education savings accounts

Carpe Diem: Fix the Nevada ESA Funding Issue

In 2015, Nevada lawmakers passed the most ambitious educational choice law in the nation: a nearly universal education savings account (ESA) program. The program was scheduled to launch this year, but it immediately drew two separate lawsuits from opponents of educational choice. Last week, the Supreme Court of Nevada upheld the constitutionality of the ESAs, but ruled that the program was improperly funded. Choice opponents were quick to declare that the ESA program is dead, but as Tim Keller of the Institute for Justice noted, the program is only mostly dead, which means it is slightly alive.

Whether the program is fully revived depends entirely on the lawmakers who won plaudits for enacting it in the first place. On Monday, the legislature will meet in a special session to consider whether to subsidize the construction of a football stadium for the Raiders. Fixing the ESA funding would be a much more productive and beneficial use of their time. Sadly, Governor Brian Sandoval announced this week that ESAs would not be on the agenda:

Passage of Education Savings Accounts (ESAs) set a national precedent for school choice and symbolized a significant step toward education equality for every student. I recognize the magnitude of this sweeping policy measure and consider it a major component of the reform package ushered in during the last legislative session. Protecting this program is a top priority for me. There is simply not enough time to add it to next week’s Special Session with full confidence that a rushed outcome will pass constitutional muster.

National School Choice Week Roundup

This week is National School Choice Week, the annual celebration of policies that empower families to choose the education that best meets the individual needs of their children. There have already been several important school choice developments this year, not all of them positive. Below is a roundup of the good, the bad, and the ugly.

Florida expands its education savings account program

It will be hard to top 2015 (the Year of Educational Choice), but 2016 has already seen a flurry of legislative activity. Last week, Florida Governor Rick Scott signed legislation expanding the number of students with special needs who can receive education savings accounts. The bill also renamed the Personal Learning Scholarship Accounts to honor their legislative champion, Senator Andy Gardiner. 

The Year of Educational Choice: Final Tally

This is the seventh and likely final entry in a series on the expansion of educational choice policies in 2015. As I noted at the outset, the Wall Street Journal declared 2011 “The Year of School Choice” after 13 states enacted new school choice laws or expanded existing ones. As of my last update in late September, 15 states had adopted 21 new or expanded educational choice programs, including three education savings account laws, clearly making 2015 the “Year of Educational Choice.” As I wrote previously:

ESAs represent a move from school choice to educational choice because families can use ESA funds to pay for a lot more than just private school tuition. Parents can use the ESA funds for tutors, textbooks, homeschool curricula, online classes, educational therapy, and more. They can also save unused funds for future educational expenses, including college.

Readers will find a complete tally of the new and expanded programs at the bottom of this post, as well as a list of anti-school-choice lawsuits decided in 2015 or still pending.

Lawmakers across the nation are already beginning to consider educational choice proposals for the 2016 legislative session, including Maryland, OklahomaSouth Dakota, TennesseeTexas, and several others, but Florida will likely be the first state to expand choice next year. 

Will Nevada’s Education Savings Account Benefit the Poor?

Perhaps the most interesting development in education policy this year has been Nevada’s adoption of the first education savings account program to offer nearly universal eligibility. Students who attended a charter or district school in the previous year are eligible to have a portion of the state funds that would have been spent on them instead deposited into an account that they can use to purchase a wide variety of educational goods and services. By empowering families with more alternatives to the generally low-performing district schools, the ESA program is also a pressure relief valve for Nevada’s severely overcrowded schools.

However, although low-income families have the most to gain from the ESAs, it appears that higher-income families have been the first to apply for the accounts. The Las Vegas Review-Journal reports:

Overall, half of the nearly 3,100 applications submitted as of Oct. 28 list an address in a ZIP Code among the top 40 percent of median households in Nevada. That’s in contrast to just 10.7 percent of applications from households with median incomes in the bottom 40 percent.

It’s important to note that these are not the final ESA enrollment figures. As Matthew Ladner of the Foundation for Excellence in Education pointed out, these are merely the “earliest of the early adopters.” At the time of the Review-Journal report, Nevada families still had more than two months to apply for an ESA before the program commenced. Nevertheless, opponents of parental choice have seized on the development:

“It’s what we expected,” said Sylvia Lazos, policy director for the education reform group Educate Nevada Now [which is suing to end the ESA program].

The ESA program “was not tailored to low-income parents. It was not tailored to parents with children in (low-performing) schools,” she said. “With every program of this nature, it’s just the reality that affluent and high middle-income families are always in the best position to take advantage of government programs.”

Yet nowhere is this more true than in the government schools. Because the government assigns students to district schools based on the location of the home their parents can afford, wealthier families have access to district schools that are safer and higher quality than those to which low-income students are assigned. It’s not resources that account for the difference in performance – Washington, D.C. spends nearly $30,000 per pupil for one of the worst school districts in the nation. Culture certainly plays an important role, but so does the ability to exit.

A Solution in Search of a Problem

Last week, Georgia Governor Nathan Deal’s Education Reform Commission released its draft recommendations for improving and expanding the state’s school choice programs. While some of the commission’s proposed changes are meritorious, the commission failed to recommend expanding the state’s highly popular, nearly universal scholarship tax credit (STC), instead proposing that the state create a new STC that is highly regulated and much more limited in scope.

The commission’s two proposed changes to the existing STC (having the Department of Revenue count actual contributions against the tax credit cap rather than mere pledges and changing the start date for claiming credits) would make it easier for scholarship organizations to raise funds. The commission also explored the possibility of converting the STC into an education savings account (possibly still funded through tax credits, though the report is not clear about that), enabling families to use the scholarship funds for a variety of educational goods and services beyond private school tuition along the lines of what I described in my testimony before the commission in May. 

The Year of Educational Choice: Update V

This is the sixth post in a series covering the advance of educational choice legislation across the country this year. As of my last update in early July, there were 18 new or expanded choice programs in 14 states. A few days after that update, Wisconsin enacted a new voucher program for students with special needs. And on Friday, North Carolina lawmakers finally passed a long-overdue budget that expanded the state’s two school voucher programs for low-income and special-needs students, bringing the total number to 21 new or expanded programs in 15 states. The updated tally is below.

A lawsuit against the Tar Heel State’s voucher law impeded implementation so only 1,216 low-income students participated last year, barely 10 percent of the 12,000+ applications the state received. In July, the North Carolina Supreme Court upheld the program, clearing the way for the legislature to expand it. 

Educational Choice: Getting It Right

Over the last couple weeks, the Thomas B. Fordham Institute has been holding its second annual Wonk-a-thon. In the wake of Nevada enacting a groundbreaking, nearly universal education savings account (ESA) law, Fordham asked practitioners, scholars, and policy analysts what Nevada must “get right in order to provide positive outcomes for kids and taxpayers.”

Readers can vote for the wonk who offered the wisest analysis here. For a summary of the various recommendations, see here.

ESAs have the potential to radically remake the education landscape. Rather than choose just a single school, parents can use ESA funds for a variety of educational goods and services. Students may spend part of a day in a classroom, part on a computer, and part with personal tutors. Someday, students may even learn in “education malls” where they will choose from among numerous education providers for each subject, each with a different approach or focus. Or perhaps there will be explosive growth in full or partial homeschooling or blended learning. Frankly, we cannot predict with any certainty how education will change over the next few decades in a robust market.

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