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Backgrounder #1970 on Education

September 18, 2006

School Choice: 2006 Progress Report

By and

Reforms that give parents greater ability to choose their children's schools continue to expand across the nation. Just a decade ago, only a few school choice programs existed. Today, a dozen states and the District of Columbia have private school choice programs. In 2006, eight states- Arizona, Florida, Iowa, Ohio, Pennsylvania, Rhode Island, Utah, and Wisconsin-enacted new school choice programs or expanded existing programs. By 2007, as many as 150,000 students will be par­ticipating in publicly funded tuition scholarship programs.[1]

As of August 2006:

  • Seven states-Arizona, Florida, Maine, Ohio, Ver­mont, Utah, and Wisconsin-and the District of Columbia have taxpayer-funded scholarships to help students attend private elementary or sec­ondary schools of choice;

  • Seven states-Arizona, Florida, Illinois, Iowa, Minnesota, Pennsylvania, and Rhode Island- have tax credits or deductions for education expenses, including private school tuition, or incentives for contributions to scholarship programs;

  • Forty states and the District of Columbia have charter school laws;

  • Public school choice within or between districts is guaranteed in 15 states;

  • Dual enrollment programs[2] exist in 38 states, in 18 of which the programs are mandatory, to allow qualifying high school students to attend college classes to receive higher education credits; and

  • Home schooling is legal in every state.[3]

The Expansion of School Choice

Laws passed during the 2006 state legislative ses­sions substantially increased parental choice in educa­tion. In all, publicly funded private school choice programs were created or expanded in eight states.

In Wisconsin, lawmakers broadened the state's landmark school voucher program to allow an additional 7,500 students to participate this fall- an increase of 50 percent.[4] In Arizona, three new private school choice programs were created: a corporate scholarship tax credit program for low-income students, a scholarship program for spe­cial education students, and a first-in-the-nation scholarship program for foster children.[5] New scholarship tax credit programs were created in Iowa and Rhode Island. Existing school choice programs were expanded in Ohio, Pennsylvania, and Utah.[6]

This progress in 2006 follows a 15-year trend of reforms to give parents greater ability to choose their children's schools. In all, 10 states now have publicly funded scholarship programs to help stu­dents gain access to private school options. By 2007, an estimated 150,000 students will partici­pate in publicly funded tuition scholarship pro­grams across the United States.

Forty states and the District of Columbia now have charter schools. In all, more than 1 million students are attending more than 3,600 charter schools across the United States.[7] Every state allows home schooling, and more than 1 million families have opted to forgo publicly financed schools and to educate their children at home.[8]

While school choice is expanding, millions of families still do not have the freedom to choose their children's schools. Communities across the nation should follow in the footsteps of existing school choice programs to increase educational freedom by allowing parents to direct their chil­dren's education.

Developments in 2006

During 2006, seven states enacted measures to create new private school choice programs or to expand existing programs. The following is an overview of the measures enacted to expand or cre­ate K-12 private school choice options.

Arizona. During the 2006 legislative session, Ari­zona lawmakers created three new private K-12 school choice options.[9] The first new initiative is a corporate scholarship tax credit that allows businesses to take a dollar-for-dollar tax credit for contributions to nonprofit organizations that fund private school scholarships for low-income students. The total amount of tax credit contributions is capped at $10 million annually with a provision increasing the cap by 20 percent each year until 2010, when $21 million will be available for tax credit contributions.[10]

Arizona's second new option is a private school scholarship program for children with disabilities. Under the program, $2.5 million will be available annually for qualifying special education students to attend private schools of choice.[11]

The third program is a first-in-the-nation school voucher program for foster children. This program will provide $2.5 million annually for tuition schol­arships for children who have been placed in foster care.[12] Foster children face many challenges in life and in the classroom. Research suggests that, com­pared with the general population, foster children have lower scores on standardized tests and higher absenteeism, tardiness, truancy, and dropout rates. One main problem is instability: Children in long-term foster care often experience multiple home placements, which can lead to school transfers.[13] A voucher program could provide foster children with a more stable and higher-quality education. Gover­nor Janet Napolitano (D) signed the foster care and special education school choice programs into law and allowed the corporate tax credit program to become law without her signature.

Florida. In June, Governor Jeb Bush (R) signed legislation to allow students who had been partici­pating in the A+ Opportunity Scholarship pro­gram, which helped children from failing public schools, to receive scholarships through Florida's existing corporate scholarship tax credit program.[14] This change in the law was necessary because the Florida State Supreme Court had ruled that the Opportunity Scholarship program was unconstitu­tional. Without this legislation, more than 700 chil­dren would have been returned to failing schools, as defined under Florida law. The legislation includes accountability requirements for partici­pating private schools.

Iowa. In June, Governor Tom Vilsack (D) signed into law the Educational Opportunities Act, creat­ing a scholarship tax credit program to help thou­sands of children in Iowa. Individuals can receive a 65 percent tax credit for donations to nonprofit school tuition organizations that fund private school scholarships. Students from families with incomes below 300 percent of the poverty line are eligible to receive scholarships. The total amount of donations that can qualify for the tax credit is capped at $2.5 million in 2006 and $5 million annually in subsequent years. The legislation received overwhelming bipartisan support, passing by a vote of 49 to 1 in the Iowa Senate and 75 to 19 in the Iowa House of Representatives.[15]

Ohio. Ohio lawmakers enacted legislation to expand the number of students eligible for scholar­ships through the 2005 EdChoice program, which provides school vouchers to students attending low-performing schools.[16] By extending this opportu­nity to students attending public schools under "aca­demic watch," this legislation increased the number of students eligible to receive scholarships from 20,000 to 50,000.

Pennsylvania. In July, Pennsylvania lawmakers expanded the state's Educational Improvement Tax Credit program, which allows corporations to receive partial tax credits for donations to orga­nizations that fund private school scholarships or school improvement projects. The measure increased the tax credit limit from $44 million to $54 million.[17]

Rhode Island. In Rhode Island, lawmakers cre­ated a new $1 million corporate scholarship tax credit program to provide tuition scholarships to children from low-income families.[18] To receive a scholarship, a student must be from a family with an income below 250 percent of the poverty line.

Utah. In March, Governor Jon Huntsman, Jr. (R), signed legislation to expand the Carson Smith Scholarship program, created in 2005 to provide tuition scholarships to children with special needs. The 2006 legislation increased the number of schools and students that are eligible to partici­pate.[19] According to the Alliance for School Choice, between 250 and 500 children received Carson Smith scholarships worth $5,700 each to attend private schools in 2005-2006.[20]

Wisconsin. In March, Governor Jim Doyle (D) reached an agreement with Republican leaders in the state legislature to increase the number of students who can participate in the landmark Milwaukee school voucher program from 15,000 to 22,500.[21] The program, which was created in 1990-1991, had limited the number of participating children to 15 percent of the school district's enrollment. In 2004- 2005, 15,035 students received vouchers.[22] In addi­tion to lifting the enrollment cap, the compromise legislation requires participating private schools to administer a national norm-referenced test in read­ing, mathematics, and science to voucher students in 4th, 8th, and 10th grades and to submit the results for an academic evaluation.[23]

Growing Bipartisan Support

In addition to the successful efforts to enact school choice legislation across the country in 2006, state lawmakers in at least 29 states consid­ered school choice initiatives, according to the Mil­ton & Rose D. Friedman Foundation. Since six states did not have a legislative session in 2006, this represents approximately two-thirds of all the states that had legislative sessions. The Friedman Foundation reports that 428 school choice initia­tives were considered during the 2005-2006 state legislative sessions.[24] (For an overview of school choice plans, see the Appendix.)

The 2006 state legislative sessions witnessed increasing willingness of Democratic lawmakers to embrace school choice initiatives. In Arizona, Iowa, Pennsylvania, and Wisconsin, Democratic gover­nors signed legislation to create new school choice programs or to expand existing ones. Similarly, a growing number of state Democratic legislators backed school choice measures during the 2006 legislative session. This trend of expanding biparti­san support suggests that more school choice pro­grams could be enacted in future years.

Growing Evidence That School Choice Works

One likely reason for the growing bipartisan sup­port for school choice is the mounting empirical evidence that school choice programs work. Over the past 15 years, the growth of school choice pro­grams has enabled researchers to study the impact of school choice on students, families, and school systems. Students participating in school choice programs have made academic gains when com­pared to their peers in public school. Importantly, public schools that face competition from choice programs have shown improvement.

Strong Demand for Scholarships. School choice is clearly popular among participating families. For example, when tuition scholarships have been made available to low-income fami­lies, the number of students seeking scholarships has far surpassed scholarship availability. In 1998, the Children's Scholarship Fund offered 40,000 privately funded tuition scholarships to low-income students. More than 1.2 million children applied. In New York City, Newark, New Orleans, Philadelphia, and Washington, nearly one out of three eligible students applied for scholarships.[25] In Washington, D.C., nearly two applicants applied for each available schol­arship offered through the federal D.C. Opportu­nity Scholarship program.[26]

Higher Parental Satisfaction. Parents bene­fiting from school choice report higher levels of satisfaction, as indicated by numerous studies. For example, a 2003 Goldwater Institute survey of approximately 2,600 low-income families participating in the Arizona School Choice Trust's scholarship program found that parents who were able to choose their children's schools were happier with their children's schools than were parents who were unable to choose their children's schools.[27] In 2003, the Manhattan Institute surveyed parents participating in Flor­ida's McKay Scholarship Program for Students with Disabilities and found that 92.7 percent of parents were satisfied or very satisfied with their children's schools, compared to just 32.7 percent of public school parents.[28]

The U.S. Department of Education's National Household Education Survey Program also found that parents benefiting from school choice were more satisfied with their children's schools and more involved in their children's education:

Parents whose children attended either public, chosen schools or private schools were more likely to say they were very satisfied with their children's schools, teachers, academic standards, and order and discipline than were parents whose children attended public, assigned schools. Parents whose children attended private schools were more involved in activities at their children's schools than were parents whose children attended public, assigned and public, chosen schools.[29]

Improved Academic Achievement. Students in private school choice programs show increased academic achievement. Eight "random-assign­ment" studies of five school voucher and tuition scholarship programs compared the performance of students who were awarded scholarships to attend private school through a lottery system to the performance of their peers who entered the lot­tery but did not receive a scholarship and therefore remained in public school.

According to education researcher Jay Greene, all but one of these studies found that students using scholarships to attend private schools per­formed significantly better academically, and every study found some positive academic effect. For example, the Milwaukee school voucher program has been subject to two randomized-experiment studies that have found that students who received vouchers through a lottery made academic gains when compared to their peers who remained in public school. Similar studies of private school choice programs in cities such as Charlotte, North Carolina; New York City; and Washington, D.C., reached similar conclusions.[30]

Improved Public School Performance Through Competition. In addition to helping participating children, school choice programs introduce com­petition into public school systems, which can drive public schools to improve performance or risk losing students. Studies have suggested that competition has a desirable system-wide effect, encouraging traditional public schools threatened with a loss of students to make better use of their resources.

For example, Harvard University economist Car­oline Hoxby has studied the effects of competition on education in Arizona, Michigan, and Milwaukee and found that it sparked improvement in public schools. In Arizona and Michigan, public schools facing competition from charter schools realized greater academic improvement than public schools that did not face competition. In a separate study of Milwaukee's choice program, Hoxby found statisti­cally significant evidence that competition spurs improvement. Hoxby has studied other types of school choice-such as interdistrict choice among public schools-and found that these types of competition also lead to significant improvements. Her findings point to significant benefits from com­petition:

If every school in the nation were to face a high level of competition both from other districts and from private schools, the productivity of America's schools, in terms of students' level of learning at a given level of spending, would be 28 percent higher than it is now.[31]

Remaining Challenges

Despite growing evidence that school choice pro­grams are working, efforts to expand parental choice in education still face many obstacles, partic­ularly legal challenges that threaten to eliminate school choice options. In January, the Florida Supreme Court struck down the state's Opportunity Scholarship program, ruling that the scholarship program for children in failing schools violated the Florida constitution's "uniformity" clause that guar­antees all students a "uniform, safe, secure, and high quality system of free public schools."[32] The ruling would have ended a program that had been helping students enrolled in failing public schools to attend private schools since 1999 if the Florida legislature had not provided an alternate funding source for participating students.

The recent ruling in Florida is likely to inspire future legal challenges. Clark Neily, an attorney with the Institute for Justice, an organization that litigates on behalf of school choice initiatives, explained: "There's no question that this decision will embolden the school choice opponents to throw the uniformity argument against the wall and see if it sticks in other states."[33]

School choice programs like Florida's Opportu­nity Scholarship program have been the subject of numerous legal challenges across the country in spite of a favorable verdict in the U.S. Supreme Court. In 2002, the Court upheld the constitution­ality of the Cleveland school voucher program in the landmark Zelman v. Simmons-Harris decision. The Court ruled that the Cleveland voucher pro­gram, which allowed students to use scholarships to attend religious private schools, did not violate the First Amendment. In addition, school choice programs have been successfully defended in Ari­zona, Illinois, Ohio, and Wisconsin.[34]

However, the U.S. Supreme Court decision has not halted challenges based on state constitutions, which have different language and legal histories. State courts have issued rulings that have excluded religious private schools from school choice pro­grams in Puerto Rico and Vermont.[35] Lawmakers implementing school choice programs should be optimistic that well-designed programs have been upheld by state courts across the country, but the legal challenges to school choice can be expected to continue.

What Congress and State Policymakers Should Do

Children across the country would benefit from greater choice in education. Millions of American children are enrolled in underperforming public schools. According to a Department of Education report in 2006, more than 2,112 public schools have missed state benchmarks for five or more years under No Child Left Behind.[36] In some large school districts, including New York City, Los Angeles, and Chicago, hundreds of thousands of students are enrolled in persistently underperform­ing public schools.

Moreover, the children in chronically underper­forming schools are just the tip of the iceberg. A high percentage of public school students nationwide are achieving only minimal academic standards. On the recent 2005 National Assessment of Educational Progress, 32 percent of 8th graders from low-income households scored "below basic" on math, and 29 percent scored "below basic" on reading.[37]

American taxpayers spend more than $440 billion annually on K-12 public education in the United States.[38] Federal and state policymakers should give parents greater freedom to control the dollars and decision-making in their children's education.

To this end, Congress should:

  • Implement reforms to strengthen the existing parental choice components of No Child Left Behind, including enacting the America's Opportunity Scholarship for Kids initiative, a pilot program to provide opportunity scholar­ships to children in persistently failing public schools;

  • Reauthorize and expand the D.C. Opportunity Scholarship program to give more children in the nation's capital the freedom to attend schools of their parents' choice;

  • Expand Coverdell Education Savings Accounts to give families greater ability to save for and direct their children's K-12 education; and

  • Implement reforms to transfer dollars and power back to state and local policymakers so that local policymakers can enact reforms that best suit local community needs, such as ex­panding parental choice.

For their part, state policymakers should:

  • Enact student-centered education reforms to provide all students with greater freedom to attend schools of their parents' choice, includ­ing scholarship programs and tax incentives to promote parental choice, and

  • Expand parental choice within the public school system through such means as allowing for the creation of more public charter schools.

Conclusion

Across the country, parental choice in education is growing and working. Today, a dozen states and the District of Columbia have private school choice programs. Existing school choice programs have been shown to increase parental satisfaction, improve academic achievement of participating children, and improve public school performance through competition.

The growing success of school choice programs has led more policymakers to support expanding parental choice in education. Already in 2006, eight states have enacted new initiatives or expanded existing private school choice programs.

However, millions more children in the United States could benefit from the opportunity to attend schools of their parents' choice. State and federal policymakers should implement student-centered reforms to give all parents the ability to direct their children's education.

Dan Lips is Education Analyst and Evan Feinberg is a Research Assistant in the Domestic Policy Studies Department at The Heritage Foundation.



[1] This estimate is based on participation in current programs and projections of full participation in newly enacted or expanded programs in 2007. (For an overview of school choice plans, see the Appendix.) This year, 22,522 students received scholarships through Arizona's scholarship tax credit program. An estimated 2,350 students will participate in Arizona's three new scholarship programs next year. In Florida, 31,636 students participated in scholarship programs last year. In Iowa, an estimated 500 students will participate in the state's new scholarship program next year. In Maine and Vermont, 13,959 and 8,040 students, respectively, participated in the states' tuitioning programs during a recent year. In Ohio, 5,675 students participated in the Cleveland voucher program last year. As many as 14,000 students could receive scholarships through Ohio's new school choice program. In Pennsylvania, an estimated 25,000 students participated in the corporate scholarship tax credit program last year. In Rhode Island, as many as 200 students will receive scholarships through the new corporate tax credit program next year. In Utah, as many as 500 students participate in the Carson Smith special needs scholarship program. In Washington, D.C., 1,733 students received opportunity scholarships last year. In 2007, 22,500 students will be eligible to receive school vouchers in Milwaukee.

[2] Melinda Mechur Karp, Thomas R. Bailey, Katherine L. Hughes, and Baranda J. Fermin, "State Dual Enrollment Policies: Addressing Access and Quality," U.S. Department of Education, Office of Vocational and Adult Education, 2004, at http://eric.ed.gov/ERICDocs/data/ericdocs2/content_s
torage_01/0000000b/80/2b/b4/c9.pdf
(August 15, 2006).

[3] For additional background information, see The Heritage Foundation, "Choices in Education," Web site, at http://www.heritage.org/schoolchoice, and Krista Kafer, "Choices in Education: 2005 Progress Report," Heritage Foundation Backgrounder No. 1848, April 25, 2005, at http://www.heritage.org/Research/Education/upload
/77495_1.pdf
(August 14, 2006).

[4] Amanda Paulson, "Milwaukee's Lesson on School Vouchers," The Christian Science Monitor, May 23, 2006, at http://www.csmonitor.com/2006/0523/
p01s03-usgn.html
(September 11, 2006).

[5] Andrea Falkenhagen, "School Vouchers Deal Angers Some," East Valley Tribune, June 25, 2006, at http://www.eastvalleytribune.com/index.php?sty=68393 (September 11, 2006).

[6] News release, "PA Expands Education Tax Credit by $10 Million," Alliance for School Choice, July 3, 2006, at http://www.allianceforschoolchoic
e.org/media_center.aspx?IITypeID=3&IIID=2727
(August 15, 2006).

[7] Center for Education Reform, "National Charter School Data at-a-Glance," October 2005, at /static/reportimages/C803D92D18318028B312921A2AFABFB4.pdf (August 4, 2006).

[8] Kafer, "Choices in Education."

[9] Press release, "Four New School Choice Measures Make History," Goldwater Institute, June 21, 2006, at http://www.goldwaterinstitute.org/article.php?/1042.html (August 10, 2006).

[10] News release, "Arizona Enacts Nation's First School Choice Scholarship Program for Foster Children," Alliance for School Choice, June 21, 2006, at http://www.allianceforschoolchoice.org/media_center.aspx
?IITypeID=3&IIID=2712
(August 15, 2006).

[11] Ibid.

[12] Ibid.

[13] Dan Lips, "School Choice for Maryland's Foster Care Children: Fostering Stability, Satisfaction, and Achievement," Maryland Public Policy Institute, September 2006, at /static/reportimages/5CBA71E998D681E6E8D64AA2C77C0618.pdf (September 5, 2006).

[14] News release, "Florida Governor Signs Bill Giving Displaced Students a Lifeline to a New School Choice Program and
More Accountability to Private Schools," Alliance for School Choice, June 7, 2006, at http://www.allianceforschoolchoice.org/media_center.as
px?IITypeID=3&IIID=2691
(August 15, 2006).

[15] Milton & Rose D. Friedman Foundation, "Iowa Enacts New Scholarship Tax Credit Program," June 2, 2006, at http://www.friedmanfoundation.org/news/2006-06-02.html (June 19, 2006).

[16] News release, "Ohio and Utah Pass Bills Expanding School Choice Programs," Alliance for School Choice, March 30, 2006, at http://www.allianceforschoolchoice.org
/media_center.aspx?IITypeID=3&IIID=2599
(August 15, 2006).

[17] News release, "PA Expands Education Tax Credit by $10 million."

[18] News release, "Rhode Island Passes State's First Private School Scholarship Program," Alliance for School Choice, June 26, 2006, at http://www.allianceforschoolchoice.org/media_
center.aspx?IITypeID=3&IIID=2718
(August 15, 2006).

[19] News release, "Ohio and Utah Pass Bills Expanding School Choice Programs."

[20] Alliance for School Choice, "School Choice Around the Nation," at http://www.allianceforschoolchoice.org/school_c
hoice_states.aspx
(August 4, 2006).

[21] Paulson, "Milwaukee's Lesson on School Vouchers."

[22] Milton & Rose D. Friedman Foundation, "The ABCs of School Choice: 2005-2006 Edition," at http://www.friedmanfoundation.org/ ABCs.pdf (August 12, 2006).

[23] News release, "Wisconsin Governor Signs Bill to Increase School Choice Program Cap," Alliance for School Choice, March 10, 2006, at http://www.allianceforschoolchoice.org/media_
center.aspx?IITypeID=3&IIID=2566
(August 15, 2006).

[24] Milton & Rose D. Friedman Foundation, "A Map for Success," August 2006.

[25] Anemona Hartocollis, "Private School Choice Plan Draws a Million Aid Seekers," The New York Times, April 21, 1999, p. A1.

[26] V. Dion Haynes, "2nd D.C. Voucher Lottery Gets Stronger Response," The Washington Post, April 16, 2005, p. B2, at http://www.washingtonpost.com/wp-dyn/articles/A57562-2005Apr15.html (September 11, 2006).

[27] Dan Lips, "The Impact of Tuition Scholarships on Low-Income Families: A Survey of Arizona School Choice Trust Parents," Goldwater Institute Policy Report No. 187, December 11, 2003, at /static/reportimages/01BD402A478556E3E6ADDD31C72A5424.pdf (August 14, 2006).

[28] Jay Greene and Greg Forster, "Vouchers for Special Education Students: An Evaluation of Florida's McKay Scholarship Pro­gram," Manhattan Institute Civic Report No. 38, June 2003, at http://www.manhattan-institute.org/html/cr_38.htm (August 14, 2004).

[29] U.S. Department of Education, National Center for Education Statistics, "Trends in the Use of School Choice: 1993 to 1999," NCES 2003-031, May 2003, p. 25, at /static/reportimages/05BA3E4E0563E7096E8A4555D4D970C5.pdf (August 14, 2006).

[30] Jay P. Greene, Education Myths (Lanham, Md.: Rowman and Littlefield Publishers, Inc., 2005), pp. 150-154.

[31] Caroline Minter Hoxby, "Rising Tide," Education Next, Spring 2001, at http://www.educationnext.org/20014/68.html (August 14, 2006).

[32] Press release, "Florida Supreme Court Strikes Down School Choice," Institute for Justice, January 5, 2006, at http://www.ij.org/schoolchoice/florida/1_5_06pr.html (September 11, 2006).

[33] Jacqui Goddar, "After Setback, What's Next for Vouchers?" Christian Science Monitor, January 13, 2006, at http://www.csmonitor.com/2006/0113/p02s01-uspo.html (September 11, 2006).

[34] Richard D. Komer, "School Choice: Answers to Frequently Asked Questions About State Constitutions' Religious Clauses," Institute for Justice, updated March 2004, at /static/reportimages/AD4AC416225FA731340765D9C5CF4135.pdf (August 14, 2006).

[35] Ibid.

[36] U.S. Department of Education, Institute of Education Sciences, Implementation, Vol. 1 of National Assessment of Title I: Interim Report, NCES2006-4001, February 2006, p. 42, at /static/reportimages/10FCB80B5F76F411829B3F45722269D4.pdf (May 18, 2006).

[37] Dan Lips, "America's Opportunity Scholarships for Kids: School Choice for Students in Underperforming Public Schools," Heritage Foundation Backgrounder No. 1939, May 30, 2006, at /static/reportimages/F0BEBCF1B728743DBBF9B456BEB0FE20.pdf.

[38] U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, Digest of Education Statistics, 2005, Table 152, at http://nces.ed.gov/programs/digest/d05/tables/dt05_152.asp (September 11, 2006).

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