There are plenty of great options available to innovative states that are willing to experiment with their educational systems to try and improve. This report from the Cato Institute outlines some of the ideas that have had success in other states:
Fifty million students attend U.S. district schools. Although some states and localities allow families some measure of choice, the U.S. Department of Education reports that 73 percent of U.S. students attend the district school they were assigned based on the location of their home. Still, for most low- and middle-income families, there are no financially viable alternatives. These parents have nowhere to turn when their children’s assigned school fails to meet their needs.
In order to break the link between education and housing and to empower families to choose the education providers that best meet their children’s needs, policymakers in dozens of states have explored various educational choice policies. The three most common forms of private educational choice policies are school vouchers, tax-credit scholarships, and, most recently, education savings accounts (ESAs).
- Vouchers: Private school vouchers are coupons that the state provides to help families cover the cost of private school tuition. Since Wisconsin lawmakers granted school vouchers to Milwaukee students in 1990, lawmakers in 11 states plus Washington, D.C., and Douglas County, Colorado, have enacted similar laws. More than 140,000 students received school vouchers in the 2014-15 school year.
- Tax-credit scholarships: As with school voucher programs, tax-credit scholarships (TCS) help families pay for private school tuition. However, unlike vouchers, TCS programs are privately administered and funded through voluntary contributions. A TCS law grants a full or partial tax credit to individual and/or corporate taxpayers in return for contributions to nonprofit scholarship organizations. These organizations help families enroll their children in the schools of their choice. As of the 2014-15 school year, more than 200,000 U.S. students were receiving tax-credit scholarships in 14 states, and two new states enacted similar laws this year.
- Education savings accounts: ESAs are restricted-use bank accounts that families can use to purchase a wide variety of educational products and services, including personal tutors, online classes, educational therapies, textbooks, and homeschool curricula, in addition to (or instead of) private school tuition. Funds roll over from year to year so parents can save for future educational expenses, including college. In the five ESA programs enacted thus far, the state deposits a portion of the funds that would have been spent on the child in the public school system into the ESAs several times each year. More than 5,000 students are using ESAs in the 2015-16 school year. This paper will explain how education savings accounts can be funded through tax-credit eligible donations instead of from a state’s general fund.
The good news is that Missouri might soon join the ranks of these innovative states. Republican State Senator Ed Emery has sponsored a bill that would at least be a baby step in the right direction:
From The Show-Me Institute:
In the proposed Senate Bill, which would cover special-needs students only, a tax credit of 75 percent would be granted to individuals who donate to a scholarship organization. That means a donation of $100 would count as a $75 payment towards your taxes. In other words, the scholarship organization is getting $100 from the donation and the state is still collecting $25 in taxes. As I explained in further detail in my paper, “Available Seats?,” this tax credit feature increases the amount of available funds for education.
That is not the only way savings accrue. Special-needs students who are eligible for the program could receive an ESA worth the “State Adequacy Target.” For the 2016-2017 school year, this will be $6,808. This is roughly $2,500 less than the amount of local and state dollars spent per pupil in 2015, and I can assure you that this is less than most schools spend on special-needs students.
Every special-needs student who uses an ESA in this program will essentially be giving Missouri taxpayers and public schools a cost-savings.
In total, more than 6,800 scholarships of the full amount could be awarded under the proposed bill. If we assume that each of these students would have attended a public school (this is not a stretch, since it is stipulated in the bill), then the cost-savings could be in excess of $14 million.