"Public education is a monopoly, and monopolies don’t work." With these words, spoken before an October 1993 joint session of the Michigan Legislature, Governor John Engler sparked the charter school revolution in Michigan, which now serves 30,000 students in over 140 institutions across the state. Unfortunately, one drawback to the charter school movement illustrates how the law of unintended consequences operates to undermine competition rather than encourage it.

What do charter schools do? As government-funded schools that operate under performance-based contracts, they compete with private and traditional government schools for the "business" of parents and students. Many have waiting lists of up to a thousand families who are eager to take advantage of the schools’ innovative approaches to education that are less encumbered by the frivolous rules and senseless bureaucracy that plague traditional government schools.

Many people have praised charters because of their increased accountability to parents and students. Because each school’s funding depends upon whether or not it can attract and retain pupils, charters must offer good programs and opportunities that families want or go out of business and make way for schools that perform better.

So what’s the problem? Isn’t this just the sort of competition that Governor Engler said was needed to shake up the government education monopoly?

Yes and no. Charter schools represent an admirable, albeit limited, effort to introduce market forces into government education, but they nonetheless remain government schools. As such, they enjoy a competitive advantage over nongovernment schools: They are "free."

The unintended but detrimental consequence is that nongovernment schools, which get no taxpayer funding, are forced to compete on an unequal footing with government-funded schools, especially charter schools. Parents who patronize a nongovernment school must pay twice—once in tuition for the school of their choice, and once in taxes for the system they seek to escape.

It is reasonable to expect that many low and middle income families who would prefer a private alternative will opt for "free" tax-funded schools rather than pay tuition to a nongovernment school. Charter schools in particular are attractive to some parents because they are both "free" and often better than the traditional government schools. Nongovernment schools, however, have long played a vital role in the moral, spiritual, and educational development of children, and some administrators worry that the unfair advantages that government charter schools enjoy may be the death-knell for their institutions.

"Charter schools may all but eliminate private education in the inner city," says Ruth McRae, principal of Bethlehem Temple of Inkster Christian Academy. "Parents see ‘free’ and think that the charter school is just a private school without religion. This could very well lead to the end of religious education in the inner city—a place that needs it most."

Are McRae’s fears unfounded? Governor Engler is now proposing to remove the legislative restriction on the number of charter schools that state universities can authorize, which will ensure that their numbers and popularity continue to soar. Lifting the cap on charter schools will increase educational freedom and competition in the long run if the constitutional ban against tuition tax credits is also removed. Conversely, educational opportunity will decrease if tuition-charging nongovernment schools find it impossible to compete with the proliferation of "free" government charter schools—particularly in low-income neighborhoods.

Giving Michigan parents more choices and improving education are admirable objectives, but to accomplish them we must be fair to the nongovernment schools as we increase the number of charters. Tuition tax credits for parents who send their children to parochial and other nongovernment schools would help offset their cost of paying twice for education, but the Michigan constitution, which allows such tax credits for college and university tuition, strictly forbids them for K-12 education.

Charter schools are a step toward freedom of choice in education, but only full and fair choice among diverse government and nongovernment schools will ensure that parents have a vibrant array of options. That’s one important reason why 64 percent of Michiganians, in a recent Detroit Free Press poll, support amending the state’s constitution to permit tuition tax credits—an idea whose time has clearly and finally come.