The recent defeat of voucher initiatives in California and Michigan has encouraged opponents of choice, but these setbacks pale compared to progress already made. In the past 10 years alone, 36 states have embraced charter schools, three have adopted voucher programs, and four have approved education tax credits. Two failed ballot initiatives cannot reverse this clear mandate for greater parental control.
It is no longer a matter of if but rather how the barriers that prevent parents from choosing schools will come tumbling down. Vouchers are one means to that end, but there are others. One of the most promising is the universal education credit.
It works like this: Any taxpayer — including parents, individual taxpayers and businesses — who pays tuition for any student to attend a public, private or parochial school would receive a dollar-for-dollar reduction in his state tax liability. The credit would be worth up to one-half of what public schools spend per student, roughly $3,500 per child, and taxpayers may take the credit for multiple students provided the combination of credits does not exceed their tax liability.
What makes the credit “universal” is that, unlike traditional tax credits, it assists all families, including those with no tax liability. Because any taxpayer can direct his tax dollars toward scholarships, scholarship pools will be large enough to accommodate the country’s poorest families who could not use the credit directly.
Why would an individual or business pay for a child’s education? For one thing, education tops the list of employer and public concerns. Given the choice of pouring taxes into government coffers or targeting some of those dollars directly to education scholarships, many people would rather assist students.
This is not just theory: In Arizona last year, more than 30,000 individual taxpayers used the state’s education tax credit to direct $14 million toward scholarships. Arizona’s credit is limited to $500 and may not be used by parents for their own children or by businesses. A universal education credit, worth substantially more and available to all, will raise even more.
Universal education credits have many of the same selling points as vouchers: Both make it easier for parents to shop for schools; both stimulate improvements in private and public schools as they respond to increased competition; and both offer escape routes for children condemned to the bottom tier of public schools.
The Universal Education Credit, however, has some distinct advantages over vouchers. Because vouchers transfer public funds to private schools, legislators feel compelled to oversee uses of those funds. As such, vouchers have increased regulations on private schools. For instance, in Florida, new regulations bar participating schools from collecting tuition over the voucher amount, and in Milwaukee, even parochial schools cannot require students to participate in religious activities.
Tax credits, however, do not involve public funds — they simply let parents direct their own money to a school of choice or allow taxpayers to direct their money toward scholarships. Therefore legislators should have no more incentive to regulate independent schools than they do now. To date, Iowa and Minnesota legislatures have expanded the acceptable uses of their tax credits, and none of the four states with education tax credits has increased regulations on independent schools.
Moreover, because tax credits involve private funds, they have cleared the church-state hurdle without incident. State courts have upheld the constitutionality of education tax credits in Arizona, Illinois and Iowa, and the U.S. Supreme Court has ruled that education tax deductions do not violate the Establishment Clause.
Critics say such choice proposals are anti-public education. But choice is not about favoring public or private education. It is about favoring children by letting parents decide what works for their kids.
Under the current system, the state assigns children to schools it runs—and the establishment passes the buck when students fail. School choice means educators must deliver the goods now — not in another five, 10 or 20 years — or watch their students leave for better schools, taking their money with them.
It is time to bring America’s 19th-century education system — characterized by centralization, political planning and poor student achievement — into the 21st century, where decentralization, parental responsibility, and flexibility can create unprecedented opportunities for learning. Adopting a universal education credit is a first step toward that horizon.