Oregon Legislature Should Give Kids a “Ticket to the Future” Today

By Kathryn Hickok and Steve Buckstein

Derrell Bradford has spent his adult life passionately advocating for education reform through parental choice. Bradford grew up in poverty in southwest Baltimore and received a scholarship that allowed him to attend a private high school, preparing him for college and a successful career. Better than anyone, he knows the power of educational choice to unleash a child’s potential.

“A scholarship is not a five-year plan or a Power Point…,” Bradford explained recently. “It’s a ticket to the future, granted today, for a child trying to shape his or her own destiny in the here and now….”

Choices in education are widespread in America, unless you are poor. Affluent families can move to different neighborhoods, send their children to private schools, and supplement schooling with enrichment opportunities. Lower- and middle-income families, however, are too often trapped with one option: a school in need of improvement assigned to them based on their ZIP Codes. Families deserve better.

Six years ago, Arizona became the first state to pass an Education Savings Account (ESA) law for some K-12 students. In April, lawmakers there passed a new ESA bill which expands the program eligibility to eventually include all Arizona children. Florida, Mississippi, and Tennessee also have ESA programs limited to certain students, such as those with special needs. Nevada also passed a near-universal ESA bill, but it is yet to be funded.

An Education Savings Account is analogous to a debit card for qualifying education expenses. It gives parents who want to opt out of a public school that is not meeting their child’s needs a portion of the per-student state funding to spend on their child’s education in other ways.

Now, Oregon has a chance to put parents in the educational “driver’s seat” with Senate Bill 437, known as the “Educational Opportunity Act: The Power of Choice.” This bill would allow parents to spend a portion of the per-student state funding for their child on the schools or education services that are best for them as individuals. Options could include private or home schools, tutors, online courses, and therapy. Funds not used by the student in a given year could be rolled over for future years, even into college.

Critics might ask if this bill would drain funds from public schools, or would it leave them harmless while allowing many students to make different choices? The answers depend on several assumptions which have been evaluated in a new review of a universal Oregon ESA program.

The amount of the ESA deposits is the biggest driver of fiscal impacts. Based on the assumptions in the study, the program would have a fiscal “break even” for state and local school districts combined at an annual ESA amount of $6,000 for each participating student with disabilities and/or in a low-income household and $4,500 for all other students. These are the dollar amounts proposed in an Amendment to the bill and represent a reduction from the current state allocation which averages $8,781 for all students.

Of course, fiscal impact is not and should not be the primary measure of this or any well-designed school choice program. But it is a political reality that such a program should not impose a fiscal burden on the state at a time when all budgets are under pressure. SB 437 would offer Oregon families as much choice as possible in how their children take advantage of educational opportunities funded by the state, while not harming public schools.

The Senate Education Committee will hold an informational hearing on SB 437 on Tuesday, June 13, at 3 pm at the Oregon State Capitol. You can make a statement in favor of school choice by attending the hearing and/or submitting written testimony on the bill.

Children have different needs and learn in different ways. The landscape of educational options available to meet those needs is more diverse today than ever. Education Savings Accounts for Oregon parents are a life-changing education solution whose time has come. Families have had enough five-year-plans and Power Points, as Derrell Bradford put it. To give Oregon kids a ticket to the future—today—the Legislature should enact Senate Bill 437.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. Steve Buckstein is Cascade’s Senior Policy Analyst and Founder. A version of this article originally appeared in The Portland Tribune on May 25, 2017.

Who says Oregon spends $13,230 per public school student? The National Education Association, that’s who!

By Steve Buckstein

Ever since Oregon’s property tax limitation Measure 5 shifted the bulk of education funding from local sources to the state general fund in 1990, public education advocates have claimed that our schools are severely underfunded, spending less than most other states. They want the legislature to raise taxes now to rectify this supposed crisis.

Ask a knowledgeable Oregonian how much money is spent per student in our public schools and they might say the number is about $8,781, which is what the state currently gives school districts per student.

But, ask the nation’s largest teachers union, the National Education Association, and you’ll get a much different answer. According to the NEAs just-released Rankings & Estimates report for 2016 and 2017, when you count local, state, and federal funding, current expenditures per Oregon student in Average Daily Attendance are estimated to be $13,230. That puts us five percent above the national average of $12,572. Oregon spends more than 33 other states.*

Add in spending for capital outlays and interest payments, and that $13,230 number goes up to total expenditures per student of $14,911.**

Even at the lower number, public schools spend over $396,000 a year for each 30-student classroom. Subtract the average teacher salary plus benefits of some $85,000, and Oregonians should ask where the additional $300,000-plus is going before even thinking about raising taxes on anyone.


* There are several ways to calculate current expenditures per student. The NEA computes two of those ways in this report. Definitions are given in the report Glossary. Oregon’s 2017 Average Daily Attendance (ADA) of pupils “under the guidance and direction of teachers” is estimated in Table I-3 to be 531,434. Oregon’s 2017 Fall Enrollment of pupils registered in the fall of the 2017 school year is estimated in Table I-6 to be 578,176. Because there are more pupils registered in school districts than actually in class on an average day, current expenditures per ADA of $13,230 (Table J-9) is higher than current expenditures per Fall Enrollment, which is $12,161 (Table J-10). Oregon spends more than 33 other states under both these methods.

** Under the two ways of calculating expenditures per student explained above, the author’s calculation of estimated 2017 total expenditures based on Average Daily Attendance of $14,911 is higher than that based on estimated Fall Enrollment, which is $13,705.


Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

Education Savings Accounts Treat Kids Like the Individuals They Are

By Kathryn Hickok

Six years ago, Arizona became the first state to pass an Education Savings Account law for some K-12 students. In April, lawmakers there passed a new ESA bill which expands the program eligibility to include all Arizona children. Florida, Mississippi, and Tennessee also have ESA programs limited to certain students, such as those with special needs. Nevada also passed a near-universal ESA bill, but it is yet to be funded.

Education Savings Accounts put parents in the educational “driver’s seat.” An ESA is analogous to a debit card for qualifying education expenses. It gives parents who want to opt out of a public school that is not meeting their child’s needs a portion of the per-student state funding for spending on their child’s education in other ways. Funds not used by the student in a given year can be rolled over for future years.

To really empower Oregon families, the Legislature should enact Senate Bill 437. This ESA bill would allow parents to choose the education that meets their child’s needs, such as private or home schools, tutors, online courses, and therapy.

Children learn in different ways, and the landscape of educational options is more diverse today than ever. Education Savings Accounts for Oregon parents are a life-changing education solution whose time has come.


The Senate Education Committee will hold an informational hearing on SB 437 on Tuesday, June 13, from 3-5 pm at the Oregon State Capitol. You can make a statement in favor of school choice by attending the hearing and/or submitting written testimony on the bill.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

Testimony Before the Oregon State Land Board Regarding the Potential Sale of the Elliott State Forest

By John A. Charles. Jr.

The decision before you today is simply one of exercising your fiduciary duty. You have an offer on the table of $220.8 million in private funds. If you accept the offer, the money will be deposited in the CSF, where it will immediately begin earning income for schools.

Alternatively, the various public ownership options require: (1) persuading the legislature to approve the sale of $100 million in state bonds so that taxpayers can “buy” an asset they already own; and (2) paying debt service on the bonds. Those costs (presently unknown) will be paid in part by public school parents, teachers, and other CSF beneficiaries. Therefore, debt service has to be subtracted from earnings on the invested $100 million.

Additionally, a new HCP will need to be negotiated. Since DSL has failed to do this for over 15 years, this is a highly speculative “benefit.” It’s also possible that even with a new HCP, timber harvesting would result in continued losses to the CSF.

As the chart below indicates, over a 100-year horizon, the difference between the Lone Rock offer and the public ownership option is roughly $1.08 billion in earnings. There is no plausible scenario in which continued public ownership can make up that loss. As fiduciaries, this is not even a close call: you should take the offer in hand.

CSF Financial Projections for New Revenue Derived from the Elliott State Forest 

Lone Rock Offer vs. Continued Public Ownership

Cumulative CSF Payouts to Schools @4% of Annual Earnings

Assumes total annual return of 5.58% (CSF average for 2000-2015)

  Add timber harvest revenue Subtract cost of debt service payments Cumulative payout to schools – first 10 years Cumulative payout to schools – first 100 years
L. Rock – $220.7 M invested 6/1/17 N/A N/A $99,107,680 $1,956,775,945
Bond sale – $100 M invested 9/1/17

 

Requires new HCP; could also result in annual losses ??? $44,300,595 $874,668,232
Difference ??? (???) ($54,807,085) (1,082,107,713)

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Oregon Land Board Should Take the Deal

By Lydia White

At a time when Legislators threaten to slash government services to cover a $1.6 billion budget shortfall, Governor Kate Brown and Treasurer Tobias Read plan to make things worse.

Next week, the State Land Board will meet to consider selling 84,000 acres of the Elliott State Forest to Lone Rock Timber Management for $221 million. If the sale is approved, all the money would be invested in the Common School Fund, generating billions of dollars in earnings for K-12 schools.

Governor Brown, who supported the sale in 2015, now wants the state to buy out the Elliott for $100 million by issuing bonds. Taxpayers would pay back the principal and interest for the next 25 years, at a cost of $120 million or more.

But the Land Board has a constitutional obligation to produce revenue for Oregon schools by either managing the Elliott for a profit or selling off dead assets. Forcing taxpayers to buy an asset they already own, plus forgoing $121 million in additional funds from a willing buyer and millions more when factoring in compound interest, would violate the Board’s fiduciary trust.

Fortunately, the Oregon School Boards Association, one beneficiary of the Common School Funds, expressed intent to sue if the Land Board refuses to “fulfill its fiduciary duties.”

The Board has a firm offer of $221 million. They should accept it.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Challenges to Free Expression and Academic Integrity on Campus

Join Cascade Policy Institute for an evening with special guest Dr. Jacqueline Pfeffer Merrill,

Monday, May 8, 2017 at the Crowne Plaza Portland-Lake Oswego, from 6:00-7:30 pm.

 

With a constant stream of headlines about campus disruptions and lightweight curricula, alumni are rightly concerned about the erosion of academic freedom and the decline of academic standards on American college campuses.  The evening’s presentation will spell out why the trends are so worrying and ways in which some intrepid college leaders, college trustees, and alumni donors are showing how to stand up for academic excellence and intellectual openness that the public demands.

Dr. Merrill is executive director of the Fund for Academic Renewal, a program of the American Council of Trustees and Alumni, which works with donors to create and monitor high-impact gifts to colleges and universities. ACTA is an independent, nonprofit organization committed to academic freedom, excellence, and accountability at America’s colleges and universities.

A dessert buffet with coffee and tea will be served.

There is no charge for this event, but reservations are required in advance.

If you have friends, family, or colleagues who may be interested in learning more about Cascade, please invite them as our guests.

For more information, and to reserve tickets, please click here.

Proposed Oregon ESA Law Would Offer Students Choices While Breaking Even for Public Schools

By Steve Buckstein

Senate Bill 437, under consideration this legislative session, would offer Oregon K-12 students the flexibility to choose the educational options that best meet their individual needs through a universal Education Savings Account program. ESAs deposit a percentage of the funds that the state otherwise would spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds for approved educational expenses such as tuition, tutors, online courses, and other services and materials.

The fiscal impact of a universal ESA program for Oregon has been evaluated in an analysis released by Cascade Policy Institute. The fiscal “break even” for state and local school districts would be reached at an annual amount of $6,000 for each participating student with disabilities and/or in a low-income household and $4,500 for all other students. These dollar amounts are proposed in an amendment to the bill.

Of course, fiscal impact should not be the primary measure of this or any well-designed school choice program; but it is a political reality that a fiscal burden should not be imposed on the state at a time that all budgets are under pressure. An ESA program would offer Oregon families as much choice as possible in how their children take advantage of educational opportunities funded by the state. For more about the Educational Opportunity Act: The Power of Choice, visit schoolchoicefororegon.com.


Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

Education Savings Accounts Can Help Students Without Hurting Public Schools

By Steve Buckstein

School choice programs allow students to choose schools or other educational resources and pay for them with a portion of the tax funding that otherwise would go to the public school assigned to them by their ZIP code.

While school choice is popular with large segments of the public, opponents often claim specific programs like vouchers or Education Savings Accounts (ESAs) drain funds from the public school system, and so must be rejected.

What opponents overlook is that public funding for K-12 education should actually help educate students, not simply fund specific schools whether or not they meet specific student needs.

The latest and most versatile school choice programs sweeping the country are Education Savings Accounts. ESAs deposit a percentage of the funds that the state otherwise would spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds for private school tuition or other approved educational expenses such as online learning programs, private tutoring, community college costs, higher education expenses, and other customized learning services and materials. Funds remaining in the account each year after expenses may be “rolled over” for use in subsequent years, even into college.

Here in Oregon, this school choice debate will center upon the latest proposal to offer all K-12 students many more educational options: a universal Education Savings Account program contained in Senate Bill 437. SB 437 is also known as the Educational Opportunity Act: The Power of Choice.

So, will this bill drain funds from public schools, or will it leave them harmless while allowing many students to make different choices? The answers depend on several assumptions which have now been evaluated in a new review and evaluation of a universal ESA program for Oregon.

The amount of the ESA deposits is the biggest driver of fiscal impacts. As introduced, SB 437 would provide participating students with disabilities and in low-income households $8,781 per year (current state funding) in their ESAs. All other participating students would receive $7,903 (90% of current state funding).

As Introduced, based on the assumptions below, the Fiscal Impact on the state and local school districts could be in the range of $200 million annually based on the following assumptions:

■ 90 percent of 61,000 students currently enrolled in non-public education would participate in the program.
■ Seven percent of 563,000 students currently enrolled in public schools would participate.

Based on these assumptions, the program has a fiscal “break even” for state and local school districts combined at an ESA annual amount of $6,000 for each participating student with disabilities and/or in a low-income household and $4,500 for all other students. These are the dollar amounts proposed in the -1 Amendment to the bill.

The Figure below shows the net fiscal impact on state and local budgets across a range of ESA amounts, again based on the assumptions above. 

If fiscal impact were the only measure by which to evaluate this ESA program, the Figure shows that the program is “optimized” at an amount of $3,000 for each participating student with disabilities and/or in a low-income household and $2,250 for all other students. Once fully implemented, the program would save state and local governments $53 million a year.

Figure:

ESA_FIGURE

Of course, fiscal impact is not and should not be the primary measure of this or any well-designed school choice program; but it is a political reality that such a program should not impose a fiscal burden on the state at a time that all budgets are under pressure.

The primary measure of this ESA program should be that it offers Oregon families as much choice as possible in how their children take advantage of educational opportunities funded by the state.

The full report, Education Savings Accounts: Review and Evaluation of a Universal ESA in Oregon, can be found online here.


Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

New Report Analyzes Fiscal Impact of Proposed Oregon Educational Opportunity Act

— Education Savings Account (ESA) program awaits Senate action

April 13, 2017

Media Release

FOR IMMEDIATE RELEASE

Media Contact:
Steve Buckstein
503-242-0900
steven@cascadepolicy.org 

PORTLAND, Ore. – Cascade Policy Institute today released a review and evaluation of a universal Education Savings Account (ESA) program for Oregon. Senate Bill 437 would cover all K-12 students and is awaiting a hearing in the Senate Education Committee. SB 437 is also known as the Educational Opportunity Act: The Power of Choice.

ESAs deposit a percentage of the funds that the state otherwise would spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds for private school tuition or other approved educational expenses such as online learning programs, private tutoring, community college costs, higher education expenses, and other customized learning services and materials. Funds remaining in the account after expenses may be “rolled over” for use in subsequent years, even into college.

Empirical research on private school choice finds evidence that private school choice delivers benefits to participating students—particularly in the area of educational attainment.

Currently, Arizona, Florida, Mississippi, and Tennessee have active ESA programs that are limited to particular groups of students such as those with special needs. Nevada passed a near-universal ESA bill in 2015, but it is yet to be funded. Last week, Arizona lawmakers passed a new ESA bill that will open their state’s ESA program to all Arizona children, phased in over the next few years.

A fiscal analysis of Oregon’s SB 437, as introduced, finds that it would have a net fiscal impact on the state and local school districts of approximately $200 million. This net impact can be reduced—and turned into a net cost saving to state and local governments—by adjusting the annual amount deposited into the ESAs. The program would “break even” at an amount of $6,000 for each participating student with disabilities and/or in a low-income household and $4,500 for all other students. These are the dollar amounts suggested in an Amendment to SB 437.

Cascade founder Steve Buckstein notes, “While vouchers may be considered the rotary telephones of the school choice world, Education Savings Accounts are the smartphones of that world. They offer many more opportunities for families and students, and introduce competitive forces into education finance, which may help keep costs down.”

The full report, Education Savings Accounts: Review and Evaluation of a Universal ESA in Oregon, can be found online here.

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org and schoolchoicefororegon.com.

###

Arizona’s Universal Education Savings Account Law: A “Breakthrough” in Education Financing for Students Today

By Kathryn Hickok

Six years ago, Arizona became the first state to pass an Education Savings Account law for some K-12 students. Last week, Arizona lawmakers passed a new ESA bill which expands the program eligibility to include all Arizona children, phased in over the next few years.

The Heritage Foundation’s education policy fellow Lindsay Burke explains:

Education savings accounts represent a breakthrough in public education financing. Instead of sending funding directly to district schools, and then assigning children to those schools based on where their parents live, parents receive 90 percent of what the state would have spent on their child in their district school, with funds being deposited directly into a parent-controlled account.

Parents can spend the money on the educational services that best meet their children’s individual needs, such as private or home schools, tutors, online courses, and therapy. Funds not used by the student in a given year can be rolled over for future years.

Florida, Mississippi, and Tennessee also have ESA programs limited to particular groups of students, such as those with special needs. Nevada passed a near-universal ESA bill in 2015, but it is yet to be funded.

“When parents have more choices, kids win,” said Arizona Governor Doug Ducey. It’s time for Oregon parents to have those choices, too. For more information about Oregon’s Education Savings Account bill, under consideration this legislative session, visit schoolchoicefororegon.com.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

 

1 2 3 19