The Case for School Choice

Prepared for the Revenue & Taxation Committee, Oklahoma House of Representatives

On Nov. 5, Mackinac Center Director of Education Policy Matthew Brouillette delivered expert testimony before the Oklahoma House of Representatives's Revenue and Taxation Committee on the issue of increasing school choice in that state.  The following is a transcript of his testimony.

Thank you Rep. Calvey and the Revenue and Taxation Committee for the opportunity to speak with you about the issue of school choice—that is, the right, freedom, and ability of parents to choose the safest and best schools for their children. 

Across the nation, the school choice debate has shifted from "should we give children more educational options" to "how much" and "how."  The fact is that choice is here to stay.  I doubt we will ever go back to the "assignment system" whereby children are assigned to a particular school based on where they live.  The positive effects of school choice are simply just too powerful to deny. 

Today, over 2,000 charter schools are operating in 34 states and the District of Columbia, serving over 500,000 students.  More than 50,000 low-income children are using privately funded scholarships to attend private and parochial schools.  And another 12,000 students are using publicly funded vouchers. 

Yet despite the overwhelming demand for more school choice, many citizens remain skeptical.  They fear that choice will somehow hurt rather than improve public education. 

So, in order to better understand why school choice should be embraced instead of feared, it will be instructive for us to review both the history and purpose of public education.

First of all, let's define an important concept: Public Education.  Today, the concept of public education has been turned on its head.  What used to mean "education of the public" through diverse means has become synonymous with the direct governmental sponsorship, operation, and control of schooling. 

It hasn't always been this way.  For the first 150 years of America's settlement and the first 50 to 75 years of our nation's existence, public education was achieved through independent, church-related, community-sponsored schools.  These schools were in essence what are today called private schools. 

Yet despite an extremely decentralized system of schools, the early American public was exceptionally educated.  All children, including the poor, had access to diverse educational opportunities. 

But in 1841, Horrace Mann, the leader of the government school movement in Massachusetts, promised that if we "Let the common school be expanded to its capabilities, let it be worked with the efficiency of which it is susceptible, and nine tenths of the crimes in the penal code would become obsolete; the long catalogue of human ills will be abridged."  While Mann's promise has yet to be realized, he was successful in establishing the foundation for government-sponsored education. 

Today, nearly 90 percent of American children attend government-sponsored schools.  In most states, parents who desire a religious or nongovernment education for their children are financially penalized.  They must pay taxes for schools they don't use and pay again in tuition at schools that are actually educating their children.   

It is unfortunate that the goal of an educated public has given way to the establishment and protection of a monolithic, "one best system" that is financed, operated, and controlled by the government.  Although there are many high-performing public schools, all schools cannot be all things to all students.  The facts are that children fall through the cracks even in our best public schools. 

Just as one-size-fits-all shoes will not fit all children's feet, neither will one-size-fits-all schools fit all children's learning needs.  This is why we must return to the original concept of public education.  That is, the education of the public through diverse means.  

Every child must have the option to choose a school that will best meet his or her needs—whether it is a traditional public, charter, private, religious, or home school.  The promise of public education will only be fulfilled if we return to parents that right, freedom, and ability to choose the best and safest schools for their children. 

Now, some people will ask: "Why don't we just `fix' the public schools?"  Or they say "If we just `fixed' our public schools then we wouldn't need school choice." 

To understand how school choice is the key to fixing our public schools, it is important to recognize that there are only three basic ways to reform our schools.  Every reform that has ever been tried—or will ever be tried—fits into one of these three categories: Rules, Resources, or Incentives. 

Rule-based reforms seek to change education policies, such as a longer school day, mandated student testing, state-approved curriculum, better teacher tenure law, and so on.  Advocates of these types of reforms believe that we just need the "right" laws or policies to improve our schools.  Although these types of reforms have been tried extensively, they have failed to significantly improve public education. 

Resource-based reforms seek to provide greater resources, such as more money, newer textbooks, more Internet access, updated facilities, more teachers, and so on.  Advocates of these types of reforms believe that the lack of money is what prevents "real" reform from occurring in our schools.  However, real spending on K-12 education has nearly tripled in the last 40 years with very little to show for it. 

Now, rules and resources are very important issues to deal with in education, and there is room for improvement with each.  However, these methods fail to answer a basic question: Why do we see a relentless drive for continuous quality improvement in nearly every other sector of our economy except public education? 

The answer is incentives .  Our public schools lack the incentives necessary for the kind of educational improvement we expect and our children deserve.  School choice is the key incentive for improving all schools.  By empowering parents to become active education consumers, schools will themselves adopt effective rules and wisely allocate resources to provide the best educational services.  

The reason we haven't seen dramatic improvements in our public schools is because we have failed to implement the proper incentives.

Albert Shanker, the former president of the American Federation of Teachers, recognized that incentives matter.  Although he was hardly a proponent of school choice, he did say

It's time to admit that public education operates like a planned economy, a bureaucratic system in which everybody's role is spelled out in advance and there are few incentives for innovation and productivity.  It's no surprise that our school system doesn't improve: It more resembles the communist economy than our own market economy.

Unfortunately, Shanker and the school employee labor unions have never taken this assessment to heart and they continue to fight efforts to expand choice.

Yet despite their adamant opposition, incentives in the form of charter schools, private scholarships, and public vouchers have been implemented across the nation.

Although these incentive-based reforms are extremely limited, their impact on public education over the past decade has been significant.

The evidence on school choice suggests that both children and schools are positively impacted by incentive-based reform. 

First of all, it's important to note that no research has found that children have been harmed because they have been given more school choices.  In fact, most evidence reveals that choice improves academic performance, helps low-income families, and improves public schools.

Here are just a few examples from the past year or so.

A 2000 Harvard University study of students who received privately funded scholarships in New York, Dayton, and the District of Columbia found that African-American children improved in math and reading test scores by 6.3 percentile points relative to their public school peers after two years.

A Hoover Institution evaluation of the Milwaukee voucher program found that the test scores for students exercising choice had significantly improved from 1997 to 2000, outscoring students in the rest of the state.

A Western Michigan University study of students in Pennsylvania's charter public schools found they had made gains on state assessments of more than 100 points after just two years, and outscored students in the other schools in their districts by 86 points. The 2000 study found that the charter schools were smaller and served more at-risk and minority students than did the traditional public schools.

A 2001 Arizona study showed that charter school students make an average of one more month of academic gain per year than similar district school students. 

School choice also improves public schools.  A 2001 study by Harvard University economist Caroline Hoxby found that Milwaukee's public elementary schools have improved as a result of the voucher program.

Charter schools are also proving that traditional public schools respond to increase choice and competition.  Where charter schools have started, many public schools have begun surveying parents for customer satisfaction, implementing new programs, guaranteeing results, and better communicating their performance.

In general, the evidence suggests that school choice has positively impacted both children and schools. 

So, given what we understand about the importance of incentives and that choice is beneficial, how should we expand choice?

The two primary policy vehicles for expanding school choice to include all schools in the education of the public are vouchers and tax credits.

Vouchers are simply direct payments from the government to individuals to enable them to purchase educational services.  Common examples of voucher-type plans operating today include scholarships for higher education, such as Pell grants, and food stamps, which enable recipients to use government funds to purchase food at a grocery store of their choice.  Vouchers are distinguished from direct government provision of services because voucher recipients choose which service to patronize from among a range of providers—government and private.

Tax credits are simply a dollar for dollar reduction in taxes owed for educational expenditures.  There is no governmental redistribution of funding—taxpayers just keep more of their own money to spend on education.

Although vouchers would be a significant improvement over the "assignment system" and would expand choices for children, there are some serious problems and concerns with them.

Traditional tax credits also have their limitations and problems. The primary weakness is that they fail to provide access to nongovernment schools for low-income and many middle-income families.  These families simply do not have enough income tax liability to take advantage of a credit. 

Minnesota and Illinois have traditional tax credits for education.  But Florida and Pennsylvania have recently adopted scholarship tax credit programs, and Arizona has been operating one since 1997.  These programs allow taxpayers to receive credits for contributions to scholarship organizations. 

But the best way to expand parental choice in education is through a policy proposal called a "Universal Education Credit."  This concept comes from a 1997 Mackinac Center proposal called the Universal Tuition Tax Credit.

The primary features of Universal Education Credits are these:

  1. A dollar-for-dollar tax credit for tuition paid to any elementary or secondary school—government or private.  This is not a deduction against gross income but a dollar-for-dollar reduction in taxes owed.

  1. A credit that may be claimed by any taxpayer—individual or corporate, including a student's parents as well as relatives, friends, neighbors, or businesses.  The universality of this approach is what will provide all children, regardless of family income, access to better schools through privately funded scholarships.

  1. The creation of foundations and organizations that will collect funds and distribute scholarships to children from families who lack adequate tax liability to claim a credit.  The scholarship component is key for providing access to better schools for low-income children.

  1. The amount of the credit is limited to a percentage of the state's per-pupil expenditure and it is phased-in.  This allows the program to be either revenue neutral, generate a savings to the state, or to increase the per-pupil expenditures in the public schools.

The Mackinac Center proposal was crafted with credit limits set at one-half what the state spends per student.  The plan would be phased-in over 9 years and would generate a savings to the state of over $3 billion in the first 10 years and over $500 million each year thereafter.

Of course the variations to universal education credits are many, and will have to be adapted according to the unique structures in individual states.

In conclusion, if policy makers and concerned citizens are truly committed to public education—that is, the education of the public—then they will embrace school choice in all its forms.  Although I would argue that the universal education credit is the best policy proposal for expanding school choice, the moral imperative is that we act quickly to introduce proper incentives and return to parents the right, freedom, and ability to select the school that best meets the needs of their children. 

Thank you and I am happy to answer your questions.

"Just as one-size-fits-all shoes will not fit all children's feet, neither will one-size-fits-all schools fit all children's learning needs. This is why we must return to the original concept of public education. That is, the education of the public through diverse means."