If you've been reading this series, you already know that education tax credits do more than vouchers to encourage the development of a powerful and organized school-choice constituency.
But which scale of school-choice policy is best? One that targets a small population, or one that's broad-based?
Targeted school-choice programs do not build a politically effective constituency for school choice. Opponents of school choice are powerful, and success requires the largest possible pool of support, because the passage of legislation is only the beginning. A strong, broad, and organized political constituency is vital for the defense and expansion of a program after its initial passage.
School choice massively reforms existing power structures. The opposition to such reforms is well organized, well-provisioned, and deeply entrenched. Even when opposition groups are defeated in the legislature, they can regroup to persuade lawmakers to roll back the legislation, work to prevent its expansion in future sessions, appeal for relief in other venues such as the courts or the agencies overseeing the policy, or undermine the policy through the agency responsible for implementation. In Ohio, for instance, officials have run into many problems trying to get accurate and timely information from the public school system on their students necessary for the voucher program to work, and in getting them to inform students of new educational opportunities. Choice programs everywhere are assailed by proposals for new regulations and provisions that are meant quietly to strangle the program to death.
Programs covering all children are much more popular among school-choice supporters and the general public than those that cover only low-income children. The principle of universality permeates America's political culture, and universal school choice programs are consistently much more popular with the general public — Republicans, Democrats and Independents alike — than are targeted programs. The margin of support for universal programs is often huge — two or three to one in favor — and the results have proven consistent over the years, across states, and even across different political dispositions. Head-to-head comparisons are dramatic; a survey conducted for the Mackinac Center in 2003 found that 65 percent of the public preferred a universal tax credit program whereas only 24 percent preferred one targeted to low-income children.
Many potential allies are lost when a targeted program is pursued, while a larger program will drive off few or no allies — in both targeted and broad-based programs, low-income families receive benefits. A large number of private schools, private-school parents and home-schoolers, however, will only weakly support targeted choice efforts, if at all. And among organizations already involved in school-choice efforts, the margin of support for universal programs is 25 points higher than it is for targeted programs.
The only individuals directly benefiting from most targeted voucher policies are low-income parents and their children, who have the fewest resources to devote to political activity, and therefore have little political influence. The political disadvantages of low-income parents are also exacerbated by the fact that the organizations most active in claiming to represent their interests are typically the biggest opponents of school choice. The NAACP and most of the traditional black leadership, much of the Democratic Party establishment and other organizations with a reputation for advocacy on low-income, urban, and minority issues are staunch foes of private school choice — despite the overwhelming support for school choice among the populations for whom they claim to speak. And the organizations that support school choice are typically without a reputation for or an organizational focus on low-income, urban, and minority issues.
Broad-based programs can raise concerns among legislators about the fiscal impact and general disruption they cause in their early stages, but these worries can be addressed without alienating allies or permanently hobbling the program. The easiest and most effective way to address these concerns is to highlight the savings incurred as each student switches from government-run to independent schools. The more students enroll in a choice program, the more a state saves, because it no longer has to pay for new or expanded schools, it can reduce school staffing when necessary, reduce class sizes, and increase per-pupil spending without increasing taxes.
States can also phase broad-based choice programs in by grade level, so that the change occurs gradually over a number of years. A school-choice program can also be steeply means-tested in initial years (or indefinitely, like the recently passed universal voucher law in Utah), with full low-income coverage immediately effective and a gradual increase in middle class coverage over time. This will ensure active and widespread support by middle-class interests while also guaranteeing that the program has a benign budgetary impact even in its early stages.
There is a political tradeoff between the number of families covered and the size of tax credits. Politically, it's usually best to err on the side of reducing the amount of a benefit rather than the number of eligible families, in order to build as wider constituency of supporters. Prospective losses are more noticeable and much more important to individuals than prospective gains. Beneficiaries will notice the rollback of even relatively small benefits, making politicians reluctant to reverse them once established. Small benefits are also important symbols of progress and momentum. These incremental victories make future victories seem more plausible, and school choice organizations can capitalize on them to build participation and momentum in the movement.
Though they've been passed more recently, education tax credit programs have expanded much more rapidly and cover far more children than vouchers do. Comparing only state choice programs that targeted low-income families or children in failing schools, tax-credit programs support nearly 3.5 times the number of students that vouchers support using about the same amount of money. Though the average benefit going to each child is lower in tax credit programs than it is with vouchers, tax credits have the added strength of not fixing artificial prices for education or a scholarship.
This enables scholarship organizations to work with families and schools to determine the amount necessary to finance a child's education, an amount usually far lower than government per-pupil spending or even many set voucher amounts; the average tuition at private schools is about half what is spent per pupil in the public system. Tax credit programs are more flexible, and can thus respond more precisely to a family's needs. That allows tax credits to assist many more families than voucher programs with the same amount of funding. And tax credits also build a larger customer base, which helps politically.
It's no surprise that targeted tax credits cover more children from low-income families than do targeted vouchers. Even targeted tax credit programs still require the involvement of taxpayers, businesses, and scholarship organizations, which provide crucial organizational and political support for the programs.
Targeted tax credits are vastly preferable to targeted vouchers, but targeted programs are second best from all perspectives. School-choice supporters should push for large, broad-based programs.