9th Circuit Imitates Marcel Marceau

Last month, I warned that the 9th Circuit Court of Appeals would soon be handing the school choice movement a legal setback. Well, it’s here.

As expected, the 9th Circuit has reinstated a lower court challenge to Arizona’s scholarship donation tax credit program. The program allows taxpayers to contribute to non-profit Scholarship Tuition Organizations (STOs) that provide financial assistance to families choosing private schools. The taxpayers can then claim a dollar for dollar credit for their donation.

While this ruling leaves the program intact for the time being, it would almost surely require the tax credit program to be amended if it is allowed to stand. Fortunately, as I noted in my earlier post, the 9th Circuit is overturned as often as a caber at the Highland Games. Its ruling is unlikely to stand if appealed to the U.S. Supreme Court.

At issue is the fact that taxpayers are free to choose the STOs to which they donate their money, and private STOs are free to set criteria for the schools at which their scholarships can be redeemed. There are thus some STOs that offer scholarships only to religious schools. This is essentially the same situation that obtains when taxpayers claim deductions for contributions to non-profit charities. The charities can legally be religious or secular, and they can infuse the services they offer with religion, or not, as they choose. The whole thing is constitutional because it is the taxpayers, not the government, that decides which charity gets their funds. This is all settled law.

To get around the fact that the legal precedents were against it, the 9th Circuit decided to do a compelling impression of Marcel Marceau, pretending to hem itself into an invisible legal box. Specifically, the 9th Circuit decided to pretend that the constitutional restrictions limiting government expenditures (as in school voucher programs) also apply to the private funds at issue under tax credit programs.

That box, of course, does not exist. No government money is spent under the tax credit program, and the tax credits are themselves available on an entirely religiously neutral basis, in scrupulous conformance with the Establishment Clause of the First Amendment.

So here’s my next legal prediction: the constitutionality of the Arizona education tax credit program will ultimately be upheld by the U.S. Supreme Court, and opponents of educational freedom will have to resort to some new ploy in their efforts to herd American families back onto the public school plantation.

New at Cato

Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe, here.

  • “Bright Lines and Bailouts: To Bail or Not To Bail, That Is the Question”: Vern McKinley and Gary Gegenheimer have a new Policy Analysis that discusses the failure of bank bailouts.
  • Nat Hentoff reports on Obama’s broken promises of transparency in the Washington Times.
  • In Tuesday’s Cato Daily Podcast, foreign policy analyst Benjamin Friedman discusses the record of Defense Secretary Robert Gates under Obama.

NEA Asks President to Nationalize Industries

The NEA demands that “a dying laissez faire must be destroyed,” and calls on the president to nationalize the credit agencies, utilities and major industries (see AP story at right), and we hear hardly a peep from the punditocracy. Strange.

Well, okay, I’m not actually surprised. This is a real story that actually ran on March 1st… 1934. I tweaked the image to refer to president Obama rather than FDR.

It’s taken three quarters of a century, but the NEA’s plan to nationalize the credit agencies and major industries seems to have finally gotten under way, particularly given the recent assertion of federal control over GM.

One advantage of the delay is that we now have generations of experience with another state-run industry, education, as a guide for what to expect from the latest state takeovers.

And since the president (Obama, not FDR) is starting with GM, it seems only fitting to take a look at the public schools of Detroit. Rather than give you the typical statistical wonkery, though, I thought I’d point readers to this compelling photo essay.

After flipping through it, do you think the Detroit auto industry would have worked better over these past 75 years if it had been run like the Detroit public schools?

Who’s Blogging about Cato

Here’s a round-up of bloggers who are writing about Cato research and commentary:

  • QandO’s Michael Wade offered his own thoughts on the New York Times blogger who said Cato’s voice against bailouts has not met her “expectations of adequate noise.”
  • The Atlantic’s Clive Crook reviewed the new Cato book, The Beautiful Tree, which explains how private education efforts are empowering children in Third World nations.
  • Blogging on Tax Day, Jacob Grier cited Charlotte Twight’s essay in Cato Journal on the history of income tax withholding in the United States.
Topics:

One Small Step for Private Airports

The New York Times reports that the nation’s only privately financed commercial airport is set to open in Branson, Missouri.

Unlike government transportation projects such as the Big Dig, this private project has gone well so far: “ ‘I think it’s some kind of record,’ Jeff Bourk, executive director of the airport, said of the speed of the construction. ‘On other projects I’ve been involved in, there’s a lot more red tape.’”

On the broader issue of America’s airports, the Times notes:

Every one of the 552 airports providing commercial air service in the United States receives some kind of federal money, according to the Federal Aviation Administration, and these airports are owned by public entities, municipalities, transportation districts or airport authorities.

In airports, America embraces socialism, while free enterprise has taken hold abroad. Many major cities around the world have privatized their airports in recent decades, as I discuss here.

The growth in private airports faces a number of hurdles in America. One problem is that government airports receive federal, state, and local subsidies, which makes it hard for private companies to compete. Another problem is the tax-deductibility of state/local (“muni”) bonds, which gives government facilities a financing advantage over private projects.

Thus, two reforms are obvious: end all federal subsidies for state/local infrastructure and repeal the tax deductibility of muni bonds. (Note that the Branson airport found an interesting way around the second problem).

Over time, these two steps would likely create a giant leap forward for privatized infrastructure in America.

Hat tip: Harrison Moar.

Why President Obama Won’t Save Urban Catholic Schools

In today’s Washington Post, Checker Finn and Andy Smarick ask President Obama to save the nation’s vanishing urban Catholic schools. Their commentary does a good job of explaining why he might want to do that: Catholic schools are typically bastions of excellence in otherwise educationally blighted inner-city areas. Economist Derek Neal has shown that black children attending these schools are 26 percentage points more likely to finish high school, and twice as likely to graduate from college, than similar students attending urban public schools.

Finn and Smarick also suggest ways that president Obama could bring the option of private schooling, including Catholic schools, within reach of all families – supporting the spread of state tax credit and scholarship programs around the country, for instance.

What Finn and Smarick don’t do is explain why the president will continue to ignore the evidence and their plea, instead letting the educational prospects of inner-city children erode even further. Three possible explanations occur to me:

  • The president is unfamiliar with the evidence on the superiority of private and especially urban Catholic schools
  • He thinks that his administration will succeed in dramatically improving public schools all over the country, despite the failure of all his predecessors’ efforts
  • He thinks that making it easier for poor parents to choose private schools would hurt him politically

Personally, I don’t believe the first explanation. I can believe the second, but wish I couldn’t (wouldn’t it be nice to have a realist in the Oval Office)? And I can certainly believe the third, but if so, the president simply hasn’t done the political math.

Coming out strongly in favor of public and private school choice at the state level would win Barack Obama substantial new support from independent and moderate swing voters who seem to have been drifting away from him, while costing him very little from his base. The NEA might reduce its level of support, but they’re not going to flip and back Republicans. And few if any Democratic voters would switch party allegiance over a Democratic president’s desire to help poor kids with the most effective policies.