Private K-12 scholarships: a viable alternative for Detroit’s school children

According to news reports, the Detroit public school district may have illegally spent more than a quarter of a billion dollars of business property taxes that it had no right to collect. To even begin to repay that money, the district would likely have to levy a new tax on all taxpayers, including the ones it allegedly overtaxed in the first place. That’s not just robbing Peter to pay Paul. It’s robbing Peter and Paul to pay Paul.

To those who have watched in despair as every effort to turn the district around has ended in Shakespearian tragedy, I offer this proverb: When the horse you’re riding is dead, get off.

The Detroit district is a dead horse.

This sounds harsh, but imagine for a moment that Michigan’s 2000 school voucher initiative had passed, operated smoothly for five years — and was suddenly found to have perpetrated this quarter-billion-dollar fiasco. The program would have been killed.

But after a decade of fiscal mismanagement that has made the Prodigal Son look like Warren Buffett, the Detroit public school system may once again get a pass from voters and community leaders. There will naturally be some token beating of this obviously dead horse; some jangling of its reins; some topping-up of its feed bag. But few will suggest getting off.

There are other horses in the stable. If Michigan were to pass a strong parental choice program, such as the education tax credits proposed by the Mackinac Center and others, independent schools would emerge within reach of every family. But that would take time. When children’s futures are on the line, impatience is a virtue.

Fortunately, there is an immediate alternative: a full-scale, privately financed scholarship program for the children of Detroit. Businesses, foundations and individuals can contribute to a fund that provides private school tuition assistance to every family in the city who needs it.

Michigan is already home to at least four nonprofit private scholarship programs, so we don’t have to reinvent the wheel. Among these are a Detroit chapter of the national Children’s Scholarship Fund, managed by the Catholic Archdiocese (but not restricted to its own schools), and the Grand Rapids-based Education Freedom Fund, which now serves children primarily outside of Detroit. Both programs are heavily oversubscribed, currently having between two and four times as many applicants as scholarships. Either or both of these programs could be radically expanded to serve all of Detroit, or they could be used as models for a new, independent organization.

The advantages of this approach are obvious: instant results, no politics, no red tape. But could enough money be raised to make a real difference?

As of 2002, Michigan nonprofits were spending $28 billion annually, 95 percent of which remained within the state. Michigan’s foundations alone made annual grants of $1.2 billion. If the private scholarships were capped at the lower of $3,000 or 75 percent of tuition, roughly $440 million would be required to award a scholarship to every single DPS student. Even with higher caps, it is feasible.

A well-funded Detroit scholarship program would not only create the most vibrant and responsive education marketplace in the nation, but also have the likely benefit of lowering taxes — both features that would attract new jobs and businesses to the state. The tax benefit would accrue from the fact that the state government finances school districts based largely on their enrollment. If a well-funded Detroit scholarship program were a success with parents — as it almost certainly would be — students would voluntarily migrate out of the DPS and into private-sector schools, reducing the school district’s budget and its seemingly insatiable appetite for tax dollars.

The only thing standing in the way of this solution is our blinkered vision of what public education must look like. State-run schooling has been around for so long that few people can imagine anything taking its place, no matter how bad it gets. We have even lost sight of the distinction between the institution itself and the mission it is meant to fulfill, confusing one particular means — the current education monopoly — with our ultimate end: ensuring that all of Detroit’s children are prepared for success in private life and participation in public life.

Because of that confusion, we are unnecessarily sacrificing generation after generation of this city’s children to a system that is nearly bankrupt in every sense of the word. But Detroit doesn’t have to keep its children shackled to the remains of the public school system. There is a better option. All you have to do to make it happen is pick up the phone and donate to a scholarship fund. I have.

Andrew J. Coulson is director of the Center for Educational Freedom at the Cato Institute in Washington, D.C.