Who says Oregon pays public school teachers more than other states? The National Education Association, that’s who!

By Steve Buckstein

As Oregon legislators wrestle with how much money to spend on public education, advocates claim that we spend too little compared to other states. They demand that legislators spend more, and raise taxes to do it. But, according to the nation’s largest teachers union, the reality is quite different.

As I noted recently, in its Rankings & Estimates report for 2016 and 2017, the National Education Association says that Oregon spends more per student than 33 other states: $13,320 per Average Daily Attendee versus $12,572 nationally.

Another interesting finding in the NEA report is how much Oregon pays its public school teachers. In 2015-16 it shows the average teacher salary in the country was $58,343, compared to $60,459 here in Oregon. We spend three percent more on teacher salaries than the national average.*

But, the report also shows that our per capita personal income is nine percent less than the national average: $48,783 versus $43,783.

So, while we pay our teachers three percent more, we do that out of incomes that are nine percent less than the average American. Add those two numbers together, and it’s clear that based on our ability to pay we compensate Oregon teachers very well.

All this data add weight to the argument that we don’t need new taxes to better fund public education. We fund it very well already.


*“Where applicable, ‘average teacher salary’ includes the contract amount plus 6 percent for the employer portion of retirement contributions.” Page 146 of the NEA report.


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

Education Savings Account Informational Hearing Testimony in Favor of SB 437

Before the Senate Education Committee

By Steve Buckstein
Cascade Policy Institute

Chair Roblan and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and Founder at Cascade Policy Institute, a public policy research organization based in Portland.

I want to share some thoughts about the value of Education Savings Accounts in general, and SB 437 in particular, which we’ve branded the Educational Opportunity Act: The Power of Choice.

Next, Professor Eric Fruits will briefly discuss the Fiscal Impacts of the bill.

Finally, you’ll hear from Oregon’s 2012 Mother of the Year, Bobbie Jager, about the importance of providing different educational options for different children.

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 worry that specific programs like vouchers or Education Savings Accounts may drain funds from the public school system.*

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

The latest and most versatile school choice programs being enacted across the country are Education Savings Accounts. Unlike vouchers, which only let parents pay for private school tuition, ESA funds may also be used for other approved educational expenses, such as online learning programs, private tutoring, community college costs, and other customized learning services and materials.

Also, while voucher funds all go to private school tuition or are lost to the families, funds remaining in ESA accounts each year may be “rolled over” for use in subsequent years, even into college. This creates incentives for families to “shop” for the best educational experiences at the lowest cost, as well as incentives for schools and educational programs to price their services as low as possible, not as high as possible as might be done under a voucher program.

Five states already have limited ESA programs. Nevada passed a near-universal ESA program in 2015, but its legislature has yet to fund it. In November 2015 your Committee heard from the author of that bill, 16-year public school teacher and state senator Scott Hammond. He told you that he viewed vouchers as the rotary telephones of the school choice world, and that ESAs are the smartphones of that world.

Vouchers just let parents choose a different school, but ESAs offer the equivalent of apps on your smartphone. You can use ESA funds for tuition at a private school, to pay for online courses, pay for tutors, pay for a Sylvan Learning type program, and/or pay for other approved educational options. A student is free to spend part-time at their local public school, and the rest of the time making other educational choices with the proportional share of their ESA funding.

In 2008, Cascade Policy Institute sponsored a School Choice Video Contest in which we asked parents and students to tell us what school choice meant to them. I want to show you one of my favorite entries. It’s from a 15-year-old homeschooled student in Southern Oregon.

[Shoes video]

If the Shoe Fits, Wear It! This legislature is about to allocate at least $8.2 billion taxpayer dollars to an education budget that may, in effect, fund shoes that aren’t a good fit for many of our children. ESAs would help some of those families find better-fitting shoes for their kids.

In addition to funding concerns, some critics of ESAs argue that they violate the principle of church/state separation. In Oregon, they might think that SB 437 violates Article 1, section 5 in our state constitution, which basically prevents the state from spending money for the benefit of any religious institution.

But it won’t! The public interest law firm Institute for Justice has studied the bill and concluded that it doesn’t violate either the Oregon or the U.S. Constitution. You have their complete legal analysis on OLIS.

Briefly, at the federal level, the 2002 Zelman Case before the Supreme Court found that as long as it’s the parents, not the state, deciding where a school choice program’s funds go, it doesn’t matter if the parents choose religious schools because it’s the parents, not the state, making those choices.

At least two state supreme courts, in Arizona and Nevada, have found the same thing with regard to ESAs and those state constitutional provisions, which are similar to Oregon’s so-called Blaine Amendment.

Now, let me give you a feel for how much more flexibility ESAs offer over the old voucher plans, and why they’ve sprung up so recently.

It wasn’t too long ago that if our parents or grandparents wanted to make a phone call they would pick up the receiver and ask a phone company operator to place their calls. Later, how glorious it was that we could use our rotary phones to spin out our own calls, even long-distance ones if we could afford the high per-minute costs. Then came digital phones, and finally cell phones became affordable to the masses. But even the early cell phones had limited uses.

You may not remember, but none of us had any cell phone apps before 2008, because there weren’t any. None. Imagine: All you could do on your cell phones before 2008 was make phone calls, maybe text, and maybe connect to the World Wide Web on a slow internet connection.

Just nine years later, over 2 billion people worldwide use apps on their smartphones. You may have dozens of apps on your phone today, and even if you only use a handful of them regularly, that’s a world away from what it was like before 2008. Lots of things are a world away from what they were like before 2008 — except for public education.

Consider the children in our schools today. Many of them have never known a world without smartphones and their apps. Rotary telephones, even landlines, are likely just historical oddities to them. Much of their world is new, except the way we adults try to educate them by sitting them down in rows, in a classroom with kids who are the same age, all in front of one teacher lecturing about some subject they may or may not find interesting and relevant to their lives.

Yet, many teachers see kids’ smartphones as a problem, right? They’re watching their screens instead of sitting politely in rows listening to the math lesson at 10, or the history lesson at 2.

We say that we want our kids to learn how to take advantage of technology, take STEM courses, and be prepared for the new careers awaiting them. So why do we see their use of that technology every day as a problem! They’re not paying attention to the teacher! They’re bored with school. The Shoes we make them wear aren’t good fits for many of them.

We know that they’ll likely find value in many of these subjects later in life, but if they can’t learn those lessons in ways that are relevant to them now, they may never learn them at all; or they may learn them too late to avoid painful life experiences between now and then.

In 2007, the House Subcommittee on Education Innovation, chaired by Representative Betty Komp, heard compelling testimony about some of those kids during a hearing on an earlier school choice bill, HB 2010. It was given by Black Portlander Jomo Greenidge, who describes himself as an educator and technologist.

Jomo can’t be here to talk with you today, but he hopes you’ll watch his earlier testimony and think about how Education Savings Accounts could help kids like these today.

[Jomo Greenidge video testimony]

Since Jomo gave that testimony in 2007, smartphone apps emerged, followed by Education Savings Accounts, which act much like smartphones of the school choice world. Many students in our schools today, and all the kids entering our schools tomorrow, will grow up in a world with modern communication and app technology.

It’s time we recognize that much of the money we tax and spend on their educations might not be meeting their educational needs. It’s time that we consider the Education Savings Account approach to let their families have some control over how that money is spent so it better meets their needs.

Other states have debated, and some are adopting, ESA programs this year. The pressure to pass more such bills will only grow.

We know that SB 437 won’t pass this year. While we’re thankful for this Informational Hearing, many Oregon families want more. Many Oregon families can’t wait for years to get their kids into better fitting Educational Shoes.

We can debate the details, but please take this issue seriously and help these families by passing an ESA bill soon, hopefully in the 2018 session.

Thank you.


* A 2009 scientific survey showed us that 87 percent of Oregon families with school-aged children want the ability to choose other than their local public school. And the results were similar for Republicans, Democrats, and Independents. So why do some 90 percent of them still send their kids to their local public school? You know why. It’s because they can’t afford to pay federal, state, and local taxes to fund that local school and pay for private school tuition at the same time. ESAs will give them the financial ability to make some other choices if they want to.

And, if 20 percent of Portland public school teachers send their kids to private schools, why would we think that 20 percent of their neighbors might not want to do the same, if they could afford it?

Based on data from the 2000 US Census, a report was published looking at where public school teachers sent their own kids to school in the nation’s 50 largest cities. It found that public school teachers send their own kids to private schools at much higher rates than their neighbors.

In Portland, 12.7 percent of parents sent their kids to private schools, but 20 percent of public school teachers who lived in Portland sent their kids to private schools. Doing some basic grade school math shows that teachers in the largest cities were 23 percent more likely to send their children to private schools, but in Portland they were 57 percent more likely to do so.

So, will SB 437 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 by Eric Fruits, Ph.D. 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. If fiscal impact were the only measure by which to evaluate this ESA program, the analysis 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.

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 is here: Education Savings Accounts: Review and Evaluation of a Universal ESA in Oregon

Testimony in Opposition to HB 2720 A Regarding Virtual Charter Schools

By Steve Buckstein

Co-Chairs Monroe and Smith Warner and members of the Joint Committee on Ways and Means Subcommittee on Education:

I’m Steve Buckstein, Senior Policy Analyst and Founder of Cascade Policy Institute, a public policy research center based in Portland. I’m writing in opposition to HB 2720 A which would require the Oregon Department of Education (ODE) to conduct a study on virtual public charter schools.

My major points of opposition second those of Dr. David Gray, Executive Director of the Metro East Web Academy. He “…served in traditional public education for over 30 years as a state department executive, superintendent, assistant superintendent, National Blue Ribbon School Principal, and a state and nationally recognized teacher.”  In his written testimony submitted on March 3rd he stated, in part:

“I share your passion for public education. Unfortunately, the traditional education system is broken….Traditional systems are effective for some students but not all and many of those succeed in spite of the good intentions of professional educators This is why we must not limit options for students.

“Although HB 2720’s purpose seems innocuous as some would perceive it to just be a study; it is actually one more study to examine a system of virtual schools that have been studied over and over throughout the United States. In fact, the study purports to use the same data points that are readily available on the ODE website, which will undoubtedly include metrics such as graduation rates, state assessment results, and attendance data. I can not think of a bigger waste of taxpayer dollars, especially in a year when resources are scarce and legislators are scrambling to create an adequate educational budget.

“Ultimately, if it is important to study virtual schools – why don’t we do a study on all of our high schools to determine why students are leaving traditional high schools and coming to charter schools? Why are there so many at-risk students? Do traditional brick and mortar schools add value to a student’s education? Do we know the answers to these questions?” [emphasis added]

In light of these well-stated concerns, HB 2720 A seems a costly distraction that could keep the legislature, ODE and all Oregonians from focusing on the real problems facing our public education system.

I urge you to oppose HB 2720 A.

Thank you,

Steve Buckstein
Senior Policy Analyst and Founder

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 NEA’s 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.

Kicker Envy 2017

By Steve Buckstein

Individual Oregon income taxpayers may receive kicker refunds when they file their 2017 tax returns based on a percentage of the state income tax they paid in 2016. Based on the May revenue forecast, $408 million could be coming back to taxpayers, with the average refund being $210. A final determination of whether the kicker will “kick” and how big it will be should be announced on August 23.

But even before those potential refunds reduce our 2017 tax liability, some are questioning whose money it is, and others seem envious that the “rich” will get much bigger refunds than the rest of us. So, whether the kicker law is good or bad public policy, let’s think a little about who this money really belongs to. Is it a rebate for overpaying your taxes, or is it somehow “our” money that is better left in government coffers?

How the kicker works 

First, the mechanics of the kicker law: Oregon state government is highly dependent on the personal income tax for its General Fund budget. With a fairly flat tax structure, most wage earners are in the nine percent income tax bracket, while the highest income earners are in the top 9.9 percent bracket. Therefore, state revenue can be quite volatile, going up and down as the economy cycles between boom and bust.

The legislature first passed the kicker law in 1979, and voters added it to the state constitution in 2000. It mandates that state economists estimate what income tax revenue will be over the following two-year budget period. The legislature then must balance the budget by not allocating more money than the estimate. If the estimate is low by two percent or more, then the entire surplus must be returned to taxpayers. The kicker law actually is composed of two parts, dealing with personal income taxes and corporate income taxes differently. In 2012 voters decided that any corporate kickers would be returned to the state general fund to provide additional funding for K-12 public schools.

Some people argue that the way the kicker “kicks” makes little sense. They correctly note that projecting state revenue two years out to within a two percent margin is terribly difficult, and has been done only rarely. Others defend the kicker law as an important brake on runaway government spending, especially since voters have rejected other tax and expenditure limitations at the polls.

Whose money is it? 

Whether the kicker law is good or bad public policy doesn’t change the answer to a more fundamental question: Whose money is it?

Some argue that the kicker money really belongs to the state. After all, they say, it’s in the state’s coffers because individuals paid what the tax law said they owed on their tax returns. As long as any Oregonian has a “need” for that money—be they school children, the elderly, the disabled, etc.—then the money should go to them instead of back to the individuals who earned it.

How much is that latte? 

Of course, this is the Marxist “from each according to his ability, to each according to his need” justification. Taken further, not only would the kicker money remain with the state, but the state could retroactively come after even more of your previous income if, in the wisdom of government officials, anyone still “needed” those funds.

One way to look at this argument is to think about walking into a coffee shop today and ordering a $3 latte. The price is posted on the wall, but the person behind the counter asks you a question before accepting your order. “Did you get a raise last year?” “Yes,” you tell her proudly, “I was very productive last year and my boss gave me a 10 percent raise.” “That’s great,” she replies. “The $3 latte will cost you $3.30.” “Why?” you wonder. “Because your ability allows me to better meet my needs.”

You wouldn’t accept this argument from your barista, and you shouldn’t accept it from your government.

Next, some argue that the kicker “lavishes a windfall on those who don’t need it.” They point to the top one percent of taxpayers with adjusted gross incomes over about $386,000 who would receive more than $4,500 each, while the average taxpayer would only get back $210. What is often unstated in this argument is that those “lucky” top taxpayers paid way more income tax than the rest of us, and they will get back exactly the same percentage of their tax payments as everyone else does.

Envy is a powerful emotion, but it should not trump reason. If we can find a better way to restrain runaway government spending, we should do so. But until that day arrives, the kicker law is one defense against those who argue that some of the money you earned belongs to someone else just because they “need” it.


Oregon Income Tax Calculator: https://smartasset.com/taxes/oregon-tax-calculator


Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. An earlier version of this Cascade Commentary was published in November 2007.

 

Oregon Legislature Should Make It Easier for Individuals to Enter the Landscaping Business

Below is a letter being distributed to all members of the Oregon House of Representatives prior to their voting on House Bill 3337 in the 2017 Oregon Legislative Session, which would make it easier for individuals to enter into the landscaping business in this state.


April 20, 2017

Floor Letter in support of HB 3337

Cascade Policy Institute supports passage of HB 3337 which creates a limited landscape construction professional license. This bill is in line with the framework for policymakers on occupational licensing issued by the Obama White House in 2015 which found…

“…the current [occupational] licensing regime in the United States…creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines.”  And…

“There is ample evidence that States and other jurisdictions should review current licensing practices with an aim toward rationalizing these regulations and lowering barriers to employment.”

The White House report also argues that reducing barriers to employment is especially helpful for “marginalized persons such as young people, minorities and individuals with felony convictions.” It notes a 2012 report by the Institute for Justice, License to Work, which found that Oregon is the third most broadly and onerously licensed state, placing it in the top tier just below Arizona and California. Oregon licenses 59 of the 102 low-to-moderate-income occupations studied. Surprisingly, only ten states even licensed landscape contractors. Oregon is one of them.

There is growing awareness on both ends of the political spectrum that many state occupational licensing laws actually stifle economic opportunity and make it particularly hard for lower-income people to move their way up the economic ladder and use their entrepreneurial talents for their own benefit and the benefit of all Oregonians. Licensing can also marginalize consumers who suffer the most when goods and services they need cost more by keeping more people from vying for their business.

HB 3337 is a step in the right direction for those Oregonians who want to work and start landscaping businesses without the burden of excessive occupational licensing restrictions. We urge its passage.

Sincerely,
Steve Buckstein, Senior Policy Analyst and Founder, Cascade Policy Institute


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

 

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.

Now Is the Time: Oregon’s Educational Opportunity Act, The Power of Choice

By Steve Buckstein

Oregon now has the chance to become an early adopter of a universal Education Savings Account program. An ESA program allows Kindergarten through 12th grade students to use part of the state funds allocated to their local school districts for other educational expenses and services of their choice, such as private or home schools, tutors, and online courses. Funds not used by the student in a given year can be rolled over, all the way to college.

Senate Bill 437 as Introduced would allow 100 percent of the average annual state funding (currently $8,781) for disabled and low-income students, and 90 percent for all other students, to fund ESAs for any students wishing to use them. This likely would result in a $200 million fiscal impact on the state and local school districts combined. A small price to pay for educational freedom, but not likely to happen in a legislative session facing a budget shortfall.

So, the bill has been amended to virtually eliminate any negative fiscal impact. It lowers ESA accounts to $6,000 for disabled and low-income students and $4,500 for all other students. These accounts represent real money…for real educational opportunities…for every student—with no fiscal impact on the state budget.

Please share your interest in Senate Bill 437, the Educational Opportunity Act, with your state legislators. And get involved at the Educational Opportunity Act Facebook page and at SchoolChoiceforOregon.com.


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

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