June 18, 2015 8:50AM

The Year of Educational Choice: Update III

By Jason Bedrick

This is the fourth post in a series covering the advance of educational choice legislation across the country this year. As I noted in my last entry in May:

[At the beginning of the year,] the stars appeared to be aligned for a “Year of Educational Choice.” By late April, state legislatures were halfway toward beating the record of 13 states adopting new or expanded school choice laws in 2011, which the Wall Street Journal dubbed the “Year of School Choice.” The major difference in the types of legislative proposals under consideration this year is that more than a dozen states considered education savings account (ESA) laws that allow parents to purchase a wide variety of educational products and services and save for future education expenses, including college.

Since the end of May, five more states enacted new or expanded educational choice programs, bringing the total to 13 new or expanded programs in 10 states so far this year. Of these, the most exciting new choice program is Nevada's education savings account, the fifth ESA in the nation and the first to offer nearly universal eligibility.

In addition, at least eight states are still seriously deliberating educational choice legislation. Here's the tally so far:

New Educational Choice Programs

  • Arkansas: vouchers for students with special needs.
  • Mississippi: ESAs for students with special needs.
  • Montana: universal tax-credit scholarship law.
  • Nevada: tax-credit scholarships for low- and middle-income students.
  • Nevada: nearly universal ESA for students who previously attended a public school.
  • Tennessee: ESAs for students with special needs.

Expanded Educational Choice Programs

  • Alabama: Raised the annual scholarship tax credit cap from $25 million to $30 million and raised the contribution cap from $7,500 to $50,000. However, the expansion came at a price: the legislation lowered income eligibility threshold from 275 percent of the federal poverty level to 185 percent (from about $67,000 to about $45,000 for a family of four). Current scholarship recipients are grandfathered in.
  • Arizona: Expanded ESA eligibility to include students living in Native American tribal lands.
  • Arizona: Expanded the types of businesses that can receive tax credits for donations to scholarship organizations.
  • Indiana: Increased amount of tax credits available for donations to scholarship organizations ($2 million over two years).
  • Indiana: Eliminated cap on the value of each voucher. Vouchers are worth 90 percent of the state's per-pupil funding.
  • Louisiana: Expanded school voucher program (funding roughly 600 additional vouchers).
  • Oklahoma: Expanded eligibility for its special-needs tax-credit scholarships and raised the tax credit value from 50 percent--tied with Indiana for the lowest in the nation--to 75 percent. 

Pending Legislation 

  • Delaware: Considering ESA legislation.
  • Florida: Earlier this year, both the FL House and FL Senate unanimously passed slightly different versions of legislation to expand the state's ESA program. However, due to a legislative standoff over unrelated matters, the legislature failed to reach an agreement before adjourning for the summer and the legislation appeared to be dead. Nevertheless, on Monday legislative leaders reached an agreement to include a significant expansion of the ESA program in the budget, more than doubling the funding and expanding the eligibility requirements to additional categories of students with special needs. 
  • North Carolina: Both the NC House and NC Senate passed budgets that expanded funding for the state's voucher program and increased the size of vouchers for students with special needs.
  • Ohio: Considering an expansion to the state's school voucher program.
  • Pennsylvania: Considering an expansion to the state's Opportunity Scholarship Tax Credit.
  • Rhode Island: Considering ESA legislation.
  • South Carolina: The legislature is considering a new "refundable" scholarship tax credit that blurs the line between tax credits and vouchers. A wiser path would be expanding the state's existing scholarship tax credit to include all students and provide enough tax credits to meet demand for scholarships.
  • Wisconsin: The WI Legislature's Joint Finance Committee approved an expansion to the statewide school voucher program that eliminates the restrictive and arbitrary 1,000-student enrollment cap. The proposal would also make students with special needs eligible.

Education reformers also experienced two major disappointments this year. The state senates in both Texas and New York passed tax-credit scholarship legislation with the support of their respective governors, only to see the proposals blocked by the legislatures' lower chambers.

Educational Choice Lawsuits

With educational choice policies ascendant in the state legislatures, defenders of the status quo are fighting to block them in court. Fortunately for students, the courts are increasingly rejecting such challenges.

Earlier this year, the Alabama Supreme Court ruled that the state's tax-credit scholarship law is constitutional. Two months later, a circuit court judge in Florida threw out a challenge to the state's 13-year-old tax-credit scholarship law. In the wake of the judge's decision, the Florida School Board Association dropped out of the lawsuit, though the state's main teachers union said it will appeal the decision.

Meanwhile, the education establishment is also challenging the constitutionality of educational choice laws in Colorado, Georgia, and North Carolina. Despite being in legal limbo for two years, the North Carolina Supreme Court has not yet ruled on the constitutionality of school vouchers in the Tar Heel state. Unfortunately, the legal uncertainty is worrying parents of voucher students, and likely scaring some would-be voucher parents away.

In a similar situation in New Hampshire, parents who could not afford private school tuition without a scholarship were reluctant to apply for one knowing that the program might be ruled unconstitutional. In that case, they would be forced to pull their kids out of their chosen school and away from their new friends and send them to their assigned district school. Fortunately, New Hampshire's choice law ultimately prevailed. The educational choice laws in Colorado, Florida, Georgia, and North Carolina should prevail as well.

[Note: updated to correct impact of the amendment to Indiana's voucher law.]