Legislation has been introduced in the Missouri Senate that would create a program providing Missouri children with access to education savings accounts (ESA): the Missouri Empowerment Scholarship Accounts Program.
With an ESA, state education funds allocated for a child are placed in a parent-controlled savings account. Parents then use a state-provided debit card to access the funds to pay for the resources chosen for their child’s unique educational program. Under the proposed program, ESAs could be used to pay for tuition and fees at private and parochial schools, as well as textbooks, tutoring services, computer hardware, summer education programs, and educational therapies. The ESAs could also be used to cover the fees required to take national standardized achievement tests, such as the SAT or ACT.
Funds for the Missouri Empowerment Scholarship Accounts Program would be provided in a way that is similar to how tax-credit scholarship programs are funded. Individuals and businesses would receive a tax credit equal to 100 percent of the amount of a contribution made to fund the program, so long as the claimed tax credit does not exceed 50 percent of the taxpayer’s liability for the tax year for which the credit is claimed. These contributions and the ESA accounts they fund would be managed by state-sanctioned “educational assistance organizations.” The state would cap the maximum amount of contributions to the program at $50 million per year. A Show-Me Institute analysis found an ESA program funded in this fashion could save Missouri school districts up to $39 million a year with a combined state and local net fiscal impact of over $57 million in savings a year.
Two recent surveys show the broad popularity of ESA programs, which are currently active in six states. A seventh state, New Hampshire, will likely pass its own ESA program soon. In December 2017, EdChoice released the results of its fifth annual Schooling in America survey, conducted in partnership with Braun Research, Inc. The survey questioned 1,000 adults spread across the country about their views on K–12 education issues. Seventy-one percent of all respondents answered they were in favor of ESAs, while support for the programs is 76 percent among Millennials, 77 percent for those with incomes under $40,000 a year, 77 percent for blacks, and 81 percent for Hispanics.
These poll results were bolstered by a survey published by the American Federation for Children that was released in mid-January. The survey, conducted by Democratic polling firm Beck Research, questioned 1,100 likely voters in the 2018 midterm elections. Seventy-five percent of respondents said they are in favor of ESAs, including 73 percent of blacks, 87 percent of Hispanics, 77 percent of Millennials, 78 percent of independent voters, and 70 percent of Democrats.
ESAs are broadly popular because they allow parents to exercise their fundamental right to direct the education of their children. Not only are school choice programs like ESAs popular, they are also effective. In May 2016, EdChoice released a report in which it examines 100 empirical studies of school choice programs. Eighteen of these studies used random assignment to measure outcomes, referred to in academia as the “gold standard.” The overwhelming majority of the available empirical evidence makes it clear educational choice offers families improved access to high-quality schools that meet their widely diverse needs and desires, and it does so at a lower cost while simultaneously benefitting public school students and taxpayers, decreasing segregation, and improving civic values and practices.
ESA programs are not a silver-bullet solution, but they certainly allow families much greater opportunities to meet each child’s particular education needs. The goal of public education in the Show Me State today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school.
The following documents provide more information on education savings accounts.
Education Savings Accounts: The Future of School Choice Has Arrived
https://heartland.org/publications-resources/publications/education-savings-accounts-the-future-of-school-choice-has-arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal ESA programs offer the most comprehensive range of educational choices to parents; describes the six ESA programs currently in operation; and reviews possible state-level constitutional challenges to ESA programs.
A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
http://www.edchoice.org/wp-content/uploads/2016/05/A-Win-Win-Solution-The-Empirical-Evidence-on-School-Choice.pdf
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.
2017 Schooling in America: Public Opinion on K–12 Education, Parent Experiences, School Choice, and the Role of the Federal Government
https://www.edchoice.org/wp-content/uploads/2017/11/2017-Schooling-In-America-by-Paul-DiPerna-Michael-Shaw-and-Andrew-D-Catt.pdf
This annual EdChoice survey, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.
Competition: For the Children
https://heartland.org/publications-resources/publications/competition-for-the-children
This study from the Texas Public Policy Foundation claims universal school choice results in higher test scores for students remaining in traditional public schools and improved high school graduation rates.
Recalibrating Accountability: Education Savings Accounts as Vehicles of Choice and Innovation
ttps://heartland.org/publications-resources/publications/recalibrating-accountability-education-savings-accounts-as-vehicles-of-choice-and-innovation?source=policybot
This Special Report from The Heritage Foundation and the Texas Public Policy Foundation explores how education savings accounts expand educational opportunities and hold education providers directly accountable to parents. The report also identifies several common types of regulations that can undermine the effectiveness of the program and how they can be avoided.
Why Indiana Parents Choose: A Cross-Sector Survey of Parents’ Views in a Robust School Choice Environment
https://www.edchoice.org/research/indiana-parents-choose/
This survey developed by EdChoice and conducted by Hanover Research aims to measure what motivates parents from all sectors—private, public, and charter—to choose schools, as well as their awareness of school choice options, their satisfaction levels, and the goals they set for their children’s education.
The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?
http://www.edchoice.org/wp-content/uploads/2015/07/The-School-Voucher-Audit-Do-Publicly-Funded-Private-School-Choice-Programs-Save-Money.pdf
This report by Jeff Spalding of EdChoice provides a program-for-program breakdown of school voucher costs and savings. On the whole, Spalding says these programs have provided a cumulative savings of $1.3 billion since 2007, or roughly $3,400 per pupil.
Estimating the Fiscal Impact of a Tax-Credit Scholarship Program
https://showmeinstitute.org/sites/default/files/Tax%20Credit%20ESAs_Lueken-McShane.pdf
Tuition tax-credit scholarship programs grant tax credits to individuals or corporations that donate to organizations that in turn give scholarships to K-12 students. Seventeen states currently have tax-credit scholarship programs. This essay from the Show-Me Institute examines the possible fiscal impact of such a program in Missouri.
Taking Credit for Education: How to Fund Education Savings Accounts Through Tax Credits
https://heartland.org/publications-resources/publications/taking-credit-for-education-how-to-fund-education-savings-accounts-through-tax-credits
This paper from the Cato Institute explains how legislators can design an education savings account (ESA) program that is privately funded through tax-credit-eligible contributions from taxpayers, which is similar to models used in many tax-credit scholarship programs around the country. Tax-credit-funded ESAs would empower families with more educational options while enhancing accountability and refraining from coercing anyone into supporting ideas they oppose. Because they are funded through voluntary contributions rather than public funds, tax-credit scholarships have a perfect record of constitutionality at the U.S. Supreme Court and at every state supreme court that has considered the issue. In states that have adopted a Blaine amendment, tax-credit ESAs could be a lifeline to families in need.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at [email protected] or 312/377-4000.
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
