Testimony of Kathryn Hickok Before the Senate Education Committee Regarding SB 668 Education Savings Accounts
June 5, 2019
Chair Wagner and Members of the Committee, my name is Kathryn Hickok. I’m Executive Vice President at Cascade Policy Institute, a nonpartisan policy research organization.
Education Savings Accounts empower parents to customize their children’s education in the ways that are best for them as individual students. ESAs are a “ticket to the future”—today—for every child to find the right fit, to find his or her spark for learning, and to succeed in school and in life. More choices mean more opportunities.
ESAs are government-authorized savings accounts with restricted but multiple uses. ESA programs deposit a percentage of the per-student state education funding allocation into an account, from which the family pays for approved education expenses.
Unused funds may be “rolled over” for subsequent years, including post-secondary education or training within the state of Oregon.
Arizona, Florida, Mississippi, North Carolina, and Tennessee are operating ESA programs today. Senate Bill 668 would create an Education Savings Account program here in Oregon.
Unlike voucher programs, ESAs give parents the flexibility to spend education funds on more than just private school tuition. Depending on the specifics of legislation, other approved uses can include textbooks, AP and online classes, tutoring, testing, dual-enrollment courses, homeschool expenses, and education-related fees.
Some ESA programs operate like controlled-use debit cards, which ensure parents pay only for legitimate education expenses.
Critics sometimes express concern that ESAs would remove funding from the public school system; that parents wouldn’t be held accountable; that non-public schools are not held to the same regulatory standards as public schools; or that ESAs mean “public dollars would be used for private purposes.”
Proponents of ESA programs take these concerns seriously. Senate Bill 668 was designed to address them.
Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Education Savings Accounts Give Parents the Power of Choice in K-12 Education
By Kathryn Hickok
This month, the Tennessee legislature passed a new Education Savings Account (ESA) law for its state’s K-12 students. The law creates the second ESA program that will operate in the Volunteer State.
The new Tennessee law provides families there with alternatives to low-performing public schools in the form of about $7,300 per student in education funding annually, if parents want to withdraw their children from their zoned district schools. Parents may spend ESA funds on private school tuition, tutoring, educational therapies, or other education-related expenses.
Education options are widespread in America, unless a family can’t afford an alternative to their zoned public school. Education Savings Accounts give parents the ability to customize their children’s education in the ways that are best for them as individual students. ESAs put parents, rather than government school bureaucracies, in the “driver’s seat” of their kids’ education. Arizona, Florida, Mississippi, North Carolina, and Tennessee are operating ESA programs today.
Unlike school voucher programs, ESAs give parents the flexibility to spend education funds on more than just private school tuition. Depending on the specifics of individual ESA programs, approved uses for ESA funds also can include textbooks, online classes, tutoring, testing, AP classes, dual-enrollment courses, homeschool expenses, and education-related fees. Some ESA programs operate like controlled-use debit cards, with which parents can pay only for legitimate education expenses.
Senate Bill 668, introduced in Oregon’s 2019 Legislative Session, would create an Education Savings Account program here. Participating children from families with income less than 185 percent of the federal poverty level and participating children with a disability would receive $6,500 deposited into their accounts. All other participating children would receive $4,900 deposited into their accounts. Funds remaining in a child’s account after expenses are paid each year could be “rolled over” for use in subsequent years, including post-secondary education within Oregon.
ESA programs are frequently designed so the amount of funding support provided to participating students would be less than the amount the state would have spent for a student to attend a public school, with the state recouping the difference. In this way, ESAs can provide a net fiscal benefit to state and local government budgets.
A fiscal analysis of Oregon’s SB 668 found the program, if enacted, likely would cost the state approximately $128 million a year but would lead to savings of about $130 million a year to local school districts, for a net state and local impact of approximately $2.2 million in reduced costs. There would be virtually no net impact on per-student spending for students who continued to choose public K-12 education.
Because parents, not the government, direct the spending of funds in their children’s ESAs, ESA programs have stood up to constitutional challenges. A state’s government is not involved in picking “winners and losers” in the non-public education sector, nor is it directing taxpayer funds to religious institutions. Schools chosen by parents are accountable to parents, who are free to “vote with their feet” and enroll in schools that are providing value. Because ESAs are not a “use it or lose it” benefit, parents are further incentivized to use their ESA funds with education providers with whom they are satisfied.
Senate Bill 668 will receive an informational hearing in the Senate Education Committee on Wednesday, June 5, at 1 pm at the Oregon State Capitol in Salem. If you support more parental choice in education, you may wish to attend the hearing or to submit your own testimony or comments to the committee online.
Children in 29 states and the District of Columbia currently benefit from 62 operating school choice programs. Oregon students, regardless of their ZIP Codes or income levels, deserve the opportunity for an education that fits their unique needs and goals. Education Savings Accounts put more options within reach for all students, especially those who need them the most.
Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Tennessee’s New Education Savings Account Law Puts More Parents in the “Driver’s Seat” of Their Kids’ Education
By Kathryn Hickok
This month Tennessee enacted a new Education Savings Account (ESA) law for its state’s K-12 students. The law creates the second ESA program that will operate in the Volunteer State.
Education options are widespread in America, unless a family can’t afford an alternative to their zoned public school. The Tennessee legislation provides families there with alternatives to low-performing public schools in the form of about $7,300 per student annually to spend on private school tuition, tutoring, or educational therapies.
Education Savings Accounts work like controlled-use debit cards. Parents can spend allocated funds on approved school expenses or educational services. ESAs put parents, rather than public school bureaucracies, in the “driver’s seat” of their kids’ education.
Senate Bill 668, introduced in this year’s Oregon Legislative Session, would implement an Education Savings Account program here in Oregon. Senate Bill 668 will receive an informational hearing in the Senate Education Committee on Wednesday, June 5, at 1 pm. If you support parental choice in education, attend the hearing or submit your own testimony online.
Children in 29 states and the District of Columbia currently benefit from 62 operating school choice programs. Oregon students deserve the same opportunities for an education that fits their needs.
Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Cultivating Educational Choice with Education Savings Accounts
By Miranda Bonifield
A Portland public school made headlines last week for offering parents the chance to choose their child’s teacher for next year as part of a school fundraiser. Teachers cried “foul” because they thought the opportunity gave unfair advantage to students whose families were from higher income brackets.
Why not give the same opportunity to all students?
Senate Bill 668 would implement a universal Education Savings Account (ESA) program in Oregon. ESAs direct a percentage of the funds the state would otherwise spend to educate a student in a public school to the student’s family to spend on private school tuition and/or other approved educational expenses.
In other words, every family could choose their child’s teacher.
Florida implemented an Education Savings Account program for special needs students in 2014. Of the students enrolled during the first two years, 40% used the funds to customize (mix and match) aspects of their child’s education. About half of these families chose to educate their children outside of a brick-and-mortar private school. The more than 10,000 students enrolled are a tiny fraction of the 2.59 million students in Florida public schools, but their choices illustrate an important point: Families need and want options that the state does not provide in their district public schools.
Oregon’s education system perpetuates a disconnect between the interests of families seeking the best possible outcome for their children and of schools seeking the fairest possible outcome for all children. We can agree that Oregon’s teachers are overworked, that many of our schools are underperforming, and that something must change to give the best possible shot to each student. Education Savings Accounts are an efficient, compassionate, effective way to provide quality education to all Oregon’s students—regardless of income.
Miranda Bonifield is Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Education Savings Accounts: A “Ticket to the Future” Today
By Kathryn Hickok
Derrell Bradford has spent his adult life passionately advocating for education reform through parental choice. Derrell grew up in southwest Baltimore and received a scholarship to a private high school. Better than anyone, he knows the power of choice to unleash a child’s potential.
“A scholarship is not a five-year plan or a power point…,” Derrell 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 home addresses. Families deserve better.
It’s time Oregon took a serious look at the diversity of options parents now have in school choice programs across the country, including Education Savings Accounts. Oregon has a history of bold experimentation in other policy areas. It’s time to expand the role of parents choosing―and the market delivering―better education for Oregon’s children through educational choice, because every child deserves a ticket to a better future today.
Kathryn Hickok is Executive Vice President of Cascade Policy Institute, Oregon’s free market public policy research organization.
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Education Savings Accounts: Fiscal Analysis of a Proposed Universal ESA in Oregon
By Eric Fruits, Ph.D.
Executive Summary
Education Savings Accounts deposit a percentage of the funds that the state would otherwise spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds to spend on private school tuition or other educational expenses. Funds remaining in the account after expenses may be “rolled over” for use in subsequent years.
Empirical research on private school choice finds evidence that private school choice delivers benefits to participating students—particularly educational attainment.
Currently, Arizona, Florida, Mississippi, North Carolina, and Tennessee have active ESA programs that are limited to particular groups of students such as those with special needs. The proposed Oregon ESA bill would introduce a universal ESA program for all K–12 students.
ESAs are frequently designed so the amount of funding provided to families is less than the amount the state would otherwise pay for a student to attend public school, with the state recouping the difference. In this way, ESAs can be designed to produce a net fiscal benefit (i.e., cost savings) to state and local government budgets.
A fiscal analysis of the proposed Oregon ESA bill finds that it would cost the state approximately $128 million a year but would lead to savings of about $130 million a year to local school districts, for a net state and local impact of approximately $2.2 million in reduced costs. There is virtually no net impact on per-student spending for students who choose public K–12 education. ♦
CLICK HERE FOR A ONE-PAGE FACT SHEET ON SB 668
Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon-based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor at Portland State University, where he teaches in the economics department and edits the university’s quarterly real estate report. His economic analysis has been widely cited and has been published in The Economist, the Wall Street Journal, and USA Today.
Dr. Fruits has been invited to provide analysis to the Oregon legislature regarding the state’s tax and spending policies. He has been involved in numerous projects involving natural resources and Oregon forest products such as analysis for Ross-Simmons v. Weyerhaeuser, an antitrust case that was ultimately decided by the United States Supreme Court. His testimony regarding the economics of Oregon public employee pension reforms was heard by a special session of the Oregon Supreme Court.
Dr. Fruits has produced numerous research papers in real estate and financial economics, with results published in the Journal of Real Estate Research, Advances in Financial Economics, and theMunicipal Finance Journal.
School Choice Improves Student Mental Health
By Miranda Bonifield
If you’ve done your homework on school choice, you know it’s been linked with improved student safety, improved quality of public schools, and academic performance. But another compelling virtue of school choice, recently published by Dr. Corey DeAngelis and Professor Angela Dills, is its association with improved mental health and decreased rates of suicide. Even when controlling for students’ family backgrounds, the paper continued to find a strong association between school choice and decreased rates of suicide.
This shouldn’t come as a surprise. When families are empowered to choose the best fit for their children, they are likely to favor schools with safe and nurturing environments that suit their child’s unique needs. The best answer to Oregon’s educational problems isn’t a longer school year or more access to preschool, even if those are potentially good things for some families. The answer is to expand Oregonian families’ choices through Education Savings Accounts, which would reserve a portion of state education funding for students’ families—making sure that money follows the educational needs of individual children, not the blanket dictates of administrators.
Every child should have the chance to receive a quality education. Oregon should make a change that’s good for our kids’ mental health and their long-term success.
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The Smartest Choice Is School Choice
By Miranda Bonifield
What do 29 states and nations from Australia to the Netherlands have in common? School choice. In Belgium, school choice is enshrined as a constitutional right. Pakistan utilizes a voucher program. The result is higher-quality education for kids of all backgrounds. It’s time for Oregon to recognize these benefits and embrace school choice.
Not only are participants in school choice programs more likely to graduate and enroll in college, but 31 of 33 available studies have demonstrated that the resulting interschool competition positively impacts public schools.
It’s the best policy for low-income communities: As the Brookings Institute’s John White noted in 2016, school choice gives low-income kids the chance to take advantage of options like private schools or tutoring that otherwise would be out of reach.
School choice doesn’t favor any one religion or group, since well-structured programs like Education Savings Accounts allow parents themselves to choose the educational resources that meet their own children’s needs. And as a cherry on top, all but three of the 40 available fiscal analyses found that school choice resulted in savings of taxpayer dollars.
However you spin it, the smart choice is school choice.
Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
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Underestimating Public School Spending
By Steve Buckstein
A 2017 national poll on education issues found, among other things, that most Americans underestimate how much money is being spent to educate kids in their local public schools. College-educated whites, for example, underestimated school spending by a fourth, while less-educated whites underestimated spending by almost a third. Before finding out the real numbers, 55 percent of the more-educated group favored higher spending, while 46% of the less-educated did so.
But, when told the actual spending levels, support for higher spending dropped by 14% among the more-educated and by 12% among the less-educated.
While the poll didn’t break down results by state, we know the big cry in Oregon is that we aren’t funding schools adequately. In reality, we were recently spending $14,827 per student in average daily attendance, compared to the national average of just $13,900. We spend more than 30 other states.
When more Oregonians learn this surprising truth, their support for higher school spending may drop, hopefully to be replaced by support for policies that might actually make a difference. One such policy is a universal Education Savings Account program that offers a portion of current school spending to families interested in choosing between their local public schools, private, religious, online, and home schools. Such choices can save tax dollars and improve educational outcomes. Win, win.
Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.
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Military Families Want Flexible Education Options for Their Kids
By Kathryn Hickok
EdChoice recently conducted a groundbreaking survey of military-connected families seeking to understand their perspectives on K-12 education and school choice. EdChoice is a nonpartisan research organization that promotes expanded educational options for all children.
The survey found that families connected with the military highly value access to better educational environments for their children, want more freedom and flexibility in choosing their children’s schools, and overwhelmingly support school choice programs like Education Savings Accounts. Eighty percent of children in military households currently attend public schools, but only 34% of survey respondents said a public school would be their first choice. Military parents are much more likely than the national average to take “costly and inconvenient steps to secure and accommodate their children’s education.” That includes taking extra jobs, moving closer to schools, and taking out loans.
The military lifestyle presents unique challenges to families. The EdChoice report noted that “the quality of educational options available to military families can play a major role in whether a family accepts an assignment or even decides to leave military service altogether.” As a nation we should consider that providing military families with meaningful school choice programs could be a significant boost to the morale of service members by improving the well-being of their families. Making it easier for military kids to get their educational needs met is the right thing to do.
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.
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