On March 26, the Indiana Supreme Court issued a unanimous opinion holding that the state’s Choice Scholarship Program is constitutional. Indiana’s voucher program is one of the most expansive school choice reforms in the country, permitting any child eligible for free or reduced-price lunch to receive a voucher to attend a private school―whether or not the school is religious. The Choice Scholarship Program is only two years old, but already 9,324 low- and middle-income families are participating.
A group of state taxpayers funded by a teachers’ union filed suit against the program in May 2011. Meredith v. Daniels alleged that the voucher program violates the IndianaConstitution, which requires the state “to provide, by law, for a general and uniform system of Common Schools.” The plaintiffs claimed that allowing students to choose a private school violated this duty. (A similar argument overturned Florida’s opportunity scholarship program in 2006.) However, the Indiana Supreme Court rejected this argument, noting that it was inconsistent with the plain text of the state’s constitution.
The plaintiffs also alleged that the voucher program violated the state constitution’s provision forbidding the state from compelling individuals to support “any place of worship” or “ministry,” and another provision forbidding the state from drawing money from the treasury for the benefit of a religious or theological institution.* (However, the U.S. Supreme Court ruled in Zelman v. Simmons-Harris in 2002 that Ohio’s voucher program does not violate the establishment clause in the U.S. Constitution, undercutting the argument that institutions, rather than parents, are the primary beneficiaries.)
The Indiana Supreme Court rejected the “religious support” arguments, noting that government expenditures frequently benefit religious institutions. “[F]or example, fire and police protection, municipal water and sewage service” all benefit religious institutions:
“Certainly religious or theological institutions may derive relatively substantial benefits from such municipal services. But the primary beneficiary is the public, both the public affiliated with the religious or theological institution, and the general public.”
The court explained that such benefits were ancillary to the substantial benefits received by families:
“The direct beneficiaries under the voucher program are the families of eligible students and not the schools selected by the parents for their children to attend. The voucher program does not directly fund religious activities because no funds may be dispersed to any program eligible school without the private, independent selection by the parents of a program-eligible student. Participation in the voucher program is entirely voluntary for parents of eligible students.”
The Indiana Supreme Court’s interpretation of its state constitution in favor of parents’ directing their children’s education should encourage families in other states across the country. Vouchers, education tax credits, and opportunity scholarship programs have demonstrated repeatedly that children benefit from educational choice. Oregon has some limited forms of school choice, including over 100 charter schools and open enrollment among some public schools; but Oregon parents still deserve better. Hopefully, victories like Indiana’s will provide support for states like Oregon to recognize the right of parents to choose options for their children beyond their local public school.
* Oregon’s constitution has a nearly identical provision, stating: “No money shall be drawn from the Treasury for the benefit of any religeous [sic], or theological institution.” Anti-school-choice groups in Oregon have used the same arguments against proposals for voucher or tax credit funded scholarship programs.
Christina Martin is an attorney with Pacific Legal Foundation, a nonprofit legal foundation devoted to litigating for freedom, property rights, and individual rights, including school choice. She is a former policy analyst for Cascade Policy Institute, Oregon’s free market public policy research center.
The 2012-2013 school year will be the first year that the new statewide open enrollment law takes effect. The new law (HB 3681) allows Oregon parents to enroll their kids in any Oregon public school district, as long as the receiving district is accepting transfers. This will stop local districts from holding students captive to their local school, as currently often happens throughout the state.
This is an exciting opportunity for families who live in a district that doesn’t meet their kids’ individual needs. Though such families already can choose public charter schools, many charter schools have long waiting lists, and district-created obstacles make it hard for existing or new charter schools to meet that need. Opening district boundaries will allow regular public schools to better meet more children’s needs.
Some district leaders have made apocalyptic predictions that this will shatter those public schools that are already struggling financially. They claim that those districts that experience a significant exodus will consequently struggle even more at providing remaining students with a quality education.
This is a red herring – the same one that has been used to oppose public charter schools. The truth is that only state funds will follow a student into neighboring districts under this open enrollment law (not local funds), allowing the district to spend more per remaining student.
After decades of increasing funding in Oregon, we spent an average of about $10,500 per public student in the 2009-2010 school year according to the NEA’s Rankings & Estimates, which doesn’t include the additional $1,000 per student spent on debt service. That is significantly greater than just 20 years ago. And yet, the outcome has not improved.
A similar story can be found across our nation. Throwing money at the problem is not working. Developed countries that spend significantly less than the United States are outperforming us – countries like New Zealand and Finland.
None of this is surprising to those who understand how markets (and politics) work. Public schools are usually monopolies with a captive consumer base – assigned students and funds based on where a child lives, not on the merits of the school.
For comparison, imagine if food stamp recipients were only allowed to shop at a locally assigned grocery store – a store dedicated solely to Oregon Trail card purchases. It’s no mystery in the marketplace that monopolies typically provide worse service at higher prices. The open enrollment law, by analogy, is the equivalent of allowing food stamp recipients to shop at any of the hypothetical Oregon Trail assigned grocery stores, not just the closest one to their residence. Universal school choice (allowing funds to follow a student to any school, public or private) would be the equivalent of how food stamp holders currently use their Oregon Trail cards – that is, shopping at virtually any type of grocery store.
As charter schools and voucher programs across the nation have witnessed, the kids who benefit most from increased educational options are those who currently have the fewest: low-income and middle-class students.
To take advantage of Oregon’s new open enrollment law, parents must alert the district to which they want their child to transfer by April 1, giving districts ample time to plan for changes in enrollment. As kids benefit from this new law, we will all see that this law is no apocalypse for education – although it could be the beginning of the end of monopoly control over the education of Oregon children.
WHAT THE LAW DOES
The new statewide open enrollment law will take effect in the 2012–2013 school year. The new law allows Oregon parents to enroll their kids in any Oregon public school district, as long as the receiving district is accepting transfers. No longer will the student’s resident school district be able to block a student’s transfer to another district. Families who live inside a district that decides to accept transfers will get first priority to transfer their children to other in-district schools. Siblings of students who are considered residents of the district will get second priority.
HOW CAN YOU TAKE ADVANTAGE OF THIS NEW LAW?
Districts will announce how many transfers they will accept by March 1. By April 1 parents must request a transfer from the district they would like their child to attend for the 2012-2013 school year. Districts must notify parents if their transfer requests are accepted by May 1.
HOW LONG WILL MY CHILD BE ABLE TO TAKE ADVANTAGE OF OPEN ENROLLMENT?
The open enrollment law is set to expire in the summer of 2017, except for children who are already taking advantage of the law. Once a child is accepted into another district under this law, he or she will be considered a resident of that district until he or she graduates, enrolls in another district, or becomes ineligible because of age or expulsion. Parents should note that after one year of using the program, the receiving district can transfer students to another school within that district, provided that it is in line with district policy. (Districts cannot single out certain students for transfer, nor can they give preference to new out-of-district transfers.)
WHAT IF THE SCHOOL LIMITS HOW MANY TRANSFERS IT WILL ACCEPT?
Similar to current public charter school enrollment rules, the school will not be allowed to discriminate among transfers. If not enough slots are available for all students requesting transfers, the district will hold a lottery.
WHAT ABOUT TRANSPORTATION?
Parents are responsible for getting their child to an existing bus line within the district the child transfers to. Districts are allowed to provide transportation scholarships for low-income families or special bus lines, if they desire. For more information, contact the district into which you want to transfer your child.
WHERE CAN I LEARN MORE?
To learn more, you can contact the district you would like your child to attend, or read the bill that created open enrollment at http://gov.oregonlive.com/bill/2011/HB3681/.
Click here to listen to the testimony. Christina Martin’s testimony to the House Interim Committee on Business and Labor starts at 41:00.
Co-Chair Garrett, Co-Chair Kennemer, members of the Committee:
My name is Christina Martin. I am a policy analyst with Cascade Policy Institute.
I am here today to talk about unemployment accounts. The heart of the unemployment account concept is that incentives matter.
In 1991, Michael Sherraden published Assets and the Poor: A New American Welfare Policy, which sparked an entire movement of non-profit and government funded programs. In his work, Sherraden showed how the key to getting ahead is not so much income as it is in building assets or wealth. Assets, as you know, include savings, homes, cars, and intangible things like human capital.
Sherraden observed, as many did in the 90s, that decades of welfare had largely failed to help individuals leave poverty, and instead had created cycles of poverty and government dependance by creating disincentives to success. For example, welfare discouraged asset accumulation by limiting how much savings an eligible individual could have. This encouraged people to think hand to mouth, and day to day, not long term. Sherraden and others’ observations helped stoke some good reforms, but much of that problem still exists today.
One intriguing result of Sherraden’s asset building movement was the creation of matched savings accounts called Individual Development Accounts. When an eligible individual saves a dollar in an Individual Development Account, a non-profit (often government subsidized) will match the savings, with usually one or two dollars. The savings can later be used to buy a home, start a business or go to school. In other words, the savings can only be used for the purpose of investing in certain important assets.
These accounts have proven that people with very small incomes can and will save when the incentives are strong. And it has led to life-changing choices – like buying a house, starting a business, or going to school.
Government programs tend to focus on income levels. But assets not only provide financial security, they actually can change the way people behave. Decades of research have shown that asset owners tend to lead more stable lives, think in longer time frames and have more hope for the future. They are also more likely to be involved in community affairs and to plan for their children’s futures.
The children of asset owners are more likely to succeed in school and to escape poverty. The effect of assets on education and test scores is more significant than that of income. Research by the Center for Social Development shows that most likely owning assets actually causes individuals to have greater expectations and, in turn, those expectations cause them to accumulate more assets.
One main focus of the asset building community has been to get rid of some of the asset limits that discourage saving. Similar to asset limits, government programs themselves, like unemployment insurance, cause individuals to save less.
Government safety nets themselves decrease the amount individuals feel they need to save. This effect is very strong with unemployment insurance.
Economists Eric Engen and Jonathan Gruber found that unemployment insurance decreases private savings for the typical unemployment spell by up to one-half. Some may argue that this is not a problem since these workers may need less precautionary savings because of the government safety-net. But such a simplistic answer neglects the importance of owning an asset to individuals’ psychological well being.
Of course, unemployment insurance has more problems than just discouraging savings.
Last month, an owner of a bakery near Medford, Oregon told me about some of the problems his company faced due to the disincentives in Oregon’s unemployment insurance system. Two years ago, in the middle of the recession, this entrepreneur offered a job to a man who responded that he would not be able to start work for another month. Why? Because his unemployment benefits did not run out until then.
This example is one of many stories I’ve heard about the incentive problems created by unemployment insurance. I had a friend who only applied for highly competitive jobs that she knew she had little chance of getting. She really preferred to stay on unemployment benefits. She was expecting her child to be born soon, and it didn’t seem make sense to start a new job, particularly since her husband was gainfully employed.
Peer reviewed research shows that people receiving unemployment benefits commonly take longer to find a job. Unemployed workers who receive benefits take more than twice the time to find a job than those who do not. The instances of recipients finding a job increase strikingly just before UI benefits are exhausted (see graph) That does NOT mean that individuals who use unemployment benefits are dishonest, lazy, or bad. It DOES mean that incentives and logic play roles in their job searches. A new job is not only work, but it is full of risks and uncertainty. In some cases, a new job may pay less than unemployment benefits.
Unemployment benefits come with certain requirements precisely because of these incentive issues. Workers must actively search for work and accept appropriate full-time employment. However, requirements are frequently ignored or misunderstood. A U.S. Department of Labor report showed overpayments in unemployment benefits across the nation amount to almost $19 billion in waste.
Beating the national average of 11%, Oregon overpaid an estimated $392 million over the last three years―about 12.2% of all state unemployment benefits paid during that period, according to the Labor Department. About one third of overpayments involved workers receiving benefits when ineligible because they were not available for work or because they failed their work search requirements.
So what’s the solution?
Chile’s unemployment insurance savings accounts have cut back on the disincentives that slow the job search for many who receive unemployment benefits. Chile’s workers and employers pay a portion of wages into Unemployment Insurance Savings Accounts. Each worker has his or her own account. When a worker becomes unemployed for any reason (even if it is voluntary), he or she may draw from the personal unemployment account. Workers who are laid off with small account balances receive help from a more traditional unemployment insurance safety net. When they retire, workers may use any remaining balance in their unemployment accounts
Chile’s experience is demonstrating that these accounts create an improved safety net that also improves some of the disincentives within the U.S. system. The personal accounts system motivates workers to return to work faster so they can have more money upon retirement. This system may not solve all overpayment problems, but it would prevent a significant portion of overpayments, since ultimately workers are first paid from their own accounts first.
Chile’s system also broadens the pool of eligible recipients, since workers own their personal accounts. That means workers who cannot accept full-time employment (like a working mother or student) and workers who quit their jobs for personal or professional reasons (who are not covered under our current system) would have more coverage under Chile’s system.
The question is then, not whether unemployment accounts can make things better, but rather what kind of unemployment account system would improve things for Oregon workers and businesses. Bill will discuss that more.
As you listen, please consider that this is about more than some pragmatic improvement to an old system.
This is about taking a system that has bad incentives and that teachers bad lessons, and turning it into something with healthier and more natural incentives. Remember that merely possessing a savings account can transform how people think. Studies by people like Sherraden have shown that building savings can actually cause people to make better decisions and think in longer terms. So the impact of something like this extends far beyond merely dollars and cents, into hearts and minds.
Listen to Christina Martin as she talks with Portland radio host, Victoria Taft, about school choice and its parallels to health and pain.
Policy Analyst Christina Martin discusses her latest commentary on a desire for control leading to the fall of education.
Click here to see her full commentary.
Nobody likes pain, but we need it. This may sound counterintuitive or cruel when you are suffering with an injury or illness, but severe dangers accompany a life without pain. A rare genetic disorder renders some people incapable of feeling pain, heat, or cold. Life for them is full of unexpected dangers, particularly for children, who frequently injure themselves, even biting through their own lips or tongues. More than we appreciate, pain protects us. It teaches us to avoid harmful behaviors and to pursue beneficial ones. Avoiding future pain is an incentive to be hardworking, frugal, kind to our family and neighbors, and even to maintain good health.
While policymakers and politicians may mean well, government programs like ill-conceived entitlements, tax breaks, and mandates wrought with perverse incentives numb the beneficiaries against pain, working against healthy incentives. Consider the most recent economic crises. Why would companies that received massive government bailouts choose to avoid the bad practices that got them into trouble in the first place? What incentive do they have to change if government guarantees a painless outcome?
Pain is an important part of life that should work to correct some of our most harmful behaviors. But if we’re too numb to feel the consequences of our decisions, then like those children, we may find we have seriously damaged our lives, our economy, and our society before we recognize the need to change what we are doing.
Christina Martin talks with Victoria Taft on her latest commentaries about control in education and starting the new year by cutting red tape!
Americans live in a regulatory minefield.
Consider the tens of thousands of statutes, regulations, and court precedents that affect nearly every aspect of your life: The United States Code is 50 volumes; the Code of Federal Regulations is 150,000 pages; State laws, administrative rules, and city codes add tens of thousands more pages. Add the myriad court interpretations of these rules, and you understand why the U.S. has more than 1.2 million active attorneys.
Most of these rules have nothing to do with protecting your rights to life, liberty, and the pursuit of happiness. Most have everything to do with limiting your choices: what kind of home you can live in or business you can start; forms you must file and licenses you must acquire; taxes you must pay; the goods, food, and medicine you can buy; and much more.
Why should we have so many rules? Laws, when rightly established, prevent us from harming each other. But when wrongly established, they keep us from living freely and smother the lamp of creative invention and entrepreneurship. John Quincy Adams wrote, “[T]he laws of man may bind him in chains, or may put him to death, but they never can make him wise, virtuous, or happy.”
Instead of heaping more regulations on us, legislators should cut red tape so individuals and businesses can reach their potential in freedom.
The desire to be in charge is as human as pride. It’s easy to see it in others. We scoff at arrogant, controlling dictators. We criticize parents who use guilt to influence their grown-up children. We commiserate about friends who manipulate others to get what they want.
Yet, when it comes to politics, we tend to think our leaders must have some unusually evil intention when they pass laws that conflict with our values. But politicians are just people. The consequences of their human defects, because of their position and power, just reach farther.
People often try to control others because they think they know what’s best. Their intentions feel like love, though they may really be driven by fear or distrust. Similarly, most individuals in power whom I’ve gotten to know genuinely feel that by controlling others they are helping people and making the world better. It’s a proud presumption, as familiar as that feeling of superiority we all experience when passing judgment on others for their choices.
The presumption says: “I can make better choices for you than you can make for yourself.” Whether or not that is true, only the government―not overbearing relatives or unpleasant friends―truly has the power to enforce its choices. And nowhere are issues of government control more contentious―and the consequences far-reaching―than in children’s education.
Education policy affects every child, and all sides of the debate trumpet kids’ interests as the heart behind their cause. And most sides believe it. With parents, the argument tends to orbit around values, that is, whose values should be taught in public schools. This struggle to decide whose values should be taught can be seen in states as different as Texas and California.
Rather than controlling how others’ children should be taught, those decisions should be removed from the political realm and returned where they belong―with the family. Each parent should be able to choose a school that offers the kind of education they want for their kids. That is the beauty of “school choice.”
Arguments for school choice usually focus on how empowering parents through education scholarships or vouchers, tax credits, and digital learning programs create scientifically proven gains in math, science, and reading. But its most virtuous effect is on human dignity.
School choice is the only means by which society can respect parents’ rights to raise their children. Parents have a natural right to raise their kids according to their values and to shelter them from an overwhelming barrage of bureaucratic mandates and politically sanctioned value systems. Likewise, school choice is the only means of reform which gives harbor to teachers and school administrators from that same hurricane of red tape that keeps so many of them from fully channeling their talents and passions to prepare kids for life.
The argument I most consistently hear from opponents of school choice is that many parents are unable to make good decisions for their kids. Thus, the most vulnerable children will suffer. However, this argument has been proven wrong in empirical studies that show regular public schools improve with vouchers that allow kids to attend private schools. Yet, that is not why we should support school choice. We should support school choice because we respect freedom itself. We should support school choice because we respect the rights of parents to do their best for their kids.
Those who fear that school choice will leave vulnerable children more vulnerable shouldn’t in the name of love or compassion empower the state to curtail parents’ ability to choose. Rather than cater to our natural arrogance and wrongly call it “loving our neighbors,” why not instead practice real love? Real love demands freedom to choose to love and to sacrifice. If you see something wrong, go out and change it through human relationships―by loving your neighbors, not by stealing their liberties. Talk to your neighbor’s kids. Volunteer to tutor a friend of your family. Support parents who are struggling. Change the hearts and minds of those close to you with the sweat of your brow, not with the cold impersonal hand of government regulations.