Another Path To School Choice

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In 1862, French novelist Victor Hugo wrote, "There is one thing strongerthan all the armies in the world and that is an idea whose time has come."Today, that idea is school choice.

The recent defeat of voucher initiatives in California and Michigan hasencouraged opponents of choice, but these setbacks pale compared to progressalready made. In the past 10 years alone, 36 states have embraced charterschools, three have adopted voucher programs, and four have approvededucation tax credits. Two failed ballot initiatives cannot reverse thisclear mandate for greater parental control.

It is no longer a matter of if but rather how the barriers that preventparents from choosing schools will come tumbling down. Vouchers are onemeans to that end, but there are others. One of the most promising is theuniversal education credit.

It works like this: Any taxpayer -- including parents, individual taxpayersand businesses -- who pays tuition for any student to attend a public,private or parochial school would receive a dollar-for-dollar reduction inhis state tax liability. The credit would be worth up to one-half of whatpublic schools spend per student, roughly $3,500 per child, and taxpayersmay take the credit for multiple students provided the combination ofcredits 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 anytaxpayer can direct his tax dollars toward scholarships, scholarship poolswill be large enough to accommodate the country's poorest families who couldnot use the credit directly.

Why would an individual or business pay for a child's education? For onething, education tops the list of employer and public concerns. Given thechoice of pouring taxes into government coffers or targeting some of thosedollars directly to education scholarships, many people would rather assiststudents.

This is not just theory: In Arizona last year, more than 30,000 individualtaxpayers used the state’s education tax credit to direct $14 million towardscholarships. Arizona's credit is limited to $500 and may not be used byparents for their own children or by businesses. A universal educationcredit, worth substantially more and available to all, will raise even more.

Universal education credits have many of the same selling points asvouchers: Both make it easier for parents to shop for schools; bothstimulate improvements in private and public schools as they respond toincreased competition; and both offer escape routes for children condemnedto the bottom tier of public schools.

The Universal Education Credit, however, has some distinct advantages overvouchers. Because vouchers transfer public funds to private schools,legislators feel compelled to oversee uses of those funds. As such, vouchershave increased regulations on private schools. For instance, in Florida, newregulations bar participating schools from collecting tuition over thevoucher amount, and in Milwaukee, even parochial schools cannot requirestudents to participate in religious activities.

Tax credits, however, do not involve public funds -- they simply let parentsdirect their own money to a school of choice or allow taxpayers to directtheir money toward scholarships. Therefore legislators should have no moreincentive to regulate independent schools than they do now. To date, Iowaand Minnesota legislatures have expanded the acceptable uses of their taxcredits, and none of the four states with education tax credits hasincreased regulations on independent schools.

Moreover, because tax credits involve private funds, they have cleared thechurch-state hurdle without incident. State courts have upheld theconstitutionality of education tax credits in Arizona, Illinois and Iowa,and the U.S. Supreme Court has ruled that education tax deductions do notviolate the Establishment Clause.

Critics say such choice proposals are anti-public education. But choice isnot about favoring public or private education. It is about favoringchildren by letting parents decide what works for their kids.

Under the current system, the state assigns children to schools it runs--andthe establishment passes the buck when students fail. School choice meanseducators must deliver the goods now -- not in another five, 10 or 20years -- or watch their students leave for better schools, taking theirmoney with them.

It is time to bring America's 19th-century education system -- characterizedby centralization, political planning and poor student achievement -- intothe 21st century, where decentralization, parental responsibility, andflexibility can create unprecedented opportunities for learning. Adopting auniversal education credit is a first step toward that horizon.

Darcy Ann Olsen and Matthew J. Brouillette

Darcy A. Olsen, director of education at the Cato Institute in Washington, D.C., and Matthew J. Brouillette, director of education at the Mackinac Center in Midland, Mich., are co-authors of "Reclaiming Our Schools: Increasing Parental Control of Education through the Universal Education Credit," just released by the Cato Institute.