January 2016 – Education Savings Accounts

What are Education Savings Accounts (ESAs)?

Education Savings Accounts are taxpayer funded, privately managed accounts that families who opt out of public schools can use to pay educational expenses for their children. Voucher programs use public funds to pay for private school tuition. ESAs expand the use of taxpayer dollars and can be used not only for private school tuition, but also for religious school tuition, tutoring, textbooks, therapists, home school expenses, and more.

Where are ESAs being used?

The only state that has implemented ESAs is Arizona. An Arizona Supreme Court decision ruling that voucher funds could not be used to educate special needs and foster students in private or religious schools prompted the creation of an “empowerment scholarship account” program.

Two other states, Ohio and Florida, rejected the establishment of ESAs, fearing that such a program would undermine public education and effectively create two school systems, one public and one private—both funded by taxpayers.

What are the Concerns Over ESAs?

Like health savings accounts, a “you’re on your own” ESA strategy is a very risky way to account for how we use our tax dollars and how we educate our children. There is no evidence that unregulated school alternatives offer a higher quality education for students. Specifically:

Diversion of funds from public schools will harm our classrooms. A loss of dollars threatens academic programs and teaching staff. Families already planning to pay for the cost of private schooling will receive what is essentially a free gift from taxpayers—without having to account for how money is spent, or how students perform.
Lack of financial accountability. ESA programs divert local tax dollars back to the state, and then on to largely unregulated private entities that run charter and private schools. Taxpayers do not “see” how the money is used or who is spending it.
Lack of academic accountability. Private and charter schools do not have to hire licensed teachers, and are not subject to the academic standards imposed on public schools. Many charters pay teachers little and experience high turnover.
ESAs help fund separate and unequal education. Private and charter schools are not required to serve free/reduced lunch, offer transportation, or provide special education services. Using public dollars to fund schools that cannot offer a sound and basic education to all students violates the NC Constitution.
ESAs favor the wealthy. The median average private school tuition is $19,820; An ESA program is likely to be funded at 90% of North Carolina’s public school rates, or about $7,600. Even with a taxpayer funded subsidy, most middle class families cannot afford to pay the difference between the subsidy and the high cost of a private school education.
Private schools can select the students they admit. Will your child make the cut?
Cost of oversight. The resulting uncontrolled growth of new charter and private schools demands careful monitoring to ensure standards for schools accepting ESA funds are met. The price to develop and administer such standards is significant and adds to taxpayer costs for education–without adding any resources to the classroom.

What is Needed

All parents want the very best educational options for their children. ESA programs are promoted under the guise of “choice,” but plunge families into a chaotic decision making process with uncertain academic outcomes. Diverting money from our already underfunded public schools makes it harder for them to be successful, gambles with tax dollars, undermines our state constitution, and threatens the very existence of public education in North Carolina.

NC’s public schools are an excellent value for taxpayers and students. Rather than diverting tax dollars away from public schools, we should be adequately funding them to create smaller class sizes, hire more specialized resources, and enhance all programs to meet the high expectations of parents.

More Information on Education Savings Accounts

National Association of Independent Schools Facts at a Glance

http://www.nais.org/Statistics/Documents/NAISFactsAtAGlance201112.pdf

National Conference of State Legislators, Tuition Tax Credits

http://www.ncsl.org/issues-research/educ/school-choice-scholarship-tax-credits.aspx

National Conference of State Legislators, School Voucher Laws: State-by-State Comparison

http://www.ncsl.org/issues-research/educ/voucher-law-comparison.aspx

National Education Policy Center, Review of The Way of the Future: Education Savings Accounts for Every American Family

http://nepc.colorado.edu/thinktank/review-ESA

Rethinking Schools, Commonly Asked Questions About School Choice and Vouchers,

http://www.rethinkingschools.org/special_reports/voucher_report/vouchersorig/vq&a.shtml

CALDER Urban Institute, Competitive Effects of Means-Tested School Vouchers,