Nevada's Supreme Court has issued a mixed ruling on the state's education savings accounts legislation, and both opponents and supporters are declaring victory.
Education savings accounts, or ESAs, can be used for school tuition and other educational purposes, such as private tutoring, textbooks, standardized testing fees, special needs instruction, distance education programs, and transportation to classes. Any funds remaining after high school graduation can be put toward tuition at Nevada colleges.
The court concluded that while the program itself is constitutional, the source of funding is not, since the bill would divert government funds from public schools. This means that Nevada's near-universal ESA program can move forward if legislators devise a new way to fund it. The nation's most expansive school choice program to date offers substantial gains to a state ranked last in education outcomes. Constitutional options exist. Implementation, however, is up to Governor Sandoval and Nevada's congress.
Governor Sandoval's decision to table the issue of ESA funding until the 2017 session could have acute consequences depending on the outcome of Nevada's own state congressional election. While the current legislature supports ESAs, the 2017 legislature might not be as favorable. If there is significant turnover in the upcoming election, Nevada's journey to educational choice might not succeed.
School choice opponents challenged Nevada's ESAs in court on the grounds that public funds would go to religious institutions. The ACLU and the Education Law Center argued under Nevada's Blaine Amendment that ESAs are unconstitutional. In the Nevada Supreme Court, though, the opinion came down rightly that “funds placed in education savings accounts... belong to the parents and are not 'public' funds.” Thus, the court established that, legally, parents' choice is primary to the ultimate destination of a government dollar.
The court ruled that it is choice––not cash––that matters. And as true as this is of Nevada's constitution, it is truer of educational effectiveness.
Since the 1970s, government funds spent on public school students have almost tripled, but SAT and NAEP scores have not significantly changed. Studies from economists Eric Hanushek (Stanford University) and Julian Betts (UC San Diego) have shown that further school spending is not correlated with education outcomes. A state-level report in Wisconsin came to the same conclusion.
On the 2012 Programme for International Student Assessment, the U.S. scored around or below the OECD average. This mediocrity comes despite large U.S. educational spending. In 2012, the United States spent $11,700 per student––31 percent higher than the OECD average.
Meanwhile, the expanding domain of school choice is rife with success stories, most remarkably for disadvantaged groups. New York City's charter school system, despite opposition from Mayor de Blasio, continues to grow more popular, and African American students who received school vouchers in New York were 24 percent more likely to attend college. The near-universal charter program in New Orleans, besides playing a major role in the city's post-Katrina rebound, has seen improvements in test scores, graduation rates, and college entry rates.
Opponents of school choice argue that public schools suffer, but the evidence shows that the competitive pressures of school choice actually improve public school quality. After at least thirty empirical studies, no study has found that school choice harms students in public schools.
Of course, the importance of school choice is not due primarily to test scores. Other factors play a large role that is often ignored. An American Enterprise Institute study by Patrick Wolf and Thomas Stewart found that low-income parents entering Washington, D.C.'s school choice program prioritize safety over academic quality when choosing a school.
Choice obviously provides a sense of control, and as shown in a 2007 RAND report, studies unequivocally find increases in parent satisfaction from school choice programs. In a survey conducted by the Friedman Foundation for Educational Choice, no parents participating in Arizona's ESA program were neutral or dissatisfied with the program.
ESAs, unlike school choice programs that preceded them, expand choice in education beyond the realm of traditional schooling. Because other educational services are included, parents can customize a mix of education appropriate for the student.
No amount of money will improve education outcomes if the only provider is terrible. Choice creates competitive incentives among providers to improve service in cost-effective ways.
ESAs allow parents to take advantage of all the education options that are emerging outside the brick walls of public and private schools. To address the court's concerns, all that is required is a funding mechanism that does not divert public school funds. A tax credit scholarship program, as is used in Florida, is one promising option. Nevada's governor and 2017 legislature would do well to follow through on this groundbreaking step forward by updating the state's ESA legislation.
Dillon Tauzin is a contributor to Economics21.
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