K-12 Education Savings Accounts Blasted

Published March 1, 1998

It did not take the Clinton administration long to respond to the U.S. Senate Finance Committee’s February 8 approval of a measure to encourage parents to put aside money in tax-free savings accounts for the education of their children in K-12 schools. Under the proposal, the accumulated funds could be withdrawn tax-free if used to pay for elementary and secondary school expenses, including tuition at private and religious schools.

Education Secretary Richard Riley, the administration’s standard spokesperson for attacks on school choice measures, was joined by Treasury Secretary Robert Rubin in issuing a joint statement opposing K-12 education savings accounts.

Noting that the President had forced a similar provision to be removed from a bipartisan tax bill last year under threat of veto, the two Cabinet secretaries said they would again recommend that the President veto the measure. The administration, they said, believes the proposal “disproportionately benefits the most affluent families and provides little benefit to lower and middle-income families.”

Since affluent families already put aside money for their children’s education, Rubin and Riley argued, they would be getting a benefit for something they already do.

On the President’s initiative, tax-free education savings accounts for post-secondary education expenses were established last year, and, starting this year, taxpayers can invest annually up to $500 after taxes for each child under 18. As part of their current deliberations, the Senate Finance Committee voted to permit investments up to $2,000 annually until 2002.

“Education savings accounts will help families send their children to the very best schools possible,” said the measure’s sponsor, Senator Paul Coverdell (R-Georgia), who has been the main proponent of the K-12 education accounts.

Although President Clinton and the leadership of the Democratic Party oppose K-12 accounts, New Jersey Senator Robert G. Torricelli broke with his Democratic colleagues in support of a similar bill last September, arguing that funds from the accounts also could be used to pay for public school costs, such as transportation and computers.

“It is no longer a time when a student goes to the public school packing a lunch and a few pencils and the family obligations financially . . . are met,” said Torricelli. “Senator Coverdell has a creative and innovative approach to deal with this constitutional and resource-scarce environment.”

While remaining opposed to vouchers, Torricelli told the Bergen Record last year that the K-12 education savings accounts would lead to more public vs. private school competition, which, he said, “can only improve the academic performance of both.”

School Choice Bill Introduced in Missouri

A long-awaited solution to the desegregation problem and the need for school reform to bring quality education to all school children in the St. Louis and Kansas City areas is offered by Missouri State Representative Rich Chrismer and co-sponsors Auer, Foster, Levin, Pryor, Purgason, Dolan, Hendrickson, Donovan, and Loudon. H.B. 1472, “Challenge Scholarships Bill,” was introduced in the Missouri House in January.

HB 1472 would provide Challenge Scholarships to low-income families whose income is up to 200 percent of the poverty line. The scholarships would allow students to attend private schools, and could also be used to cover tutoring expenses for students enrolled at public schools. The scholarships would average between $2500 and $300 per student per year and would be applicable for students in grades K-12.

The bill would address the desegregation issue by offering “open enrollment,” or freedom of choice, to all parents of any race, creed, or color. Challenge Scholarships would be provided in the desegregation areas of urban St. Louis and Kansas City. The bill would save the nearly half-billion dollars now spent on taxis and buses . . . and the funds would be used for education, not transportation.

At a press conference in the State Capitol, Representative Chrismer discussed the need for parents’ choice in education and how it could result in a real solution to the desegregation problems, lower school taxes, and improve the quality of education for all children. He was supported at the event by a number of education reform leaders, including CEF-MO members Mae and Martin Duggan, Joseph Schmitz, Gene Gremaud, and Herman Kriegshauser.

Alveda King Praises School Choice

Alveda King, niece of the Rev. Martin Luther King Jr., is an ardent champion of parental choice in education. Last September, when Congress was debating whether to grant scholarships to poor and minority children to enable them to escape the failing Washington, D.C. public schools, Ms. King held a news conference in the nation’s capital to speak out in favor of choice.

On January 19, Martin Luther King Day, Miss King and Mae Duggan appeared together on Marlin Maddox’s “Point of View” radio program, heard on nearly 400 radio stations nationwide. Mrs. Duggan noted during the program that “We of Citizens for Educational Freedom also have a dream: Freedom of choice and a fair share for every school child.” Both Miss King and Mr. Maddox agreed, extolling the benefits of parental choice during the hour-long program.