Funding Should Follow the Child

Americans have decided, as a society, to use taxes to finance some or all of the schooling of children regardless of their parents’ ability to pay tuition. This creates a potential conflict with the right of parents to control the education of their children. With certain precautions, that conflict can be addressed by allowing tax dollars to follow the child to whichever school his or her parents choose.

Current Funding Practices Empower Bureaucracies

About half of the taxes collected for education flow from taxpayers to federal or state departments of education, and from there to local school districts and finally to public schools and teachers. The other half of funding comes from local property taxes that typically go to local school districts or to state agencies for redistribution to “property poor” school districts.

Because of bureaucracy, two of every five tax dollars raised for schools do not make it to the classroom (Bonsteel and Brodt 2000). This system concentrates authority in the hands of small groups of largely unelected officials, often far removed from the classroom. Over time, this system has become heavily bureaucratic, wasteful, and resistant to change.

Funding follows a different set of rules in the private school sector. There, parents pay tuition directly to the educators they choose for their children, so funds automatically follow the child. The freedom to choose motivates parents to study their choices closely and let educators know what kinds of schools they want. Competition for tuition leads educators to modify and improve their offerings, and unnecessary and expensive bureaucracies are not tolerated.

Vouchers and Tax Credits

The way public schools are funded can be made to more closely resemble private school funding by requiring that tax dollars follow students to the schools chosen by their parents or guardians. Two ways to do this are vouchers (sometimes called “choice scholarships”) and tuition tax credits.

Under a voucher plan, parents are allowed to choose the schools they consider best for their children and receive tax-funded vouchers or certificates good for tuition (up to some set amount) at participating schools (Walberg and Bast 2003; Hakim et al. 1994; Friedman and Friedman 1980). Schools then compete for students. The amount of the voucher, which schools may participate in the program, and what kinds of regulations should be imposed on participating schools are choices to be made during the school choice program’s design process. (See the principles below for specific legislative suggestions.)

The second way is to provide tax relief to parents who pay tuition to private schools or to individuals and corporations who make donations to pay for private school tuition (Olsen and Brouillette 2000; Bast 2001). Illinois, Iowa, and Minnesota have laws that allow taxpayers to get back from their state governments some part of the amount they spend on private school tuition. Arizona, Florida, and Pennsylvania offer tax credits to corporations and individuals who finance scholarships for children from low-income families.

School Choice Is Working

It is widely acknowledged that students attending private schools, where school choice is practiced, outperform public school students on most measures of academic achievement. According to the U.S. Department of Education,  “Students at grades 4, 8, and 12 in all categories of private schools had higher average scores in reading, mathematics, science, and writing than their counterparts in public schools. In addition, higher percentages of students in private schools performed at or above ‘proficient’ compared to those in public schools” (Alt and Peter 2002).

On average, the costs of private schools are about half that of public schools, and their graduates are more often admitted to elite universities (Salisbury, 2003).

Scholars have carried out large surveys and smaller scale studies of charter schools, private schools, and students using vouchers to attend private schools. They have also compared schools in districts with more or less school choice based on the number of schools in each district or their geographic concentration. The studies looked at student achievement gains, per-student cost efficiency, parent satisfaction, citizens’ favorable regard, and students’ constructive citizenship attitudes and their social behavior in school.

Most of the large-scale studies and surveys find beneficial effects of school choice and are conclusive rather than merely suggestive. Caroline Hoxby (2004), for example, compared achievement data from 99 percent of the nation’s charter schools with nearby traditional schools and found a achievement to be higher on average in charter schools especially those that had been in operation longer. Hoxby’s results showed that poor and Hispanic students performed particularly well in charter schools and that charter school students did particularly well when in states with strong charter school laws that gave the schools autonomy and insured that they got a substantial fraction of the total per-pupil funding of traditional schools.

Hoxby also found a constructive competitive effect of charter schools on nearby traditional public schools. Similarly, Bryan Hassel (2005) reviewed 26 rigorous studies of charter schools and found 16 showed superior charter school effects – this, despite the fact that many of the charter schools were newly begun.

With respect to voucher programs, Jay Greene (2001) summarized seven random assignment studies and three nonrandom assignment studies of voucher programs. The authors of all ten studies found achievement benefits of the programs.

Paul Peterson (2006) found that parents of voucher students reported less fighting, truancy, tardiness, and cheating in their children’s private schools than in their children’s previous public schools. Voucher parents also reported the private schools kept them much better informed about their children’s behavior and academic progress.

Parents and citizens view charter and private schools more favorably than traditional public schools (Public Agenda, 1999). Most voucher programs are oversubscribed, and many students must be turned away. Because states and municipalities limit the number of charter schools, they must also turn students away. (For details of these and many other studies and summaries of studies of school choice, see Walberg, 2007).

Recommended reading: Herbert J. Walberg and Joseph L. Bast, Education and Capitalism (Stanford, CA: Hoover Institution Press, 2003), www. hoover.stanford.edu/publications/books/edcap.html; Milton Friedman and Rose Friedman, Free to Choose (New York, NY: Harcourt Brace Jovanovich, 1980).