Americans have decided, as a society, to use taxes to finance some or all of the schooling of children regardless of their parents’ ability to pay tuition at private schools. This creates a potential conflict with the right of parents to control the education of their children. With certain precautions, that conflict can be addressed by allowing tax dollars to follow the child to whatever school his or her parents choose.
Current funding practices empower bureaucracies
About half of the taxes collected for education flow from taxpayers to federal or state departments of education, and from there to local school districts and finally to public schools and teachers. Local property taxes typically go to local school districts or to state agencies for redistribution to “property poor” school districts. Because of bureaucracy, two of every five tax dollars raised for schools do not even make it to the classroom (Bonsteel and Brodt 2000).
This system concentrates authority in the hands of small groups of largely unelected officials, often far removed from the classroom. Over time, this system has become heavily bureaucratic, wasteful, and resistant to change (Tyack 1974). Funding follows a different set of rules in the private school sector. There, parents pay tuition directly to the educators they choose for their children, so funds automatically follow the child. The freedom to choose motivates parents to study their choices closely and let educators know what kinds of schools they want. Competition for tuition leads educators to modify and improve their offerings, and unnecessary and expensive bureaucracies are not tolerated.
Funding should follow the student
The way public schools are funded can be made to more closely resemble private school funding by requiring that tax dollars follow the student to the school chosen by his or her parents or guardians. Two ways to do this are choice scholarships (or “vouchers”) and tuition tax credits.
Under a voucher plan, parents are allowed to choose the schools they consider best for their children and receive tax-funded vouchers or certificates good for tuition (up to some set amount) at participating schools (Walberg and Bast 2003, Hakim et al. 1994, Friedman and Friedman 1980). Schools then compete for students. The worth of the voucher, which schools may participate in the program, and what kinds of regulations should be imposed on participating schools are choices to be made during the school choice program’s design process. (See the principles below for specific legislative suggestions.)
The second way is to provide tax relief to parents who pay tuition to private schools or to individuals and corporations who make donations to pay for private school tuition (Olsen and Brouillette 2000, Anderson et al. 1997). Illinois, Iowa, and Minnesota have laws that allow taxpayers to get back from their state governments some part of the amount they spend on private school tuition. Arizona, Florida, and Pennsylvania offer tax credits to corporations and individuals who finance scholarships for children from low-income families.
Voucher programs are already widespread
Giving public funds to consumers in the form of vouchers is not a radical idea. Existing voucher programs include food stamps, low-income housing vouchers, the GI Bill and Pell Grants for college students, federal day-care grants, and Social Security (Savas 2000). Social Security, for example, distributes about $400 billion annually to millions of seniors to spend as they wish. The seniors spend their retirement tax dollars on the goods and services of their choice, including donating some to charities, churches, temples, and mosques. Yet there are no complaints that Social Security leads to excessive regulation of stores frequented by seniors or threatens to violate the separation of church and state.
There can be little doubt that the schools parents would choose under a school choice program would be different from those currently funded with tax dollars. The 2004 Phi Delta Kappa International/Gallup Poll found 57 percent of parents with children now attending public schools would send them to private schools if vouchers were available (Clowes 2004c). A survey by Public Agenda (1999) found 55 percent of all parents and 67 percent of inner-city parents of public school students would choose private schools if tuition was not a concern. The Harwood Group (1995) found about 80 percent of African-American families would choose private schools.
For more information on school vouchers and other free-market reforms, read The 10 Principles of Education Policy by The Heartland Institute (PDF).