Commonwealth Foundation
The Case for School Choice
If Pennsylvania’s public schools are broken, why don’t we just fix them? Easier said than done, of course, but it’s not from a lack of trying. For decades, taxpayers, parents and politicians have surrendered to the pleas of the unions and school boards that they would deliver improved academic performance if given more time and money.
Despite Pennsylvania taxpayers spending $26 billion annually on public schools and more per student than 39 other states ($13,000 per child); and despite a decreasing student enrollment of nearly 27,000 student while adding nearly 33,000 employees since 2000, Pennsylvania public schools failed to deliver anything other than stagnating returns on that investment.
In fact, notwithstanding dramatic increases in spending and adding more personnel to “help students,” Pennsylvania’s performance on the National Assessment of Education Progress exam has remained relatively unchanged for years. Moreover, for all of its investment in the current system, Pennsylvania can show only about half of its 11th graders score at or above proficiency on the Pennsylvania System of School Assessment reading and math exams, and ranks among the worst performing states in SAT college entrance exams.
Why have we failed? To answer that question, it is useful to take a step backward and examine the nature of the various reforms that have been tried. All reforms designed to improve the quality of education fall into three categories: Those dealing with rules, those involving resources, and those concerned with incentives.
Rules-based reforms include such things as extending school days and the school year, changing teacher certification and school accreditation requirements, imposing national and state testing, enacting stricter dress codes, and the like. Research has shown that these reforms, while causing marginal improvements, have failed to reverse a large-scale decline in education. While additional rules are a politically expedient and popular means of addressing a problem, they have little or no correlation with improved academic achievement.
Another popular means of attempting to improve public education is through resource-based reforms. They include such measures as increased funding, new textbooks, wiring schools for Internet access, renovating or updating school facilities, reducing class sizes (more teachers per pupil) and other measures that require greater financial resources.
But if more rules and more resources equal better education, we certainly have not seen the results in Pennsylvania.
The third category of educational change is incentive-based reform. This new dynamic compels schools to either improve or risk going out of business. In a limited manner, incentive-based reforms include public school choice through charter schools and public “schools-of-choice” programs, while more expansive programs include choice among private schools, as well as public schools, through vouchers or tax credit-funded scholarships.
Advocates of such reforms suggest that just as consumers improve the products they purchase by exercising their judgment of value in choosing one product over another, parents will be able to improve education by applying their own values and priorities in selecting a school. In this way, schools will be supplied with a needed market incentive that would drive continuous quality improvement.
Senators Jeff Piccola (R) and Tony Williams (D) recently introduced legislation (Senate Bill 1) that would dramatically expand school choice options of low- and middle-income families through tax-funded vouchers and tax credit-funded scholarships—paid for with the $26 billion Pennsylvanians already spend on K-12 education.
Proponents of these types of incentive-based reforms argue that just as businesses respond to heightened levels of competition by making better products, schools will respond to competition by delivering higher-quality education. They believe that assigning children to schools based on where they live is like a business monopoly situation, in which consumers in a particular geographical area can buy a product from only one source. The business/school has no incentive to deliver a quality product because no competitor is pushing it to do so.
Instead of repeating the failed attempts to reform education through new rules or additional resources, these reforms use a market-oriented incentive—competition—to encourage traditional public schools to improve.
By ending the stranglehold of status quo defenders and special interests that financially benefit from the government monopoly of public education, school choice gives hope to Pennsylvania parents and students who may someday soon become the valued customers their tax dollars and efforts deserve.
The ABC’s of SB1
Senate Bill 1, The Opportunity Scholarship Act sponsored by Sen. Jeff Piccola (R) and Sen. Tony Williams (D), would expand scholarships available to children in lower- and middle-income families through the Educational Improvement Tax Credit program and provide low-income students in chronically underperforming public schools with a state-funded voucher.
Essentially, SB1 maps a different route to making sure children can access a better education through an expansion of the state’s successful Educational Improvement Tax Credit (EITC) program, enacted in 2001, which provides scholarships to children in lower- and middle-income families, and a state-funded voucher program for low-income students trapped in schools with the lowest results on state test scores.
Scholarships generated through EITC assist parents in paying tuition at their school-of-choice. Pennsylvania companies receive a 75 to 90 percent tax credit for voluntarily donating to a scholarship organization. While the average scholarship amount a little more than $1,000, and the average family income of scholarship recipients is $29,000, more than 38,000 students received them in 2010, which saved taxpayers $500 million last year
Under SB 1, EITC scholarships would be available to families with an annual household income up to $60,000 plus $12,000 per child. This represents an increase from current eligibility ($50,000 + $10,000 per child). For example, a family with two children with a household income under $84,000 would qualify.
In implementing SB1, the amount of tax credits available for scholarships, including pre-K scholarships, would increase to $75 million. Additionally, $25 million in tax credits would be available for contributions to Educational Improvement Organizations-an increase of nearly 100 percent.
The funding for such a bill would come from corporate tax credits that are taken against taxes businesses owe to the state. Meanwhile, the voucher program would provide money for low-income students in Pennsylvania’s failing schools to attend a private school or another public school of their choice.
Scholarships will be funded by redirecting the current per-pupil state subsidy to the student’s school of choice through the parents. The amount of the scholarship depends on the child’s current school district spending. For example, a low-income student in the Harrisburg School District-which spends $17,000 per student-would be eligible for a voucher worth approximately $9,000. The average state subsidy among all districts is just over $5,000 per student.
Public schools retain 100 percent of local funding (i.e., local property, income, and occupation taxes) for students who transfer with vouchers.
The voucher would be limited to the actual tuition charged by private schools. For example, according to the Pennsylvania Catholic Conference, the statewide average costs for Catholic grade schools are $3,500 per student, and for high schools are $6,500 per pupil.
School districts would have the option of creating local scholarships for students to attend public schools in other districts, usually through an inter-district agreement.
While this sums up what SB1 in a nutshell, CF is under no delusion that SB1 is without legitimate concerns or its critics. Currently, the Pennsylvania School Board Association is circulating a piece called “Questions about vouchers your legislator should be asking.” Others have many concerns as well. Our policy brief, “SB 1 (2011): Questions & Answers,” addresses them all and can be found on our Web site at: http://www.commonwealthfoundation.org/research/detail/sb-1-2011-questions-answers