21 Frans J. de Vijlder, “Dutch Education: a closed or an open system?” undated government report, Ministry of Education, Culture and Science, The Netherlands. Obtained online at: [ http://www1.oecd.org/els/pdfs/EDSFLLDOCA019.pdf].

22 Juku are private, for-profit supplemental schools attended by most Japanese students in addition to their regular (usually government provided) elementary and secondary schooling. Juku flourish in large measure because they allow parents to obtain the specific services their children require, whereas the Japanese public school system is among the most rigid, uniform, and unresponsive in the world.

23 de Vijlder, “Dutch Education: a closed or an open system?”

24 Heleen Verhage, “Reference levels in School Mathematics Education in Europe: The Netherlands,” European Mathematical Society, Committee on Mathematics Education, March 2001. Obtained online at: [http://www.emis.de/projects/Ref/doc_ems_pdf/EMS_NATIONAL_PRESENTATIONS/EMS_THE%20NETHERLANDS.pdf].

25 Verhage, “Reference levels in School Mathematics Education in Europe: The Netherlands.”

26 Verhage, “Reference levels in School Mathematics Education in Europe: The Netherlands.”

27 Verhage, “Reference levels in School Mathematics Education in Europe: The Netherlands.”

28 Verhage, “Reference levels in School Mathematics Education in Europe: The Netherlands,” p. 4.

29 Benjamin P. Vermeulen, “Islamic Schools In The Netherlands,” working paper, Vrije University, December 2003.

30 Vermeulen, “Islamic Schools In The Netherlands.”

31 Geoffrey Walford, “Funding for Private Schools in England and the Netherlands. Can the Piper Call the Tune?” Occasional Paper No. 8, National Center for the Study of Privatization in Education, Teachers College, Columbia University, November 2000.

32 Estelle James, “The Netherlands: Benefits and Costs of Privatized Public ServicesÑLessons from the Dutch Education system.” In: Geoffrey Walford (ed.), Private Education in Ten Countries: Policy and Practice (London: Routledge, 1999), pp. 179-99.

33 de Vijlder, “Dutch Education: a closed or an open system?”

34 Marina Brouwer, “Concern About Muslim Schools,” Radio Netherlands. February 20, 2002. Obtained online at: [http://www.rnw.nl/hotspots/html/netherlands020220.html].

35 [No author given], “Islamschool niet te controleren,” Het Parool (Dutch news site), October 25, 2002. Obtained online at: [http://www.parool.nl/1035522058940.html].

36 The original 1991 Educational Statute was revised on at least two occasions (in 1993 and 1996). The 1996 version of the law is: “Decreto Con Fuerza De Ley Nº 1, De 1996” (“Legal Decree No. 1, 1996”). Obtained online at: [http://www.munitel.cl/Upload/normajuri/docs/DFL1.pdf].

37 “Decreto Con Fuerza De Ley Nº 1, De 1996,” Title IV, Paragraph II, Article 85. See also article 83.

38 “Decreto Con Fuerza De Ley Nº 1, De 1996,” Title IV, Paragraph II, Article 79.

39 “Decreto Con Fuerza De Ley Nº 1, De 1996,” Title IV, Paragraph II, Article 79(c).

40 “Decreto Con Fuerza De Ley Nº 1, De 1996,” Title IV, Paragraph II, Article 79.

41 “Decreto Con Fuerza De Ley Nº 1, De 1996,” Title IV, Paragraph II, Article 80.

42 Claudio Sapelli and Bernardita Vial, “Evaluating The Chilean Education Voucher System,” Instituto de Economia Pontificia Universidad Catolica de Chile, working paper, April, 2002, p. 3. Obtained on-line at: [http://www.msu.edu/~herrer20/documents/ec823/papers/paper4.pdf].

43 One exception is the refundable Minnesota education tax credit introduced in 1998. Because it is refundable, this program could be classified as a voucher, except that it is usable for everything except private school tuition. Because it cannot be used for tuition, this program does not constitute a market education policy and is not discussed here.

44 Herbert Walberg and Joseph Bast trace the origins of this idea back to 1980 in: Walberg and Bast, Education and Capitalism, p. 281, footnote 56.

45 See: Coulson, Market Education, p. 277-279. And Coulson, “How Markets Affect Quality.”

46 Francisco A. Gallego, “School Choice, Incentives, and Academic Outcomes: Evidence for Chile,” Massachusetts Institute of Technology, forthcoming.

47 Coulson, Market Education, p. 90-92.

48 This is a fact repeatedly demonstrated by the comparative international and historical education survey presented in: Coulson, Market Education.

49 Bas Braams, “Mathematics in the OECD PISA Assessment,” published correspondence, July 2002. Obtained online at: [http://www.math.nyu.edu/mfdd/braams/links/pisa0207.html].

50 David Nohara, “A Comparison of the National Assessment of Educational Progress (NAEP), the

Third International Mathematics and Science Study Repeat (TIMSS-R), and the Programme for International Student Assessment (PISA),” National Center for Education Statistics, U.S. Department of Education, Working Paper no. 2001-07, June 2001. Obtained online at: [http://nces.ed.gov/pubs2001/200107.pdf].

51 One source collecting a large amount of comparative academic achievement data for fee-charging and other private schools versus public schools is: Coulson, “Testing a Theory of Market Education.”

It should be noted that the comparative analysis of public and private school performance on the PISA test by Jaap and Dronkers (citation follows), has methodological issues. Specifically, the authors make questionable assumptions about which school and family factors are truly exogenous (i.e., are unaffected by school type) and which are not. Controlling statistically for factors that are not truly exogenous can lead to biased (incorrect) estimates of the relative performance of the different school types. Unfortunately, there is not the space to discuss these issues in detail here. The study is:

Jaap Dronkers and Peter Robert, “The Effectiveness of Public and Private Schools from a Comparative Perspective,” European University Institute (EUI, Florence), EUI Working Paper SPS No. 2003/13. Obtained online at: [http://www.iue.it/PUB/sps2003-13.pdf].

52 For the role of direct payment of fees by parents in preserving parental choice, see: Coulson, Market Education. For evidence on the superior effectiveness and efficiency of fee-charging over government subsidized schools, see: Coulson, “Implementing Education for All: Moving from Goals to Action,” and: Coulson, “How Markets Affect Quality.”

53 Between 1919-20 and 2001-02, inflation adjusted per-pupil spending rose by a factor of either 15.6 or 19.5, depending on whether you use the average daily attendance or fall enrollment figures (respectively) for the pupil count. Computed from table 166 in: Thomas D. Snyder, Digest of Education Statistics, 2002, document no. NCES 2003Ð060 (Washington, DC: U.S. Department of Education, National Center for Education Statistics, 2003), p. 194.

54 Glen Y. Wilson, “The Equity Impact of Arizona’s Education Tax Credit Program: A Review of the First Three Years (1998-2000),” research report, March 2002. Obtained online at: [http://www.asu.edu/educ/epsl/EPRU/documents/EPRU%202002-110/epru-0203-110.htm].

55 This has been suggested, among others, by Eric O’Keefe of the Lead Foundation.

56 On pages 301 and 302 of Walberg and Basts’ Education and Capitalism, the Heartland Plan’s voucher surplus accounts seem to be mistakenly conflated with, and referred to as, Education Savings Accounts. The authors write that “ESAs avoid the pitfall of relying too much on third parties (government in the current system or scholarship-granting entities under the tuition tax-credit option) to pay for schooling.” That is of course only true of traditional ESAs. It is not true of the Heartland Plan’s voucher surplus accounts, as the authors seem to imply.

57 Omitting restrictions on how parents can spend their credited earnings would be desirable for several reasons. First, it would ensure that parents are just as deliberate and thoughtful about how they spend the credited funds as they are about how they spend the rest of their money. People are most careful about how they spend their money when they have to weigh the value of alternative expenditures against one another. We evaluate how good a deal one purchase is by comparing it to what other goods or services we could buy with the same money. Restricting the credit so that it can only be spent on one thing (e.g., full day tuition) short-circuits that evaluative process. Second, narrow use restrictions limit the range of services that parents can consume, stifling specialization and innovation in educational services. Finally, an unrestricted credit would provide less of a toe-hold for future regulatory encroachment. If the credit can only be used, say, for tuition and tutoring fees, then it would not be a great stretch for a subsequent legislature to add provisions limiting which kinds of instruction and tutoring are covered. If the credit can be used for any purpose, by contrast, it would be a significant leap to add any such limits.

58 Walberg and Bast, Education and Capitalism, p. 309.

59 Pierce v. Society of Sisters, 268 U.S. 510 (1925). Obtained online at: [http://www.michaelariens.com/ConLaw/cases/pierce.htm].

60 The entire point of a UETC program, or of any policy mechanism for promoting universal access to market education, is to treat parents in a special wayÑi.e., for other taxpayers to make it easier for them to pay for their children’s education. Under a UETC program, parents can take a personal-use credit against the cost of their own children’s education whereas non-parents must use donation credits for the benefit of other people’s children. Nevertheless, the two different sorts of credits can have the same value, so that, at least from the standpoint of credit size, parents and non-parents are treated equivalently.

61 Public Agenda, “On Thin Ice,” report on public poll findings, November 1999. Obtained online at: [http://www.publicagenda.org/specials/vouchers/voucherfinding1.htm].

62 These data were compiled by Joseph G. Lehman, of the Mackinac Center for Public Policy. Note that the sources disagree on whether the Colorado tax credit plan received 41 or 40 percent of the popular vote, but 41 percent is the modal figure. The data were drawn from the following sources:

Robert C. Johnston, “Status Quo Prevails on State Ballots,” Education Week, November 11, 1998. Obtained online at: [http://www.edweek.org/ew/vol-18/11init.h18].

And: People for the American Way Foundation, “History of Failed Vouchers and Tax Credits: Voucher Referenda,” undated report. Obtained online at: [http://www.pfaw.org/pfaw/general/default.aspx?oid=2969].

And: People for the American Way Foundation, “History of Failed Vouchers and Tax Credits: Tax Credit Referenda,” undated report. Obtained online at: [http://www.pfaw.org/pfaw/general/default.aspx?oid=2970].

And: Amy K. Frantz, “Initiative [sic] and Referendum [sic] in the States,” Limits On Power and the Use of Power, vol. 3, no. 4, December 1998, p. 6. Obtained online at: [http://www.limitedgovernment.org/publications/pubs/limits/limdec98.pdf].

63 George A. Clowes, “Hope Tax Credits Bring Increased Regulation,” School Reform News, March 1, 2002. Obtained online at: [http://www.heartland.org/Article.cfm?artId=4].

64 Unless they are the only avenue. In Michigan, for example, the only way to expand school choice is by a vote of the people. Michigan’s constitution expressly prohibits any form of voucher or education tax credit, making a constitutional amendment necessary, and in Michigan, constitutional amendments require a vote of the people. Thanks to Lawrence Reed and Joseph Lehman of the Mackinac Center for Public Policy for this observation.

65 The surveyed states were: Arkansas, Indiana, Florida, Louisiana, Maine, Maryland, Michigan, Nebraska, Nevada, and Wisconsin. The survey was performed by Basswood Research of Washington, DC. To inquire about the detailed results, please contact the Mackinac Center for Public Policy at: [www.Mackinac.org].

66 The questions were as follows:

- Would you support or oppose giving Arkansas taxpayers an individual income tax credit for contributions to scholarship funds that help parents send their children to the public, private, or religious school of their choice?

- Would you support or oppose giving local businesses a state corporate income tax credit for charitable contributions to scholarship funds that help parents send their children to the public, private, or religious school of their choice?

- Would you prefer that all students in all public schools be eligible to receive the tax-credit scholarship funds, or would you prefer that tax-credit scholarship funds only go to low-income students in poorly performing schools?

- Would you support or oppose education vouchers, which provide parents with state funds that they can use to help pay the costs at the school of their choice?

- Would you support or oppose education vouchers, which provide parents with state funds that they can use to help pay the costs at the school of their choice, if only low-income students in poorly performing schools were eligible to receive the vouchers?

67 Respondents were not asked about personal use tax credits.

68 Zelman V. Simmons-Harris (00-1751) 234 F.3d 945, reversed. Obtained online at: [http://supct.law.cornell.edu/supct/html/00-1751.ZS.html].

69 Joan Biskupic, “Maine School Voucher Law Stands,” The Washington Post, October 13, 1999, p. A2. Obtained online at: [http://www.washingtonpost.com/wp-srv/national/longterm/supcourt/ stories/court101399.htm]. And:

            David M. Ackerman, “Education Vouchers: Constitutional Issues and Cases,” Congressional Research Service, CRS Report for Congress no. RL30165, November 15, 2001. Obtained online at: [http://carper.senate.gov/acrobat%20files/rl30165.pdf].

70 Ackerman, “Education Vouchers: Constitutional Issues and Cases.”

71 Jackson v. Benson, 218 Wis.2d 835, 578 N.W.2d 602. Obtained online at: [http://www.courts.state.wi.us/html/sc/97/97-0270.HTM].

72 Justice Steinmetz wrote for the court that they chose not to consider whether taxpayers were compelled to support religious practices under the voucher program because they had already considered another clause prohibiting state funding programs that benefit religious institutions.

73 Richard Komer and Clint Bolick, “School Choice: The Next Step, The State Constitutional Challenge,” Institute for Justice website editorial, July 1, 2002. Obtained online at: [http://www.ij.org/editorial/choice_next.shtml].

74 The Associated Press, “Lawmakers say some school districts balking at vouchers,” The Associated Press, November 11, 2003. Obtained online at: [http://www.schoolchoiceinfo.org/news/index.cfm?action=detail&news_id=651].

75 Locke, Governor Of Washington, Et Al. V. Davey, certiorari to the united states court of appeals for the ninth circuit, No. 02-1315. Argued December 2, 2003--Decided February 25, 2004. Available online at: [http://caselaw.lp.findlaw.com/scripts/ getcase.pl?court=US&vol=000 &invol=02-1315].

76 PFAW Foundation, “Supreme Court Upholds State Religious Liberty Provisions,” press release, February 25, 2004. Obtained online at: [http://www.pfaw.org/pfaw/general/ default.aspx?oID=14069].

77 Quote in: Melanie Hunter, “Supreme Court Overturns Religious Discrimination Ruling,” CNSNews.com (Cybercast News Service), February 25, 2004. Obtained online at: [http://www.cnsnews.com/ViewCulture.asp?Page=\Culture\archive\200402\CUL20040225d.html].

78 Emphasis added. See note 73 for Locke v. Davey decision citation.

79 Kotterman v. Killian, Arizona Supreme Court, No. CV-97-0412-SA. Obtained online at: [http://www.supreme.state.az.us/opin/pdf99/cv970412.pdf]. That ruling read, in part, as follows:

30 Petitioners argue that this tax credit channels public money to private and sectarian schools in violation of the state constitution. Specifically, they charge that the law offends article II, ¤ 12 and article IX, ¤ 10 (the “religion clauses”), as well as article IX, ¤ 7 (the “anti-gift clause”)...

32 Article II, ¤ 12 states in part: “No public money or property shall be appropriated for or applied to any religious worship, exercise, or instruction, or to the support of any religious establishment.” Article IX, ¤ 10 says, “No tax shall be laid or appropriation of public money made in aid of any church, or private or sectarian school, or any public service corporation ...”

33 The parties are in considerable disagreement over the meaning of “public money or property.” No definition of these words appears in the Arizona Constitution or in our statutes. We must therefore look to their “natural, obvious and ordinary meaning. . . .” [Author’s note: Paragraphs 34 and 35 of the decision list numerous court cases that define the term public money. By these definitions, the taxcredit in question did not constitute public money. The court then continued:]

36 According to Black’s Law Dictionary, “public money” is “[r]evenue received from federal, state, and local governments from taxes, fees, fines, etc.” Black’s Law Dictionary 1005 (6th ed. 1990). As respondents note, however, no money ever enters the state’s control as a result of this tax credit. Nothing is deposited in the state treasury or other accounts under the management

80 Clive R. Belfield and Amy L. Wooten, “Education Tax Credits for America’s Schools,” National Center for the Study of Privatization in Education, NCSPE Policy Briefing #3, February 2003. Obtained online at: [http://www.ncspe.org/publications_files/PB03.pdf].

81 John Humphreys, “Funding School Choice: Vouchers or Tax Credits: A Response to Buckingham,” Policy (Australia), Autumn 2002. Obtained online at: [http://www.cis.org.au/Policy/aut2002/polaut02-3.htm].

82 Stephen Hegarty, “Education commissioner concedes voucher failings,” St. Petersburg Times, November 19, 2003. Obtained online at: [http://www.sptimes.com/2003/11/19/State/Education_commissione.shtml]. And:

“Come fall, the heat is off,” St. Petersburg Times, editorial, November 6, 2003. Obtained online at: [http://www.sptimes.com/2003/11/06/Opinion/Come_fall__the_heat_i.shtml].

83 Kimberly Miller, “Money To Terror-Tied School Halted,” Palm Beach Post, July 19, 2003. Obtained online at: [http://www.palmbeachpost.com/news/content/ news/vouchers0719a.html].

84 No by-line, “Education: Steady state,” The Milwaukee Journal Sentinel, July 26, 2001. Obtained online at: [http://www.jsonline.com/news/editorials/ jul01/schools-edit072601.asp].

85 Humphreys, “Funding School Choice: Vouchers or Tax Credits: A Response to Buckingham.”

86 For a discussion of all these cases except India, see: Coulson, Market Education. For a survey of the relevant evidence from modern developing countries, including India, see:

            Coulson, “How Markets Affect Quality.”

87 Duraisamy, P., Estelle James, Julia Lane, and Jee-Peng Tan (Undated). “Is There A Quantity-Quality Trade-Off As Enrollments Increase? Evidence from Tamil Nadu, India,” World Bank research report, ([undated], late 1990s?). Available on-line at: [http://www.worldbank.org/html/dec/Publications/Workpapers/WPS1700series/wps1768/wps1768.pdf].

88 Andrew J. Coulson, Market Education: The Unknown History (New Brunswick, NJ: Transaction Books, 1999), p. 110-111.

89 Herbert J. Walberg and William J. Fowler, Jr., “Expenditure and Size Efficiencies of Public School Districts,” research report, 1986, ERIC document no. ED274471.

90 Coulson, “How Markets Affect Quality.”

91 Performance-based grouping means assigning students to classes based on what they know and can do, rather than on their physical age. Under performance based-grouping, children who have mastered arithmetic, for example, can immediately proceed to the study of algebra, regardless of their age. See: Coulson, Market Education, p. 359-362.

92 Estelle James, Elizabeth M. King, and Ace Suryadi, “Finance, Management, and Costs of Public and Private Schools in Indonesia,” Economics of Education Review, vol. 15 (1996), no. 4, pp. 387-398.

93 Walberg and Bast, Education and Capitalism, p. 289.

94 Joseph L. Bast, “Why Conservatives and Libertarians Should Support School Vouchers,” The Independent Review, vol. 7, no. 2 (Fall 2002), p. 269. Obtained online at: [http://www.independent.org/tii/content/pubs/review/tir72_bast.html]. Emphasis added.

95 Martin Carnoy and Patrick J. McEwan, “The Effectiveness and Efficiency of Private Schools in Chile’s Voucher System,” World Bank Report, 1999. Obtained online at: [http://www.worldbank.org/education/economicsed/tools/seminars/92999.doc].

96 Lydia G. Segal, Battling Corruption in America’s Public Schools (Boston: Northeastern University Press, 2004).

97 Coulson, Market Education, p. 211-214.

98 S.V. Date, “Bush aides considered fabricating voucher explanations,” Palm Beach Post, November 12, 2003.

99 Komer and Bolick, “School Choice: The Next Step, The State Constitutional Challenge.”

100 Elizabeth Clarke, “High school senior came ‘out’ - and was expelled,” Palm Beach Post, October 25, 2003.

101 Under an education tax credit program, citizens and businesses are still taxed if they choose not to make a donation to an SGO or to send their children to a private school (and hence claim a credit). There is thus still a degree of compulsion in the funding of education, though it is a less confining and morally tendentious one.

102 Walberg and Bast, Education and Capitalism.

103 [no author], “Misplaying the Angles: A Closer Look at the Illinois Tuition Tax Credit Law,” People for the American Way (PFAW) report, September 17, 2002. According to this report, the data on tax credit usage by income bracket were provided by the Illinois Department of Revenue. Obtained online at: [http://www.pfaw.org/pfaw/dfiles/file_146.pdf].

104 G. Scott Thomas, “Property tax analysis puts Dayton mid-range,” Dayton Business Journal, March 31, 2003. Obtained online at: [http://www.bizjournals.com/dayton/stories/2003/03/31/story7.html].

105 Snyder, “Digest of Education Statistics, 2002,” table 61, p. 73.

106 Judith C. Cambria, “New Jersey’s Patchwork Property Tax Relief: How to Make A Bad System Better,” New Jersey Policy Perspective (state think tank), 2000. Obtained online at: [http://www.njpp.org/archives/cambria_proptax.html].

107 U.S. Bureau of the Census “Average Number of Children Per Family and Per Family With Children, by State: 2000 Census,” Table ST-F1-2000 of Census 2000 Summary File 1 (SF 1), released online June 12, 2003. Obtained online at: [http://www.census.gov/population/socdemo/hh-fam/tabST-F1-2000.pdf].

108 Computed from table data in: [No author], “State Government Tax Collections by Type of Tax: Fiscal Years 1991Ð 2001,” the Tax Foundation, 2003. Obtained online at: [http://www.taxfoundation.org/collectionsbytype10years.html].

109 Sheila Boughner-Blair, “Children’s Scholarship Fund established in Clarion,” The Derrick (Pennsylvania newspaper), October 26, 2003. Obtained online at: [http://www.thederrick.com/stories/10272003-1008.shtml].

110 David Brunori, “Vouchers Masquerading as Tax Credits,” State Tax Notes, undated. Obtained online at: http://www.taxanalysts.com/www/readingsintaxpolicy.nsf/0/8B09336E11A5E89585256B8200802569?OpenDocument].

111 Some proponents of a flat-rate income tax oppose tuition tax credits because they view them as a corruption of the tax code. A full discussion is outside the scope of this paper, but tuition tax credits are uniquely distinguished from other tax credits (e.g. child tax credits, solar panel tax credits) in at least two ways. First, the education marketplace, unlike other marketplaces, is dominated by a government-run school monopoly. Second, education is, unlike the subjects of other tax credits, a compulsory activity. Not only must everyone fund the public school system, everyone is subject to compulsory attendance laws. Because few, if any, other types of tax credits will share these features, flat-tax proponents need not fear that tuition tax credits will create a “slippery slope” toward a proliferation of other tax credits. Thank you to Lawrence Reed and Joseph Lehman, of the Mackinac Center for Public Policy, for this observation.

112 Coulson, Market Education, p. 21.

113 Thanks to Eric O’Keefe of the Lead Foundation for suggesting this point.

114 Associated Press, “Gov. Mark Sanford speaks to South Carolina,” Associated Press, January 22, 2004. Obtained online at: [http://www.wistv.com/Global/story.asp?S=1611222 &nav=0RaPKL7M].