The Wall Street Journal declared 2011 “The Year of School Choice” after 13 states enacted new school choice laws or expanded existing ones. By that measure, 2015 could be “The Year of Educational Choice” as at least 10 state legislatures consider new or expanded education savings accounts (ESAs) in addition to at least 11 states considering new or expanded scholarship tax credits.
ESAs represent a move from school choice to educational choice because families can use ESA funds to pay for a lot more than just private school tuition. Parents can use the ESA funds for tutors, textbooks, homeschool curricula, online classes, educational therapy, and more. They can also save unused funds for future educational expenses, including college.
Currently, two states have ESA laws: Arizona and Florida. Both states redirect 90% of the funds that they would have spent on a student at her assigned district school into her education savings account. The major difference between the two laws is that Arizona’s ESA is managed by the Arizona Department of Education while Florida’s is privately managed by Step Up For Students and AAA Scholarships, the nonprofit scholarship organizations that also issue scholarships through the Sunshine State’s tax credit law. As the Heritage Foundation’s Lindsey Burke and I explained in the most recent edition of National Affairs, there are several reasons to believe that Florida’s model holds advantages over Arizona’s:
First, the non‐profit scholarship organizations are less likely to be captured by opponents than is a government agency. The non‐profits are dedicated to the scholarships, and the idea of school choice is built into their mission. Second, awarding scholarships is the primary mission of a scholarship organization but only an ancillary function of a state education agency — which means that not only will they be more dedicated to the concept but they can generate and retain best practices more easily. Third, scholarship organizations have the ability and incentives to be more flexible in their operation than government agencies, and therefore more responsive to the needs of families. The Arizona education department did not offer workshops for parents outside of regular business hours because employees were not paid for those hours. Non‐profits can more easily implement policies like flextime.
While both Arizona and Florida redirect public funds into the ESAs, a state could create an ESA that is funded through tax credits, which would minimize the threat of overregulation and avoid coercing people into supporting the teaching of ideas that they dislike. New Hampshire’s scholarship tax credit law already has an ESA‐style provision that allows homeschoolers to use scholarship funds for a wide variety of educational expenses.
Several state legislatures are moving fast to enact ESA laws this year. Both the Mississippi Senate and Virginia Assembly passed ESA bills last week. This week, the Virginia Senate’s Education Committee and Oklahoma Senate education subcommittee both approved ESA bills and a Florida Senate panel approved an expansion of their state’s ESA law. Arizona is also considering expanding eligibility for its ESA law.
Other states considering a new ESA law include Colorado, Delaware, Georgia, Montana, and Oregon. Additionally, Politico reported that Iowa, Nebraska, Nevada, Rhode Island, Tennessee, and Texas are likely to take up ESA bills as well. States considering new or expanded scholarship tax credit laws include Georgia, Indiana, Maryland, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, South Carolina, and Texas. In addition, two state senate committees in Colorado have approved a personal‐use education tax credit.
There’s no guarantee that any of these bills will become law, but the number of state legislatures exploring educational choice is encouraging.
[Updated to include Oregon’s ESA bill.]