June 19, 2008 8:34AM

Should Suburbia Fear School Choice?

In a recent “Best of the Web” column, the WSJ’s James Taranto uncharacteristically ventures into the world of education policy. Suburban conservatives, he notes, often oppose school choice because they fear the impact of choice programs on their property values and their own children’s schools. “A voucher program,” he adds, “offers little to those who already have choice.”

Taranto, as always an astute political observer, is right that this perceived self‐​interest on the part of suburbanites is a serious hurdle for school choice advocates. Where he goes astray is in assuming that the perception is correct.

According to Taranto, parents who are wealthy enough to pick from among existing public school districts and private schools “already have” everything that a free educational marketplace could possibly offer them. That’s like saying upscale Soviet apparatchiks already enjoyed the benefits of capitalism because they could choose between a Lada and Yugo. The system of schools we have today is not a free market system. We have a legally protected 90 percent state monopoly school system with a small niche of non‐​profit schools mostly serving the religious education market due to the “free” government schools’ inability to serve that niche. This hobbled and distorted system no more captures the full panoply of options a true market would provide than the Yugo and Lada represented the full range of vehicle options in the capitalist West. Furthermore, no existing U.S. school choice program comes close to creating a genuine free market in education, as economist John Merrifield pointed out in a recent Cato Policy Analysis (“Dismal Science: The Shortcomings of U.S. School Choice Research and How to Address Them”).

Getting Americans to realize what they’re currently missing is indeed going to be a tough hurdle for school choice advocates. But it’s a hurdle that can be overcome.

As for the impact of school choice on property values, Taranto is right that there would likely be an important effect, but it is more subtle than he imagines, and there are countervailing forces he ignores. It is more subtle because property values and school district quality are not perfectly correlated. Some desirable places to live have better schools than others, and most homeowners do not currently have children in school. In otherwise desirable areas with mediocre or relatively poor schools, property values would go up, just as they would likely fall in expensive districts with relatively better schools. So, for some suburban homeowners the property value effect would be negative, while for others it would be positive. More importantly, well‐​designed market education reforms will generate very substantial state and local tax savings, year after year, because the current monopoly system is ridiculously expensive. Cato is about to release a study of the fiscal impact of a large‐​scale education tax credit plan, and it would save taxpayers billions of dollars in all five states analyzed. A one‐​time hit in property values may not seem so grim a prospect when offset by this falling tax burden. Most people own their homes for many years, and so would have plenty of time to reap tax savings.

Finally, the idea that a competitive education marketplace would lead to a mass migration of urban children into suburban schools is highly unlikely. Urban parents want the same things as suburban ones: good schools in their own neighborhoods. Urbanites do not commute to suburbia to go to Barnes and Noble or Starbucks. There are already good bookstores and coffee shops in our nation’s cities (in fact, there are good coffee shops in good bookstores in our major cities). Supply rises to meet demand in education as in every free marketplace. Once all families have the financial resources to easily choose schools, more and better private educational options will emerge in cities – just as has been the case with even the tiny Milwaukee voucher program. Most urban families will prefer good local schools to good schools in remote suburbs that would require long bus rides for their children.