Expand Choice, but Keep the Public Interest in Mind

There are about a quarter million low-income kids enrolled in Nevada schools. Some of these children live in small rural communities, but most reside in the Clark County school district surrounding Las Vegas. Their numbers are concentrated in the state’s worst-performing schools, and 49 of the 78 schools identified by the state as chronically failing are in Clark County.

The state’s overall academic performance lags national averages, with its students scoring in the bottom quartile in both reading and math on the 2015 National Assessment of Educational Progress results. But the state’s urgent task is to provide new, high-quality seats for the 57,000 students languishing in its worst schools, those occupying the bottom 10 percent of academic performance for at least three years. A new Achievement School District (ASD),  modeled after those in Louisiana and Tennessee, is charged with transforming these very low-performing schools by taking in a small number (no more than six per year) and pairing them with successful charter networks, with the hope that they will return to district supervision once they’re humming. The ASD has a distinct, limited mission, its resources aimed squarely at saving students who are stuck in intolerably lousy schools.

That work could be supplemented by a more general expansion of charter schools. The state has no cap on charters, and there is ample room to grow. Clark County has more than 19,000 students in charter schools, but they account for just 6 percent of the district’s more than 336,000 public-school students. Furthermore, the sector’s performance is far from exemplary at this point, and aggressive efforts by state charter officials to recruit top operators from around the country have been hampered by Nevada’s abysmally low per-pupil funding.

However, the state has taken major strides to position its charter sector for increased success. New state revenues from last summer’s tax hike will help attract strong operators to the state; the federal Department of Education has just awarded a $16 million grant for new charter start-ups; and reforms passed in 2013 and 2015 persuaded the National Association of Charter School Authorizers to declare Nevada’s charter law the strongest in the nation.

Instead of keeping an unrelenting focus on students facing dire needs, however, Nevada is rolling the dice on another marquee program, a custom version of Education Savings Accounts (ESAs). Typically, ESAs are designed to provide education options to families who otherwise could not afford them. The Nevada program is explicitly not targeting low-performing schools or low-income families but rather is being made available to all, including affluent families who can already exercise choice by locating in a good school district or paying tuition for a private school.

That feature is what lost the support of longtime social-justice warrior (and founder of the pro‒school choice Black Alliance for Educational Options) Howard Fuller, who in July shocked many allies by stating his opposition to the Nevada plan: “Parental choice should be used principally as a tool to empower communities that face systemic barriers to greater educational and economic opportunities … I could never approve of a plan that would give those with existing advantages even greater means to leverage the limited number of private school options, to the detriment of low-income families.”

That is not only a sound moral argument but also a good synopsis of the program’s flawed economics. An ESA provides $5,100 per pupil ($5,700 for a low-income student or one with disabilities), which is supposed to secure a private-school spot. But average tuition for private elementary schools in Nevada is $8,558, and at the high school level, $10,322. That leaves a mighty big gap for a low-income parent to fill, but it’s a much lesser lift for folks who bring home a generous paycheck.

Supporters argue that upscale families won’t be tempted away from their public schools by the lure of ESAs, but indications are to the contrary. According to data from the state treasurer’s office, early enrollment is coming mostly from well-off neighborhoods. “Overall, half of the nearly 3,100 applications submitted as of Oct. 28 list an address in a ZIP Code among the top 40 percent of median households in Nevada. That’s in contrast to just 10.7 percent of applications from households with median incomes in the bottom 40 percent.”

Now, my forum partner Matt Ladner dismisses this as a “poorly considered” argument because “nothing in American K–12 education (or higher education for that matter) employs a means test.” Come again? Buying a home in Greenwich or Grosse Point or Chevy Chase so your child can attend a great public school certainly involves a hefty means test—and if you don’t agree, ask the low-income folks in the urban centers down the road. Moreover, we apply means tests every day in deciding which students and schools will benefit from Title I and other programs that are federally-resourced but administered at the district level. True, no child would ever be told, “Your parents are too wealthy so you aren’t allowed to attend this school.” But that point misstates the issue. Susie’s wealthy parents are already taking good care of her schooling and don’t need an additional state subsidy. We ought to spend scarce public dollars on those who need the help. To use an analogy: Everyone pays taxes that fund the fire department, so everyone’s entitled to protection. But that doesn’t mean you send trucks to spray every house in town. You deploy them to the fires.

Here, let me note what I am not worried about: the set of church-state issues raised by the ACLU, which is currently suing Nevada state treasurer Dan Schwartz to halt implementation of the accounts because they will steer tax dollars to sectarian institutions. While Nevada’s constitution is unusually direct in forbidding such funding—and about half of the state’s private schools are sectarian—the ESA program has been carefully crafted to fit the contours of the U.S. Supreme Court’s landmark Zelman v. Simmons-Harris decision (2002), which held that an Ohio voucher program allowed parents “to exercise genuine choice among options public and private, secular and religious.”

Rather, my concerns are secular and pragmatic.

The Supply Side Is Weak 

Right now there are 186 private schools in Nevada serving just over 29,000 students in a state with more than 450,000 students in public schools. According to a separate lawsuit that concentrates on funding issues, “very few of Nevada’s private schools are in the urban core of Nevada’s two largest cities, accessible to students in those neighborhoods.” This sounds plausible, since just 23 percent of those enrolled in the state’s private schools are minority students.

The scarcity of private options is conceded by ESA advocates, including Ladner. As he notes: “Few private schools exist in Nevada, and those that do mostly (and predictably) operate in areas with enough high-income families to support them”—a striking admission. He recommends focusing on the creation of new private school seats and on options outside of private schools.

Some of those nonschool options are appealing. I have a hard time objecting  to a program that gives parents funding for tutoring and technology, so long as the available resources are of sufficiently high quality (an especially pertinent question in Nevada’s vast rural areas). But parents may also need some help in sifting through vendor claims and judging the type and depth of services to purchase. For example, in a 2012 American Enterprise Institute paper examining No Child Left Behind’s “supplemental educational services” (SES) provisions, Carolyn J. Heinrich and Patricia Burch noted a “critical threshold” in terms of how much time a student spends in tutoring: “Below 40 hours [of total tutoring time] we do not identify any statistically significant effects of SES on students’ math and reading gains.” They also found that online providers (who charged more for their services) were less likely to produce learning gains, a finding that regrettably parallels research showing dismal performance of virtual schools in the tuition-free charter sector. Findings like these suggest a strong need for robust, accurate information, provided by a disinterested third party.

As for new private schools, they won’t just materialize automatically and may be of dubious quality. Hard experience in the charter sector teaches that you can’t hothouse good schools, and that even replicating successful ones takes skill. We’ve learned that you need serious review of operator applications, plenty of due diligence about their track record, and a good long on-ramp to ensure a successful opening.

Nevada’s ESA program provides none of these guardrails, relying instead on two assurances. One is found in Section 11 of the enabling legislation, which requires that schools and other vendors likely to receive more than $50,000 in ESA funds annually obtain a surety bond. This requirement will help the state avoid financial losses if a school goes belly-up, but it is no defense against shoddy operators, since such bonds are not exactly hard to come by. (Check surety company websites and you’ll see repeated variations on “Bad Credit? No Problem!”)

The act also requires that participating schools be accredited. But the provision only applies to private schools that are licensed by the state, and religious schools are exempt, creating a rather considerable loophole.

Of course, quality will depend mainly on parents making sound choices. But where one would hope for plentiful public information to help parents understand the performance of participating schools, Section 12 of the act requires only that the department publish aggregated results, sliced by grades and income levels, and that it conduct a survey
of parent satisfaction with the ESA program, not the schools.

Finally, the act allows the state treasurer to deny participation in the program to any entity that routinely fails to comply with the law, or fails “to provide any educational services required by law to a child receiving instruction.” Stern-sounding but vague, these provisions don’t actually provide a clear course of action when a school is doing a lousy job. While the ASD and other authorizers like Nevada’s State Public Charter Schools Authority create contracts with clear performance expectations, the ESA program provides no apparent standards for judging whether public funds are buying strong outcomes.

Are Student Interests Protected?

Schools taken under the ASD umbrella will be open to all students currently enrolled and any others who satisfy geographic requirements. The state’s charter schools are similarly open to all. Private schools, on the other hand, do not share this obligation to openness, and nothing in the program’s enabling legislation directly addresses discrimination, further narrowing the chances that choice will be realized for those who need it most.

While the U.S. Supreme Court has ruled since 1976 that private schools cannot deny admission based on race, some states have upheld the right of private schools to expel students because of their own or their parents’ sexual orientation. Nor are private schools required to enroll students with disabilities. According to the U.S. Department of Education, students with disabilities “do not have an individual entitlement to services they would receive if they were enrolled in a public school. Instead, the [local school district] is required to spend a proportionate amount of IDEA [Individuals with Disabilities Education Act] federal funds to provide equitable services to this group of children. Therefore, it is possible that some parentally placed children with disabilities will not receive any services while others will.” A similar approach is taken for English language learners; district help is available if a private school chooses to enroll the student in the first place.

It must be possible to navigate the trade-offs between the public and private spheres when seeking to provide benefits of private schooling through the use of public funds. The Nevada program doesn’t make much of an attempt.

I wish it were possible to applaud Nevada’s Education Savings Accounts without reservation. The program is a bold stroke, and it has broken school choice out of the tiny, marginal voucher programs seen in other states. With some modifications, the program could have a vast and important impact without the unintended side effects noted here. Taking greater cognizance of income would not only direct the benefits of ESAs to where they are truly needed, but would also reduce the risks of overburdening existing private schools and of encouraging charlatans to open new ones simply to collect public monies. If the state is successful in its current court appeal and the ESA program moves forward, I would love to see the kind of robust Yelp-like parent evaluations Ladner envisions—so long as they’re paired with strong oversight representing the public interest of all the taxpayers whose kids aren’t attending ESA-financed schools.

Until such changes are made, the best way of getting help to high-need students in Nevada is through the two charter-based channels: a modest quickening of the pace at which the ASD takes in troubled schools for turnaround and a concentrated effort to attract high-caliber talent that can expand capacity and enhance performance in the state’s public-charter sector.

Nelson Smith is an education policy consultant and senior advisor to the National Association of Charter School Authorizers.

This is part of a forum on education savings accounts. For an alternate take, please see “The Next Step in School Choice,” by Matthew Ladner.

This article appeared in the Summer 2016 issue of Education Next. Suggested citation format:

Ladner, M., and Smith, N. (2016). Should Reformers Support Education Savings Accounts? Education Next, 16(3), 62-68.

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