Michigan families suffered through prolonged school closings and lockdowns that were enacted in response to the COVID-19 pandemic. Most students lost ground academically, especially in mathematics, because of the forced transition to remote instruction, which took an even harder toll on students from disadvantaged groups. With school districts unable to provide reliable, in-person learning environments, thousands of Michigan families sought alternatives in the 2020-21 school year. Families with means to pay enrolled in private schools that provided safe, consistent and effective in-person education. Many families refrained from enrolling their children in kindergarten in fall 2020. These and many others took the plunge into homeschooling their children themselves. They did so without any public support, despite the desperate measures many took to provide a steady learning environment for their children.
Michigan ranks 10th nationally on the latest Education Freedom Index, buoyed in particular by its relatively high degree of homeschooling freedom and access to quality charter school options. The state also finished above the national median for enabling families to access public school districts beyond the borders of the district where they happen to live. Nearly 350,000 Michigan public school students, or one in four, attend either public charter schools or exercise inter-district choice.
While these options benefit many students, parental demand for schooling alternatives still outweighs the supply offered. For instance, a survey found that one-third of Michigan school parents would prefer to send their children to a private school, but only 10% do, as reported for the 2017-18 academic year. Michigan stands in a shrinking minority of states that provide no public support for parents to choose private educational options. The state is increasingly out of step with other states that help parents access private schooling options, policies that have a clear record of success.[*]
A key factor causing Michigan to lag most other states, including all its neighbors in the Great Lakes region, is a uniquely modern but restrictive provision embedded in the state constitution. Adopted through a 1970 ballot initiative, the “anti-parochiaid” amendment forbids both direct and indirect financial aid to private schools — explicitly barring any “payment, credit, tax benefit, exemption or deductions, tuition voucher, subsidy, grant or loan of public monies or property.” While the constitutionality of this provision remains in question, Michigan’s prohibition on supporting private education remains in place. But a recent string of U.S. Supreme Court rulings that have advanced religious liberty and educational choice, including the 2020 case Espinoza v. Montana Dept. of Revenue, offers Michigan families renewed hope.
The state of public opinion is similarly encouraging. Frustration with pandemic school policies has spurred parents to seek further options, and voters have grown more sympathetic to their plight. A fall 2020 Mackinac Center survey found that 67% of Michigan voters favored repealing the constitutional ban on private school aid so the state could provide private tuition scholarships to disadvantaged students, including those who have special needs, are in foster care or have been bullied. More recently, EdChoice reports that 66% of Michigan voters, including 74% of K-12 parents, favor giving parents “a government-authorized savings account with restricted, but multiple uses for educational purposes,” including private school tuition.
Recognizing the trend of growing support, the Michigan Legislature passed legislation in October 2021 to create the Student Opportunity Scholarship Program. The proposal was designed to give thousands of families across the state more spending power to help meet their children’s educational needs.[†] On Nov. 5, however, Gov. Gretchen Whitmer vetoed the legislation. In response, a citizen group organized to collect petition signatures for the purpose of initiating the same legislation and enacting the program. If enough signatures are gathered, the citizen-led initiative, dubbed Let MI Kids Learn, will be decided in 2022 in one of two ways. The Legislature could pass the legislation again and it would become law without the need for the governor’s approval. Otherwise, the initiative will be on the ballot in the 2022 general election and decided by voters.
The basic features of the Student Opportunity Scholarship Program are:
- State-regulated and qualified nonprofit organizations would be eligible to receive donations from Michigan taxpayers to fund scholarship accounts for eligible families and children.
- Taxpayers donating to these accounts would receive a dollar-for-dollar tax credit against the state taxes they owe.
- Total state tax credits used for the program would be limited to $500 million.
- Most Michigan students would be eligible for accounts, including all low-income families and children with disabilities.[‡]
- Accounts could be used to pay for a wide variety of education expenses, including private school tuition, tutoring, dual enrollment and AP courses, after-school programs, special-needs therapy, career counseling and training, and education-related transportation.
- Eligible students who remain enrolled in public schools could qualify for up to $500 per year, or $1,100 for students with disabilities.
- Students not supported by state funding for public schools, such as those enrolled in private schools or providing at-home instruction, would have their accounts funded up to 90% of the state’s K-12 foundation allowance, or about $7,800.
This paper unpacks this education savings account program proposed for Michigan. It puts the proposal in the context of similar efforts in other states to support families’ private education choices. The tax credit funding mechanism aligns with what many other states use, but Michigan’s plan would stand among the broadest in terms of student eligibility and qualified uses of funds. Effective oversight of parent-directed account funds can draw from the approaches other states have taken.
At its core, though, this paper mainly analyzes the fiscal impacts of adopting the Student Opportunity Scholarship plan. Opponents have alleged dire outcomes. But a careful look at the proposal’s details reveals a minor effect on state and local school budgets, with a significant possibility of positive fiscal impacts on a per-student basis.
[*] More than 30 states have enacted voucher, tuition tax credit and/or education savings account legislation. See “School Choice in America Dashboard” (EdChoice, 2022), https://perma.cc/8GQW-V9AN. Of 175 gold-standard research studies on the impacts of private school choice programs, measurable positive impacts outpace measurable negative impacts by more than 12 to one. See “The 123s of School Choice” (EdChoice, April 1, 2022), https://perma.cc/8BLH-88XE.
[†] Two separate but identical versions of the legislative package were passed in late October 2021: House Bills 5404 and 5405, and Senate Bills 687 and 688.
[‡] A child with a disability is defined as in the federal Individuals with Disabilities Education Act, 20 U.S.C.A. § 1401(3). It includes intellectual disabilities, hearing impairments, speech or language impairments, visual impairments, serious emotional disturbance, orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities. See “Section 1401” (U.S. Department of Education, Nov. 7, 2019), https://perma.cc/BRG3-WWX4.