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Research & Commentary: Time is Now for Empowerment Scholarship Accounts in Missouri

January 15, 2019

Program Could Save Missouri School Districts Over $39 Million Per Year

Joint legislation introduced in the Missouri General Assembly 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 the proposed 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. The space for Empowerment Scholarship Account students is readily available, as another Show-Me Institute report estimates there are 28,000 open seats available in Missouri private schools.

Copious empirical research on ESAs, their sister voucher programs, and tax-credit scholarships finds these programs offer families improved access to high-quality schools that meet their children’s unique needs and circumstances. Moreover, these programs improve access to schools that deliver quality education inexpensively. Additionally, these programs benefit public school students and taxpayers by increasing competition, decreasing segregation, and improving civic values and practices. Students at private schools are also less likely than their public school peers to experience problems such as alcohol abuse, bullying, drug use, fighting, gang activity, racial tension, theft, vandalism, and weapon-based threats. 

It is probably for these reasons that ESAs are more popular with parents than ever before. The results of EdChoice’s sixth annual Schooling in America survey, released in December 2018, found 74 percent of respondents favor ESAs, up 3 percentage points from 2017. According to the survey, support for ESAs is 76 percent among Millennials, 72 percent for those with incomes under $40,000 a year, 79 percent for blacks, 70 percent for Hispanics, 72 percent among self-identified Democrats, and 77 percent among independents. Furthermore, 78 percent of public school teachers surveyed support ESA programs.

The school a child attends should not be determined solely by his or her ZIP code. However, this is currently the case for almost all Missouri children. The goal of public education in the Show Me State should be to enable all parents, no matter their income level, to choose which schools their children attend.

Public schools should not hold a monopoly on education. By implementing the Missouri Empowerment Scholarship Accounts Program, can help ensure more Missouri children have the opportunity to attend a quality school.

The following documents provide more information on education savings accounts.

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.

Available Seats 2.0: Opportunities Abound with School Choice
https://showmeinstitute.org/publication/school-choice/available-seats-20-opportunities-abound-school-choice
This Show-Me Institute report estimate that there are more than 28,000 available seats in Missouri’s currently-operating private schools and that a well-designed private school choice program could save the state a significant amount of money.

Education Savings Accounts: The Future of School Choice Has Arrived
https://www.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.

2018 Schooling in America Survey: Public Opinion on K–12 Education, Parent and Teacher Experiences, Accountability, and School Choice
https://www.edchoice.org/wp-content/uploads/2018/12/2018-12-Schooling-In-America-by-Paul-DiPerna-and-Michael-Shaw.pdf
This annual survey from EdChoice, 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.

Protecting Students with Child Safety Accounts
https://www.heartland.org/publications-resources/publications/protecting-students-with-child-safety-accounts
In this Heartland Policy Brief, Vicki Alger, senior fellow at the Independent Women’s Forum and research fellow at the Independent Institute, and Heartland Policy Analyst Tim Benson detail the prevalence of bullying, harassment, and assault taking place in America’s public schools and the difficulties for parents in having their child moved from a school that is unsafe for them. Alger and Benson propose a Child Safety Account program, which would allow parents to immediately have their child moved to a safe school – private, parochial, or pub­lic – as soon as parents feel the public school their child is currently attending is too dangerous to their child’s physical or emotion­al health.

The Effects of School Choice on Mental Health
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3272550
This study from Corey DeAngelis at the Cato Institute and Angela K. Dills of Western Carolina University empirically examines the relationship between school choice and mental health. It finds that states adopting broad-based voucher programs and charter schools witness declines in adolescent suicides and suggests that private schooling reduces the number of times individuals are seen for mental health issues.

Competition: For the Children
https://www.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.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
https://object.cato.org/sites/cato.org/files/pubs/pdf/pa830.pdf
This Policy Analysis from the Cato Institute examines the effect increased access to private schooling has had on international student test scores in 52 countries. The Cato researchers found that a 1 percentage point increase in the share of private school enrollment would lead to moderate increases in students’ math, reading, and science achievement.

 

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 Lindsey Stroud, Heartland’s government relations manager for Missouri, at lstroud@heartland.org or 312/377-4000.

Author
Tim Benson joined The Heartland Institute in September 2015 as a policy analyst in the Government Relations Department.
TBenson@heartland.org @BenceAthwart