Who benefits most from private school voucher programs: families with few options or the schools themselves?
This is a hotly debated question among supporters and critics of school vouchers, and is especially relevant as U.S. Secretary of Education Betsy DeVos has vowed to allow more families to use public dollars to pay for private school tuition.
A 2016 study considers this question and comes back with an answer: It depends. Programs targeted at certain students, like low-income ones, lead to an increase in private school enrollment; but universal choice programs with few if any eligibility requirements don’t cause more students to enter private schools, with schools instead raising tuition.
That’s the conclusion of the research, published in the peer-reviewed Journal of Public Economics, which examined eight private school choice initiatives, including both voucher programs and tax credit subsidies, which offer generous tax breaks for private school fees.
The researchers, Daniel Hungerman of Notre Dame and Kevin Rinz then at the National Bureau of Economic Research, divide the programs into two categories: what they refer to as restricted and unrestricted. Restricted programs limit availability to certain students, such as those who are low-income or have a disability; unrestricted programs are open to everyone.
An example of a restricted program is Florida’s tax-credit program, which incentivizes donations to nonprofit groups that offer tuition scholarships to low- and middle-income families. Arizona’s tax-credit initiative is similar in structure, but is classified as unrestricted because it is open to all students. (Arizona also has tax credit programs targeted at low-income students and those with disabilities.)
The study then looks at how the two types of programs affect school enrollment and finances, using data from tax returns of thousands of private schools.
Restricted-choice programs cause large increases in the number of students attending private school. But “programs that offer unrestricted subsidies lead to price increases but no change in enrollment,” the authors conclude.
In other words, under the universal programs studied, private schools did not admit additional students, but did raise tuition — by an amount the researchers estimated to be roughly the same as the public subsidy. (It’s possible that different — just not more — students enrolled as a result of the choice program.)
This gives credence to concerns that untargeted programs fail to create additional access to private schools, but are a revenue boon for schools.
At the same time, targeted programs seem to have their intended effect of allowing more families to choose private school. (Of course, whether that ends up helping students academically remains the subject of much debate.)
This suggests that school choice advocates who want to expand enrollment in private schools — as opposed to simply allowing them to raise tuition — should favor targeted programs. Some choice supporters have recognized this concern, recommending the creation of education savings accounts, which give families a pot of money to spend on any combination of educational expenses. Anna Egalite, a professor at North Carolina State University, argues that this approach, unlike traditional vouchers or tax credits, puts “downward pressure” on prices by “encourag[ing] parents to be cost conscious.”
DeVos and the Trump administration have not released any details on their promised school choice plan, but some past federal proposals have been focused on low-income student, and most existing state voucher and tax credit programs have restrictions of some sort. However, key school choice groups, including EdChoice and the American Federation for Children, which DeVos used to lead, have supported universal choice policies.
The study is one of the only analyses of how choice programs affect private school enrollment, but it comes with a number of caveats.
The research examined unrestricted programs that offer fairly small subsidies, often significantly less than in voucher initiatives. It’s unclear if the finding — that programs open to all don’t increase private school enrollment — would hold in cases where there were more generous subsidies.
Another caveat: it might be hard to categorize programs with eligibility requirements that most families can meet.
Take Indiana’s voucher program, the largest in the country. The state initially had tight income requirements, limiting the program to poor families; when those rules were in place, private school enrollment rose.
But after the state raised the income threshold to provide partial vouchers to some middle-income families, private school enrollment has essentially flatlined, raising the possibility the school choice initiative hasn’t actually given parents new choices — but simply subsidized existing ones. Since then, the number of students using the program has increased, while the number attending private school without a voucher has dropped precipitously.
It’s impossible to know the effects of Indiana’s voucher program on private school enrollment without a more careful analysis, and the recent study would have categorized it as a restricted program. In recent years many states have seen private school enrollment fall, so the fact that it remained steady in Indiana could be the result of the voucher system.
However, the income requirements in Indiana were more lenient than many of the other programs studied, and over half of students in the state are eligible to receive a voucher.
“At some point the [income] threshold gets so high that the breakdown we offered would not be useful,” said Hungerman, one of the study’s authors.
Colorado Votes 2018
Amendment 73: Understanding the tax increase for education on your Colorado ballot
Colorado voters face an important education decision this November: whether to approve a major statewide tax increase for schools. This request represents the third time in recent years that Colorado voters have been asked to put more money into schools.
Proponents of the measure say Colorado schools can’t keep doing more with less and need new revenue to do right by students. Opponents say that raising taxes will hurt the state’s economic prosperity without necessarily improving student outcomes.
Here’s what you need to know to make a decision:
What does Amendment 73 do?
This measure would create a graduated income tax for people earning more than $150,000 a year and would raise the state corporate tax rate. It also would change the assessment rate — the portion of your property value that is taxed — for commercial and residential property.
Altogether, these changes are projected to raise an additional $1.6 billion a year for preschool through 12th-grade education. That’s in addition to the roughly $9.7 billion in federal, state, and local money that Colorado will spend this year on schools.
The amendment raises the base amount Colorado is required to spend on each student, and it also dedicates money to preschool spots, full-day kindergarten, students with disabilities, those learning English, and those identified as gifted and talented.
Why is this on the ballot?
Colorado’s Taxpayer’s Bill of Rights requires that all tax increases be approved by voters. As for this particular tax increase, Colorado funds its schools below the national average, and since the Great Recession, state lawmakers have diverted to other areas billions of dollars constitutionally due to education.
Proponents of the measure believe the only way to adequately fund Colorado schools is to tap into an additional revenue source, like these tax increases.
Opponents counter that administrative spending has grown faster than student population and teacher salaries, and that the state and school districts could free up money for classrooms by setting new priorities.
I see amendments and propositions on my ballot. What’s the difference?
Propositions become laws and can be changed by the legislature. Amendments become part of the state constitution and can only be changed by another vote of the people. Amendments need the approval of 55 percent of voters to pass, a higher bar than propositions that only require a simple majority.
How will the money be spent? What guarantees do we have that it will reach the classroom?
Amendment 73 requires that new money “supplement and not supplant” existing funding. That means the legislature cannot redirect current spending on education and replace it with this new funding source. The amendment says the legislature should adopt a new formula for distributing money to districts that takes into account student and district characteristics, but it doesn’t lay out exactly what that should look like.
In the meantime, Amendment 73 describes specific uses for $866 million in new revenue:
Base spending per student will go up from $6,769 to $7,300, a 7.8 percent increase
Funding for full-day kindergarten. Right now, districts get a little more than half a student’s worth of funding for each kindergarten student.
An 8.3 percent increase for preschoool, bringing the total to $131 million
A 6.8 percent increase for special education, bringing the total to $296.1 million
An 80 percent increase for gifted and talented programs, bringing the total to $22.5 million
A 93 percent increase for English language learners, bringing the total to $41.6 million
The extra money that districts currently receive for students with disabilities, those learning English and those identified as gifted accounts for a fraction of the additional cost of educating them, particularly in the case of students with more significant disabilities. Districts have to use tracking codes to account for this money and ensure it goes to its intended purpose. In some districts, additional money might translate into better services for these students, while others might use the additional dedicated funding to free up other money.
That leaves $738.6 million that can be spent on public education as determined by the legislature. Once that money lands in school district coffers, they have broad discretion over how to spend it. This is by design and part of an effort to get buy-in from around the state. Many school boards have passed non-binding resolutions promising to spend the money on teacher pay, more mental health supports for students, and lower class sizes.
In turn, opponents have criticized the lack of specificity as a blank check that won’t necessarily increase teacher salaries or improve student outcomes.
A recent analysis from EdChoice found that since 1992, teacher salaries in Colorado had fallen even as per-student funding and the number of administrators had increased. Colorado Department of Education records show that instructional staff — teachers, counselors, speech language pathologists, school nurses — increased by 14 percent between 2006 and 2016 while administrative staff increased by 34 percent. School administrators argue these positions are necessary to support the work that teachers do and keep districts in compliance with a host of new state and federal regulations. In smaller districts, administrators often wear multiple hats. When we ask teachers about this issue, some of them share the concern that too much money gets spent on central administration, even as they also believe schools need more money overall.
You can look up how much your district spends here.
What does it mean when people say Colorado schools are ‘underfunded’? Compared to what? How underfunded?
Back in 2000, after previous years of budget cuts, Colorado voters passed a constitutional amendment that requires school funding to increase by population plus inflation. But starting with the Great Recession, Colorado lawmakers have not allocated all the money required by that amendment. Over the past 10 years, Colorado schools have missed out on $7.5 billion the law requires them to receive. The courts have upheld this budget maneuver. Money from Amendment 73 could not be reallocated during the next downturn, protecting schools but potentially creating other budget problems for the state.
Colorado also gets low marks on equity. Colorado spends much less money on education than most states with similar levels of wealth and economic activity. Per-student spending varies widely around the state, with rich districts often getting more state money than poor ones. Some districts have convinced voters to approve local property tax increases, while other have not — or have such low tax bases that voters would need to take on large increases to generate much benefit. The additional funding from these local tax increases varies from $32 to $5,024 per student.
Amendment 73 wouldn’t change these structural problems with school funding. It would give state lawmakers more money with which to level the playing field. Right now, sending more money to some districts would require reducing funding to others, creating a political minefield.
Will I pay more in income taxes if Amendment 73 passes?
People who earn up to $150,000 a year will keep paying the same 4.63 percent state income tax rate they do now. Those earning more will pay a sliding increase starting at 5 percent for income from $150,001 to $200,000 up to 8.25 percent for income over $500,000. Someone with taxable income of $200,000 would pay an extra $185 a year, while someone with $1 million in taxable income would pay an extra $24,395, according to a fiscal analysis by the state.
The increases will affect about 8 percent of individual and joint income tax filers. Amendment 73 does not include a provision to adjust the income threshold for inflation, so it’s possible that more taxpayers will pay these higher rates in the future.
This change would generate most of the new revenue under Amendment 73.
What’s the effect on corporate taxes?
Amendment 73 would raise the corporate income tax rate from 4.63 percent to 6 percent. You can see how that compares to other states’ corporate income tax rates here. The average corporate income taxpayer would owe an additional $14,139, according to state fiscal analysts.
Would Amendment 73 raise my property taxes?
This is a complicated question. Amendment 73 does not raise property tax rates anywhere in the state. But if it passes, residential property owners will pay more in 2019 than they otherwise would have, while owners of non-residential property will pay less.
Amendment 73 fixes the assessment rate at 7 percent for residential and 24 percent for non-residential property. That’s lower than it is now, but other constitutional provisions would have pushed the residential rate even lower in 2019.
Exactly how much more or less you pay will depend on your property value, real estate trends in your community, and local tax rates.
This represents a partial fix to a complicated fiscal problem that has bedeviled Colorado lawmakers and the administrators of rural taxing entities — school districts, fire protection districts, and others — for years.
In Colorado, your property is assessed at close to market value, but your local tax rate only applies to a portion of that value. That’s the assessment rate. Another constitutional provision known as the Gallagher Amendment ensures that non-residential property owners always pay a larger share of property taxes than homeowners. Since 1982, when the Gallagher Amendment was approved by voters, property values along Colorado’s developed Front Range have skyrocketed, putting the assessment ratios between residential and other property seriously out of whack. Those ratios apply statewide, and many rural communities have seen their already sparse tax base hollowed out.
In the case of schools, that’s meant the state government has had to backfill more and more money that used to be generated by local taxes. Amendment 73 includes a provision to hold the assessment rates steady just for schools for two reasons. One is that it provides property tax relief to ranchers and farmers, which the measure’s backers hope bolsters support in parts of the state that are traditionally more hostile to tax increases. The other is that it ensures the new tax revenue generated by the amendment doesn’t just backfill an ever-deepening hole in rural districts.
Starting this year, 12.59 percent of marijuana tax revenue is also set aside for the regular education budget. That’s about $20 million a year at current rates. Marijuana money is also set aside for various grant programs including one that schools can use to help pay for health professionals such as counselors or nurses. As the state collects more marijuana revenue, the amounts set aside for the grant programs has increased.
However, the marijuana money available to schools represents a tiny fraction of total education spending, and most of it can’t be spent on basic needs like teacher salaries or classroom materials.
As Michigan’s poorest 4-year-olds wait for classroom seats, free pre-K for all kids seems elusive
- 14 hours ago
PHOTO: Christina Veiga
All New York City four year-olds — including these kids who attend school is in the city's education department headquarters — are guaranteed a spot in a city-funded pre-K. In Michigan, far fewer students have access to free preschool.
Michigan is the home to America’s most famous study on the benefits of early childhood education.
But when it comes to providing free prekindergarten for all children, other states and cities are leading the way.
Vermont, Florida, Washington, and the District of Columbia have public programs for all 4-year-olds, regardless of income. Seven more states have greatly expanded their pre-K programs, too, including Wisconsin, where free voluntary pre-K is in the state’s 1848 constitution.
But not Michigan. Not yet, at least.
The pioneering Perry Preschool Study began in Ypsilanti in 1962 and followed 123 study participants starting at age 3 through the age of 40. Among the study’s findings: Those who went to pre-K were more likely to graduate from high school and less likely to repeat grades. They were also less likely to use drugs or commit crimes.
As they grew older, they were more likely to be employed and to have stable homes, savings accounts, significantly higher incomes, and report good relations with their families.
Skills such as cooperative play lay the groundwork for children to get along with others. In addition, learning to use fine motor skills and mastering shapes, colors, numbers, and the alphabet, contribute to future growth.
Furtherresearch has underscored the worth of pre-K, making it a rare realm of bipartisan support. In fact, funding for early childhood education has risen under the past three governors.
“I’ve been around long enough to see Democrats and Republicans in office, and early childhood education continues to be on the radar as a positive,” said Lena Montgomery, director of the Wayne County branch of the Great Start Readiness Program, a state funded initiative for 4-year-olds from low-income families.
But even though the governor’s own 21st Century Education Commission recommended that Michigan expand pre-K with $390 million in new investment, he chose instead to further study the impact of Great Start. In his most recent budget, he allocated $300,000 to do that research, and kept spending for Great Start flat at $245.6 million.
Momentum toward providing publicly funded pre-K, often called universal preschool, has been slowed by cost, teacher shortages, and family resistance, advocates say. They also note that there is no incentive for different institutions to pool their money to pay for a more comprehensive pre-K program in the state.
Other states and cities have navigated similar challenges. But Michigan families face a patchwork of options. They may keep young children at home, pay for private childcare or pre-K, or, if they meet income or disability requirements, they can enroll them in Great Start or federally funded Head Start. Both are designed to support vulnerable children, including families with low-incomes.
But there aren’t enough seats, even for every child in need. Great Start’s Montgomery said she has 27 programs with qualified families on wait lists. It’s common, she said, for policymakers to say they support children. But some families are still falling into the gaps because more money is needed, she said.
About 133,000 Michigan children are not enrolled in any early childhood program.
Half of Wayne County’s 3- and 4-year-olds are enrolled in various pre-K programs, said Iheoma Iruka of Highscope, though she added that “we can’t vouch for the quality of these programs.”
The education plan of Gretchen Whitmer, the Democratic nominee for governor, advocates for a universal program that expands Great Start until all 4-year-olds are eligible, similar to what the 21st Century Education Commission recommended. It would be paid for, according to her campaign staff, with anticipated increases in the School Aid Fund, which is mostly made up of sales, income, and property taxes. It would also use tax revenue from, among other things, the marijuana ballot initiative that’s expected to pass in November. Tax hikes shouldn’t be necessary, her staff said.
Bill Schuette, the Republican nominee, has an education plan that emphasizes third-grade literacy over pre-K. It mentions need-based transportation scholarships for preschoolers, and he said in a recent interview that universal pre-K was an option that he’d consider.
Hope Starts Here, the $50 million initiative created by the Kellogg and Kresge foundations to improve Detroit’s early childhood systems, has a number of suggestions to pay for universal pre-K. Among them: a dedicated tax proposal, a local sales tax on alcohol, coordinated philanthropic and corporate giving, and leveraging all federal grant money.
States and cities around the nation have experimented with other strategies. Georgia tied pre-K funding to the state lottery. New York City’s new universal program for all 3- and 4-year-olds comes from a mix of city, state and federal funding. Oklahoma, a pioneer in the field, discovered that school districts with half-day kindergartens were receiving state money meant for full-day programs. Lawmakers reformed the state aid formula so that those resources went into pre-K. (The districts had been spending the extra money on sports.)
Others have expanded access by combining different sources of money. North Carolina integrated pre-K with its K-12 schools and contributed part of the Title 1 money that’s allocated to school districts. Chicago is moving toward universal pre-K with a mix of state and district budget increases, and block grants. Washington, D.C. blends Head Start and local funding into its education formula.
But regardless of where the money is coming from, opportunities to expand pre-K programs may be missed because of the statewide teacher shortage. In addition, salaries are not as high as they are in K-12 schools. The median salary for Head Start teachers is $27,613, and for lead Great Start teachers, $37,440, according to a statewide advocacy organization.
To recruit and retain more teachers at all levels, including pre-K, a new public-private initiative called Teach 313 launched in Detroit in August. Other places facing shortages or high turnover for its preschool teachers have turned to Teach for America to fill gaps, or provided scholarships for early childhood educators to obtain degrees that would raise their wages.
But before Michigan can explore other strategies and expand into universal pre-K, it needs to make the program it already has available to more families.
If you ask Montgomery from Great Start about her wish list, it begins with providing pre-K to all the children who are sitting on waitlists.
“It would be wonderful to to say to parents, ‘We have a spot for your child,’” Montgomery said. “ ‘You don’t have to wait for someone to drop out or leave.’ It would be wonderful to say to the people who want to run programs, or to expand their programs in their communities, ‘We have the funds for you set up and run a high quality program.’ ”