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Research & Commentary: Universal ESA Bill Could Make Oregon a National Leader in Education Choice

February 14, 2017

ESA Would Pay For Tuition, Textbooks, Tutoring Services, Educational Therapies

Oregon is considering a proposal that would establish the Education Savings Program Fund, a universal education savings account (ESA) program. If passed, ESAs would be available to parents of public school children to pay for tuition and fees at private and parochial schools. The funds could also be used to pay for textbooks, tutoring services, computers and other approved hardware, online courses, and educational therapies and services. Additionally, the ESAs could be used to cover the fees required to take national standardized achievement tests, such as the SAT and ACT.

For children with disabilities and those whose parents’ household income falls below 185 percent of the federal poverty level, funding for each ESA would equal 100 percent of Oregon’s statewide average distribution. For all other qualifying children, funding would equal 90 percent of the statewide average distribution. Leftover funds would carry over each year of the child’s eligibility for the program.

Only 37 percent of Oregon 4th graders and 34 percent of 8th graders tested “proficient” in math on the 2015 National Association of Education Progress (NAEP) test, also known as the “Nation’s Report Card.” Only 34 percent of 4th graders and 36 percent of and 8th graders tested proficient in reading. These results show Oregon’s public school system is failing to educate roughly 7 out of 10 of their 4th grade and 8th grade students to a proficient level in reading and mathematics.

Oregon’s troubling performance on NAEP underscores the desperate need for the state to expand school choice opportunities far beyond what is currently available. Too many public schools in Oregon are failing to adequately prepare students for productive lives. Parents should be allowed to choose the schools their children attend and should not be penalized financially if that choice is a private religious or secular school.

In May 2016, EdChoice released a report in which it examines 100 empirical studies of school choice programs. Eighteen of these studies used random assignment to measure outcomes, referred to in academia as the “gold standard.” According to the EdChoice report, “Students who apply for a voucher enter randomized lotteries to determine who will receive the voucher and who will remain in a public school; this allows researchers to track very similar ‘treatment’ and ‘control’ groups, just like in medical trials.” The overwhelming majority of the available empirical evidence shows education choice offers families equal access to high-quality schools that meet their widely diverse needs and desires, and, according to the research, it does so at a lower cost. EdChoice also found education choice also benefits public school students. 

“The results are not difficult to explain,” the study says. “School choice improves academic outcomes for participants and public schools by allowing students to find the schools that best match their needs and by introducing healthy competition that keeps schools mission-focused. It saves money by eliminating administrative bloat and rewarding good stewardship of resources [and it] breaks down the barriers of residential segregation, drawing students together from diverse communities.”

Currently, private school choice in Oregon is literally nonexistent. Establishing a universal ESA program would put the Beaver State at the forefront of the education choice movement and would give all Oregon families a greater opportunity to meet each child’s unique education needs. When parents are given the opportunity to choose, every school must compete and improve, which gives more children the opportunity to attend a quality school.

The following provides more information on education savings accounts and education choice.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
https://www.heartland.org/publications-resources/publications/a-win-win-solution-the-empirical-evidence-on-school-choice-fourth-edition?source=policybot
This paper by the Friedman Foundation for Educational Choice 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.

2016/17 School Choice Report Card
https://www.heartland.org/publications-resources/publications/201617-school-choice-report-card
This report card published by the American Federation for Children scores 27 active non-special-needs voucher, scholarship tax-credit, and education savings account programs against ideal standards for program quality. The report is an excellent tool policymakers and researchers can use to help improve education programs and maximize student participation. 

Research & Commentary: Indiana School Choice Parental Satisfaction Should Lead to More School Choice
https://www.heartland.org/publications-resources/publications/research--commentary-indiana-school-choice-parental-satisfaction-should-lead-to-more-school-choice?source=policybot
In this Research & Commentary, Heartland Policy Analyst Tim Benson examines an expanded, follow-up study to a 2014 report by EdChoice that examines why Indiana parents choose to take advantage of the state’s Choice Scholarship Program voucher and use it to send their children to private schools.

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.

Recalibrating Accountability: Education Savings Accounts as Vehicles of Choice and Innovation
https://www.heartland.org/publications-resources/publications/recalibrating-accountability-education-savings-accounts-as-vehicles-of-choice-and-innovation?source=policybot
This Special Report from The Heritage Foundation and the Texas Public Policy Foundation explores how education savings accounts expand educational opportunities and hold education providers directly accountable to parents. The report also identifies several common types of regulations that can undermine the effectiveness of the program and how they can be avoided.

The Fiscal Effects of School Choice Programs on Public School Districts
https://www.heartland.org/publications-resources/publications/the-fiscal-effects-of-school-choice-programs-on-public-school-districts?source=policybot
In the first-ever study of public school districts’ fixed costs in every state and Washington, DC, Benjamin Scafidi concludes approximately 36 percent of school district spending cannot be quickly reduced when students leave. The remaining 64 percent, or approximately $8,000 per student on average, are variable costs, changing directly with student enrollment. This means a school choice program attaching less than $8,000 to each child who leaves a public school for a private school actually leaves the district with more money to spend on each remaining child. In the long run, Scafidi notes, all local district spending is variable, meaning all funds could be attached to individual children over time without creating fiscal problems for government schools.

How School Choice Programs Can Save Money
http://www.heritage.org/Research/Education/wm727.cfm 
This Heritage Foundation study of the fiscal impact of voucher programs notes Washington, DC vouchers cost only 60 percent of what the city spends per pupil in government schools. The study estimates if the states with the top eight education expenditures per pupil adopted voucher programs similar to the Washington, DC program, they could save a combined $2.6 billion per year.

How School Choice Can Create Jobs
https://www.heartland.org/publications-resources/publications/how-school-choice-can-create-jobs?source=policybot
Examining five South Carolina counties, Sven R. Larson found school choice programs were associated with gains of up to 25 percent in youth self-employment. Larson writes, “School Choice raises academic achievement and reduces the problems and costs associated with high school dropouts. But it also has a decisively positive impact on youth entrepreneurship and could provide a critical boost for the economies of poor, rural counties.”

 

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 Nathan Makla, Heartland’s state government relations manager, at nmakla@heartland.org or 312/377-4000.

Author
Tim Benson (tbenson@heartland.org) joined the Heartland Institute in September 2015 as a policy analyst in the government relations department.
TBenson@heartland.org