children’s futures, so naturally, supporters hope this shift in funding opens the door to a voucher program that allows parents to send their children to religious and independent schools.

Unfortunately for New Yorkers, a voucher program is likely to run into a heap of legal trouble because the state constitution explicitly bans any government funds from being used at religious institutions. The Blaine Amendment, so named for 19th century House Speaker James G. Blaine, isn’t always a death sentence for vouchers, but it will surely scare some supporters away and give cover to many others. Since education tax credits are private money, not public funds, they don’t run afoul of state constitutional restrictions like vouchers might.

That’s one reason why former Governor Pataki proposed an education tax credit for New York State instead, and one reason why tax credits are the best reform for education in New York City. That may also be one reason why other politicians, like Governor Spitzer, oppose vouchers but support education tax credits. Tax credits are a great way to give parents power to choose the best school for their child without being overruled by the courts.

Education tax credits let taxpayers take a dollar-for-dollar credit on donations to scholarship organizations that help lower-income families pay for any school that works for their child. That means if a business owes the city $10,000 in taxes and donates $8,000 to a scholarship organization, they pay only $2,000 in taxes. Individual taxpayers can also take tax credits for their donations and for education expenses such as tuition or textbooks for their own children. If a father owes $500 in taxes and spends more than $500 in tuition, he pays no taxes that year.

Although education tax credits would be great for all of New York, New York City is particularly suited to them because of its painfully high corporate and individual income tax rates.

Mayor Bloomberg has pointed the City in the right direction, but directly funding students will only do so much if they remain shackled to a restrictive system of government-run schools. For true reform, the Mayor should support education tax credits and empower parents entirely.

Adam Schaeffer is a policy analyst for the Center for Educational Freedom.