In a new op-ed, I have the regrettable task of pointing out to my fellow Washingtonians (of the PNW rather than D.C. variety) that we have increased public school spending in the past decade by $1.6 billion and gotten _________ in return. Nothing. Nada. Rien du tout, mes concitoyens.

NAEP scores are pretty much flat at the end of high school, as are SAT scores. It is hard to argue that we really care about children’s education when we’re willing to waste $1.6 billion that is purportedly meant for that purpose. If politicians and voters in the Evergreen State do decide, at some point, to do something for children, the first step would be to stop wasting that $1.6 billion. The next step would be to follow the lead of other states, like Florida, that have found ways to improve student achievement while _lowering_ taxes.

And the Other Washington Is Messed Up, Too is a post from Cato @ Liberty - Cato Institute Blog

As Neal wrote about earlier, Education Next has released their new poll, and there are some interesting results.

Surprisingly, the authors buried the lede in their writeup; education tax credits consistently have more support and less opposition than any other choice policy.

This year, donation tax credits pulled in a 29-point margin of support (that’s total favor minus total oppose). In contrast, charter schools had a 25-point margin of support.

The authors added a new, less neutral voucher question that boosted the margin of support to 20 points. They couched the policy in terms of “wider choice” for kids in public schools, and the implication was that it was universal. All three of these additional considerations tend to have a positive impact on support for choice policies.

The standard low-income voucher question showed a big jump this year from a -12 in 2010 to a 1-point margin of support. The last time Education Next asked a low-income tax credit question, it garnered a 19-point margin of support.

Last year, tax credits had a 28-point margin of support (that’s total favor minus total oppose). In contrast, charter schools had a 22-point margin of support and vouchers for low-income kids went -12 points (more respondents opposed).

Public opinion is consistently and strongly in favor of education tax credits over vouchers and even charter schools. And thankfully, they’re a much better policy as well.

Education Tax Credits More Popular Than Vouchers & Charters is a post from Cato @ Liberty - Cato Institute Blog

Today the good folks at the journal Education Next released their annual survey of education opinion. What follows is a quick summary of many of the things the pollsters found, followed by a little commentary about the national-standards results.  (Adam Schaeffer, I have it on good authority, will be flogging the tax credit and voucher findings in an upcoming post.) Bottom line: The public usually has the right inclinations, but gets some answers wrong as a result.

One note: As is always the case with polls — but I won’t go into great detail with Education Next’s questions – remember that question wording can have a sizable impact on results.

So what did Education Next find?

• Almost everybody reports paying at least some attention to education issues
• 79 percent of Americans would grade the nation’s public schools no better than a “C”
• 54 percent of Americans, and 43 percent of parents, would grade their communities’ public schools no better than a “C”
• Even when told how much their district spends per pupil, 46 percent of respondents think funding should increase. But that’s down from 59 percent when the current expenditure isn’t given
• Pluralities of Americans favor charter schooling and government-funded private-school choice (without mention of the sometimes toxic word “voucher”), and a close majority supports tax-credit-based choice   
• A huge majority, even after having been given the average teacher salary, thinks teachers should get paid more or about the same as they currently do
• A plurality thinks teachers should pay 20 percent of the cost of their health-care and pension benefits
• Large pluralities – and for one question a majority – support judging and rewarding teachers based on performance, as well as easing credentialing and tenure rules
• The public is about evenly split on whether teachers’ unions are good or bad for their districts
• Big majorities support federal testing demands (without mention of the often-toxic No Child Left Behind Act) as well as states adopting the “same set” of standards and tests (without mention of federal incentives to do so)
• A plurality of Americans oppose taking income into account when assigning students to schools
• Only 16 percent of respondents think local taxes for their district should decrease

All of these results demonstrate good reflexes by the public. They know, for instance, that overall the public schools are performing poorly, but they are a little happier with the districts they often chose when selecting homes. They want to spend more money on schooling because education is generally a good thing, but that drops when they are told how much is actually being spent (a slippery figure few hard-working Americans have time to pin down themselves). They recognize the need for choice, something they benefit from in almost every other facet of their lives. They believe in judging and rewarding people based on their performance. They oppose forcing physical integration — in this case based on income – on students and communities. And they even, reasonably, want all states to have the same academic standards.

About that last point: Intuitively, it seems to make sense. Why should kids in Mississippi be asked to learn less than those in Massachusetts? If I didn’t get paid to analyze education policy — if I had to do other work for 40-plus hours a week — I, too, would probably support national standards because I wouldn’t have time to look at the evidence, or cogitate over the politics behind such a fair sounding proposal. But I do analyze education policy full time, and I know that (1) there is little evidence supporting calls for national standards; (2) many states have adopted national standards mainly in pursuit of federal money; (3) even if you can get initially high standards, they’ll be dumbed-down by politics; and (4) states can perhaps be standardized, but unique, individual students never can be.

Of course, the good-intentions problem is not unique to education. The huge opportunity costs — among other disincentives – that keep members of the public from being able to sufficiently analyze complicated political issues is a major problem in all public policy matters. That’s why good intentions — which the public demonstrates in spades in this poll — can often lead to bad outcomes. But we cannot blame the public for that. We must, instead, inform the public as best we can.

Public Right on Choice, Wrong on Standards, But Always Well Intentioned is a post from Cato @ Liberty - Cato Institute Blog

• “Vouchers and tax credits differ from one another in important ways, and Pennsylvanians deserve to have their representatives consider them one at a time.”
• “So, if the Supreme Court’s precedents defer to Congress’ assessments of its powers, but Congress is relying for ‘constitutional authority’ on the Supreme Court’s precedents, then NO ONE is actually looking at the Constitution itself to see if a bill is within Congress’ enumerated powers.”
• “Carbon dioxide, thought to be a significant cause of the warming of surface temperature since the mid-1970s, is currently the respiration of the world’s economic civilization. Getting rid of it isn’t as simple as banning CFCs and switching to another refrigerant.”
• “As Arthur Schlesinger Jr. explained in his book of that name, the presidency’s transformation from limited, constitutional office to Supreme Warlord of the Earth has been ‘as much a matter of congressional abdication as of presidential usurpation.’”
• It’s the expenditures, stupid:

Tuesday Links is a post from Cato @ Liberty - Cato Institute Blog

• Why are we still in Iraq?
• Despite the world’s greatest nation-building efforts, things in Bosnia are still getting worse.
• Vouchers offer parents more choice in education than they currently have, but education tax credits are still better at helping the poor.
• Although federal courts have already held parts of current National Security Letter statutes unconstitutional, we still have a way to go in restoring civil liberties in the post-9/11 era.
• While Osama bin Laden has been dispatched, we still have many issues to navigate in our national security strategy. Please join us on Facebook at 12:30 p.m. Eastern today, where Cato legal policy analyst David Rittgers, who served three tours in Afghanistan with Army Special Forces, receiving an Army Commendation Medal with “V” Device for valorous action and two Bronze Star Medals, will give a LIVE video update on the future of national security policy and strategy. Submit your questions for him here.

Tuesday Links is a post from Cato @ Liberty - Cato Institute Blog

The Pennsylvania state House has just passed an expansion of its existing k-12 scholarship-donation tax credit program. The vote was a deafening 190 to 7 in a state that has voted Democratic in every one of the last five presidential elections.

Nevertheless, there is serious opposition to this expansion of education tax credits in the Senate, where several prominent lawmakers prefer a voucher bill. It’s not clear which path the legislature will ultimately take, but there seems to be considerable agreement on the goal: giving parents true freedom of choice in education.

A key point to consider, then, is which type of program is most likely to preserve the freedom and diversity of the education marketplace, thereby giving families a meaningful range of alternatives to choose from. I ran a regression study on precisely this question last fall (now forthcoming in the peer-reviewed Journal of School Choice). What I found is that vouchers impose a large and statistically highly significant burden of additional regulation on private schools while tax credits do not.

This is not the only advantage of the tax credit program, but it is a compelling one.

Educational Freedom in Pennsylvania is a post from Cato @ Liberty - Cato Institute Blog

Much attention and controversy have been focused in recent months on Pennsylvania Senate Bill 1, which would create a government-funded school voucher program.  Less attention, and far less controversy, accompanied the passage yesterday of an expansion of the state’s existing education tax credit program out of the House education committee. The vote was 21 to 4.

Apart from the seemingly more favorable reception it is receiving, the tax credit program has three notable advantages: it is less likely to curtail educational freedom by suffocating participating private schools with regulation (which would defeat the purpose of a school choice program), it does not force taxpayers to support types of education that may violate their convictions, and it encourages direct co-payments by parents toward the cost their children’s education, when they can afford to do so (which is associated in the international and historical research with higher school efficiency and greater responsiveness to parents’ demands).

Worth thinking about.

Pennsylvania School Choice Bills is a post from Cato @ Liberty - Cato Institute Blog

A new voucher program in Indiana looks likely to be signed by Gov. Daniels soon, but without a slight modification it may not have the benign budgetary impact that is expected.

As written, the program could have a significant negative impact on state finances if families claim both the vouchers and funds from the state’s existing education tax credits.

There is nothing that precludes children who receive a voucher from also topping off that amount with private funds from the existing education tax credit program. That means a voucher student could accept, for example, $4,500 in government funds and then apply for a tax credit scholarship that reduces state revenue by, say, $2,000. The voucher student would cost the state $6,500, not the $4,500 that would be counted on the books. If state funding is 100 percent sensitive to enrollment, the state would save $5,000 on that student switching, and the net impact on state finances would be a $1,500 loss. In other words, the program could have a negative net impact on state finances due to double-dipping.

From a fiscal standpoint, the state would show an apparent “savings” based on the $4,500 voucher, but this would fail to take into account the reduced revenue due to the credit. And the law requires these on-paper-only savings to be passed out to public schools districts. The result? The state government could be out $7,000 on the student in this example, not the $4,500 it paid out in a voucher. The net impact wouldn’t be neutral, it would be a $2,000 loss.

This scenario looks only at how the vouchers might impact state finances. At the local level, the program is likely to have a strongly positive impact on the resources available for each student. But a school choice program’s impact on state finances — ensuring financial transparency, certainty, and a neutral or positive impact — is a critical concern in its own right.

Critics of expanding educational freedom always claim, incorrectly, that school choice programs are a drain on public resources. But the double-dipping that is allowed under this program could inadvertently prove them right — it would also make Indiana’s existing education tax credit program a mere appendage to the new government voucher system. In short, it’s an unforced error, and worth fixing.

Ensuring that Indiana’s New Voucher Program Lives up to Budgetary Expectations is a post from Cato @ Liberty - Cato Institute Blog

• Regulatory privilege is not consistent with competitive markets–that’s why Fannie Mae and Freddie Mac need reform.
• Thank goodness the U.S. Supreme Court found that education tax credits are not consistent with the fictitious notion of a “tax expenditure.”
• President Obama’s budget plan is not consistent with either his own deficit commission’s plan or the Constitution.
• The modern “Executive State” is not consistent with Article II of the Constitution.
• Cyberbullying laws are not consistent with the First Amendment and our concept of free speech:

Monday Links is a post from Cato @ Liberty - Cato Institute Blog

I have an op-ed in the Huffington Post today arguing that it’s possible to ensure universal access to education without compelling anyone to support types of instruction that violate their convictions. This eliminates the central objection that the ACLU and ADL have given for their opposition to private school choice. Indeed, if those organizations really care about freedom of conscience, they should prefer the policy solution I outline to the status quo system in which every taxpayer is compelled to support a single government organ of education. Or is there some other reason why the ACLU and ADL oppose liberating American education?

Feel free to chime-in in the comments section on Huff Po.

“Winning” is a post from Cato @ Liberty - Cato Institute Blog

• Republicans have a big opportunity to undo Obamacare and reform Medicaid and Medicare all at once.
• It’s a good thing, too, because we’re facing a big debt crisis and if we don’t change course, federal spending will crest 42% of GDP by 2050.
• There’s also a big elephant in the room in an excessively complicated tax code.
• One has to wonder if the Republicans intend to put the big sacred cow of defense spending on the table.
• Unrelated to the budget, education choice proponents scored a big victory in the U.S. Supreme Court yesterday in ACSTO v. Winn, a decision that upheld education tax credits:
  

Tuesday Links is a post from Cato @ Liberty - Cato Institute Blog

Today, the Supreme Court of the United States issued the Zelman decision for education tax credits. More than that, it’s Super-Zelman.

The findings in Zelman apply just as well to education tax credit programs, but only credit programs allow taxpayers to spend their own money on education.

As Andrew Coulson explained in detail earlier, the Court ruled that education tax credits are not government funds, and the plaintiffs therefore have no standing to bring suit in the first place. They were not harmed because none of their money was collected and then disburse by the state.

Children are rightly our primary concern, but taxpayers deserve more consideration than they often get in debates over education reform.

Education tax credit programs can expand educational choice and freedom while respecting the preferences and values of the individual taxpayers who earned that money in the first place.

Voucher programs simply cannot provide this kind of accountability to both parents and taxpayers.

SCOTUS Issues a Super-Zelman Decision on Education Tax Credits is a post from Cato @ Liberty - Cato Institute Blog

I recently gave testimony on the merits of an education tax credit bill that’s being considered in South Carolina. Molly Spearman, executive director of the S.C. Association of School Administrators, a public school lobbying group, denounces both the bill and my testimony today in The State newspaper.

Ms. Spearman’s comments reveal either a complete disregard for the basic facts and research findings, or an ignorance of those facts, resulting in errors big and small.

On the small side, she refers to me as a “paid consultant from the Virginia-based Cato Institute” when in reality I’m a policy analyst at the Cato Institute, which is based in Washington D.C. And while I am, unsurprisingly, paid a salary by my employer, I received no compensation of any kind in return for my testimony in the South Carolina legislature.

More concerning, Ms. Spearman claims that an education tax credit program like the one proposed in SC “has no research-based support that is works.” Her review of the research on credit programs appears to have consisted of calling someone in the Florida Department of [Public] Education to ask them why they thought academic achievement in Florida has increased.

Ms. Spearman apparently missed the official government study, conducted by academic researcher David Figlio at Northwestern University, which found the credit program significantly improved the academic achievement of public school students. That’s not surprising, since it’s consistent with the seventeen other studies that find private school choice programs improve public school performance.

Ms. Spearman also dismisses the state savings expected from the program based on a shocking misunderstanding of education funding. State savings are based on the amount of the credit and the amount of state funding that changes when a student leaves public school; fixed classroom costs have nothing to do with it. The state will save about $500 per student under this program.

The school districts will save much more; about $5,500 in additional funds for every student who leaves even after subtracting fixed costs. Ms. Spearman acts as if almost no money is saved when a student leaves. Here’s a question; then why do public school demand full funding for each additional new student? It works both ways . . . if one fewer student saved little money, then one more would add little cost. In fact, an academic study has found that only about 20 percent of student funding in South Carolina is fixed in the short term. In the long-term, there are no fixed costs at all.

Again, this is no surprise; an official government analysis found Florida’s credit saved about $1.50 for ever dollar in credits while improving the academic achievement of public school students. Numerous studies demonstrate large actual and potential savings from private choice programs.

There are more errors in other areas, which is remarkable for a piece under 700 words, but I’ll close with Ms. Spearman’s final thought; “We are falling behind our neighbors in North Carolina and Georgia. We cannot gamble on this legislation.”

How ironic . . . Georgia adopted  a relatively large education tax credit program in 2008, while North Carolina is seriously considering a tax credit proposal of it’s own this year. South Carolina can’t afford not to adopt education tax credit reform.

Had Ms. Spearman done her due diligence on this education issue, or had she called me and asked, she could have avoided these embarrassing errors.

Ms. Spearman’s article is all the more concerning because she is a former schoolteacher and now leads the S.C. Association of School Administrators. South Carolina’s children and taxpayers deserve far better from their leaders in public education

Lobbyist Writes Fact & Evidence-Free Op-ed, Analyst Not Shocked At All is a post from Cato @ Liberty - Cato Institute Blog

VerBruggen signs off on the tax cut/government check debate by doubling down on the core issue; he believes that there is no meaningful difference between government spending and a tax cut.  I will quote him in full: “If some libertarians want to keep insisting that there’s a meaningful difference between (A) the government spending $500 on something and (B) a person “donating” $500 to that thing and then getting a $500 break on his taxes in return, there’s nothing I can do to stop them.”

In this, he has the company of the 9^th Circuit and the Progressive wing of SCOTUS.

VerBruggen has also rightly asked for a correction to one of the numerous quotes I pulled from his blog posts on tax cuts vs government spending. I thank him sincerely for reading through to the end of my interminable post. The correct quote is below, with the omitted, qualifying language in italics, a new note on charitable giving and government spending, and my otherwise unchanged commentary:

He insists that “much (most?) deducted charity spending does not offset government spending in the slightest,” yet also agrees that “voucherizing the tax subsidies for charity would remove the incentive to donate” to the range of charitable and social welfare activities the government supports. [Note: There is much evidence that government spending on "charity" crowds out charitable giving. And most, not to mention much, charitable giving in the U.S. is devoted to health, educational, social welfare and religious organizations which in turn focus on assistance to the poor, health and educational activities. Needless to say, the government is deeply involved in health, education and welfare spending. See the index of Arthur Brooks' fascinating book, Who Really Cares, for more details.]

Charity does not reduce pressure on the welfare state? The billions of dollars donated to health, education, welfare . . . these offset nothing in the public sector? In the absence of tax expenditures for employer-provided health care, how likely is it that the U.S. would have retained a relatively robust private medical market?

The charitable deduction allows the people who earned the money our governments spend on public “charity” to keep some portion of what the government would otherwise have spent on government “charity” or some other wasteful project.

If VerBruggen is concerned that the tax burden will marginally increase on some citizen as the result of another’s charitable deduction then the answer is to balance that lost revenue with a reduction in government “charity,” not to eliminate the deduction.

Perhaps most concerning is VerBruggen’s breezy assumption that all income belongs to the government. He insists that “taxpayer money is already allocated” in the form of deductions for charity, and therefore that “voucherizing the total amount of the deductions wouldn’t change that . . .”

Really? Tax credits and deductions belong to the taxpayer who earned them. They are not government funds; that is a legal and logical statement. To insist otherwise is to argue that all income is the governments, and what it does not claim is ours. The money that a taxpayer spends is HIS money, not the government’s.

And, as is noted above, voucherizing charitable deductions will convert a huge portion into direct welfare payments and eliminate the core of the charitable act; giving away one’s own money.

Tax Cuts vs. Government Checks . . . NRO Conclusion and Correction is a post from Cato @ Liberty - Cato Institute Blog

Yesterday, the Supreme Court of the United States heard arguments in an appeal of a 9th Circuit decision, Winn v Garriott, a challenge to one of Arizona’s education tax credit programs. It’s been getting more press than I’d expected, in the New York Times, the Washington Post, and USA Today. That’s great news, because the case is far more important than just saving a program that improves education and expands educational freedom.

The 9th Circuit’s reasoning arrogates to the state all property, dissolving the distinction between public and private funds as well as public and private choices. It is a disturbing, dangerous decision.

They assert that tax cuts are the equivalent of government funds, a conclusion possible only if one assumes that all personal income belongs by default to the state rather than to the individual who earned the money. It asserts as well that when taxpayers and parents privately choose to support religious educational organizations, they are in violation of the First Amendment. This reasoning blatantly ignores the logic and plain meaning of the 2002 Zelman decision upholding school vouchers, among others.

Here is a prediction; the court will have their absurd ruling on an Arizona education tax credit program posted on the wall of judicial shame like so many others issued from their Circuit.

But I want more from the Court. This ruling is so awful that I can only pray SCOTUS rules beyond the questionable standing of the plaintiffs and comprehensively dismembers this most egregious 9th Circuit decision.

All of Your Money Belongs to the State is a post from Cato @ Liberty - Cato Institute Blog

Nikki Haley promises to be a star governor if–most likely when–she’s elected this fall by South Carolina voters. Word is she’s a committed fiscal conservative, and her background is steeped in a successful family business, not large corporations, so she should have an intuitive grasp of what makes our economy grow.

And Haley has a long, solid record of supporting school choice through education tax credits in South Carolina. As recently as August 19^th, Haley was reported as saying, “like Sanford, she would veto a bill to expand public education options unless it included help with private tuition. She agreed with Sanford that it must be all or nothing, saying otherwise the Legislature won’t return to the debate.”

Now that’s the stuff.

But Haley has recently put out some concerning and confusing statements on school choice. “Haley said approving private-school choice, which would provide tax credits or vouchers to pay private-school tuition, was not a priority. ‘That is not my focus; my focus is the school funding formula,’ Haley said.”

Changing the funding formula is all well and good. It might save some money. But it will NOT improve education in South Carolina. Education tax credits will improve performance and save much more than any public school reform. School choice should be Haley’s only education issue.

Why is she backing away all of a sudden? Sure, the primary is over, but Haley is leading comfortably in the polls. Education tax credits pull down serious majority support across nearly every single demographic in South Carolina. White voters, black voters, old and young, Republicans and even Democrats. This is a great issue. And backtracking on a signature issue could tarnish her fresh, reformer image.

Most important, school choice is the right policy. Haley always seemed to have a deep understanding that only an education tax credit program can substantively improve education in South Carolina.

Senator Jim DeMint has a great short video plug for school choice out . . . let’s hope Haley takes a look at this, remembers what reform really matters, and does the right thing in office.

South Carolina Gov Race: What’s Haley Thinking on School Choice? is a post from Cato @ Liberty - Cato Institute Blog

Arizona grants income tax credits for contributions made to school tuition organizations (“STOs”).  STOs must use these donations for scholarships that allow students to attend private schools.  This statutory scheme broadens the educational opportunities for thousands of students by enabling them to attend schools they would otherwise lack the means to attend.  Still, several taxpayers filed a lawsuit challenging the program as creating a state establishment of religion.

Although the Ninth Circuit acknowledged that increasing educational opportunities is a valid secular purpose for a legislative act, it found that the tax credit program nonetheless violates the Establishment Clause because many of the STOs—as it happens, a decreasing majority—provide scholarships for students to attend parochial schools.  Earlier this year, Cato filed a brief supporting the request for Supreme Court review filed by the various parties defending the program.  The Court granted cert.

Now Cato (led by Andrew Coulson and myself) has filed another brief, joined by four education reform groups, urging the Supreme Court to overturn the Ninth Circuit’s decision because it was based on faulty reasoning:  It equated the private and voluntary choices of individuals who donate to religious STOs with state sponsorship of religion.  The lower court also made the dubious assertion that Arizona parents feel pressured to accept scholarships to religious schools, in spite of the fact that the share of STO scholarships available for use at secular schools is almost twice as large as the share of families actually choosing secular schools. Moreover, the tax credit scheme is indistinguishable from similar charitable tax deduction programs that the Court has previously held to pass constitutional muster.

We urge the Court to reaffirm its longstanding jurisprudence—especially the 2002 school-choice case, Zelman v. Simmons-Harris—whereby instances of “genuine and independent choice” are insulated from Establishment Clause challenge. Far from being an impediment to parental freedom, the autonomy Arizona grants to taxpayers and STOs is ultimately essential to it.  More generally, should the lower court’s opinion be allowed to stand, the progress made to broaden the educational opportunities of students across the country will be stifled.

The case of Arizona Christian School Tuition Organization v. Winn will be heard by the Court this fall, probably in November.

Taxpayer Choice + Parental Choice = Good, Constitutional Education Reform is a post from Cato @ Liberty - Cato Institute Blog

Gov. McDonnell just signed a bill that will give a tax credit to the film industry. They will shell out up to $2.5 million to movie-makers in the first year and up to $5 million thereafter. Proponents say it might save money. Unfortunately, the evidence from other states suggests it will lose money.

At a time of economic turmoil and budget problems, the Governor wants to lose money by giving a tax credit to the film industry. It’s even refundable, which in normal-talk means the state will send a check to a film executive even if he doesn’t owe any taxes; that’s a straight BAILOUT, not a tax credit. The last thing Virginia needs is another corporate bailout.

What is wrong with our Commonwealth? And what in the world is Governor McDonnell thinking?

There is one tax credit that has consistently proven to save money and increase achievement in public schools: education tax credits.

Florida recently expanded its successful education tax credit program to $140 million with the support of 42 percent of Democrats and almost every Republican. The program was found by the government to save $1.49 for every dollar invested in the credits. And the official academic researcher for the program just found that it significantly increases public school performance.

Strangely, education tax credits are not on the Governor’s agenda. Why?

Why is a Governor who had the good sense to appoint a true education reformer, Gerard Robinson, as the Secretary of Education not out front leading the movement for effective, efficient investment in education?

Look to Pennsylvania, to Georgia, Iowa, Rhode Island, Illinois, Arizona, any of the nine states supporting twelve education tax credit programs to see the new, bipartisan wave of education reform. A toothless Virginia charter school law will do nothing to improve education or save money. And the constitution won’t allow a strong charter law.

We need to save money, not waste it on another corporate bailout. We need to increase achievement.

We need leadership, Governor. We need education tax credits in Virginia. Now.

Gov. Bob McDonnell Needs to Lead on the Budget and Education is a post from Cato @ Liberty - Cato Institute Blog

NRO editor Robert VerBruggen has weighed in a couple of times this week on the relative merits of school vouchers and education tax credits, raising interesting and important issues.

In response to my earlier post today about an education tax credit case now before the U.S. Supreme Court, VerBruggen writes:

If the Supreme Court buys this logic — which I suppose is sound on its face — it could lead to some very interesting programs. Any time it’s illegal for a government to fund something directly, it could simply make a dollar-for-dollar “tax credit” program for it, allowing sympathetic taxpayers to technically “donate” — but actually just redirect the taxes they’d otherwise have to pay — to the cause.

This is actually an argument presented by critics of the program in their brief asking the Supreme Court not to hear the appeal that it… just decided to hear. The fact that this argument is fallacious is no doubt one reason that the Supreme Court decided to reject critics’ request. Here’s where it goes wrong:

Under a constitutional tax credit program such as Arizona’s, the state has no power to pressure/encourage taxpayers to do anything that the state could not do directly. Taxpayers can choose to give no money to religious charities, or to give all their money to them. The state is unable to affect their decisions in any way.

As Ilya Shapiro and I pointed out in Cato’s amicus brief in this case, this is identical to the law pertaining to federal charitable tax deductions. Religious charities get more tax deductible donations than any other kind of entity, and the Supreme Court has repeatedly upheld their constitutionality because the decisions regarding such donations are left entirely to the unfettered choices of private citizens.

While it would be unconstitutional for a tax credit program to only allow donations to religious charities, it is perfectly consistent with the U.S. Constitution and Supreme Court precedent for a tax credit program to be religiously neutral, leaving the donating decisions to private citizens.

But there’s much more to it than this. Credits are not just constitutional, they offer an important advantage over vouchers. Under voucher programs, all taxpayers must support every kind of schooling, which can be a source of social conflict in a diverse society. [Think liberals being forced to fund religious-conservative-capitalist schooling; or conservatives being forced to fund schools supporting homosexuality as natural and without any inherent moral implications]. While this doesn’t violate the U.S. constitution (see Zelman v. Simmons Harris), it’s still a less-than-ideal outcome, as was observed in all three dissents in the Zelman case.

Tax credits, as I explained in the last section of our amicus brief (p. 21), avoid this source of social conflict. Not just families but taxpayers enjoy the benefits of free choice and voluntary association. Tax credits are thus a way to ensure universal access to a free educational marketplace without putting citizens into conflict with one another on matters of conscience. For this and many other reasons, they are the best realistic policy for advancing educational freedom yet devised.

School Vouchers vs. Tax Credits is a post from Cato @ Liberty - Cato Institute Blog

Arizona grants income tax credits for contributions made to school tuition organizations (“STO”).  These STOs must these donations for scholarships that allow students to attend private schools.  This statutory scheme broadens the educational opportunities for thousands of students by enabling them to attend schools they would otherwise lack the means to attend. 

The Ninth Circuit held that the tax credit program violated the Establishment Clause because many of the STOs — as it happens, a decreasing majority — provide scholarships for students to attend parochial schools.  Counsel for the defendants, including the Institute for Justice, asked the Supreme Court to review the case — and indeed to summarily reverse the Ninth Circuit, based in part on a 2002 case (Zelman v. Simmons-Harris) rejecting a similar challenge to a school voucher program.  Cato filed a brief, joined by the Foundation for Educational Choice and the American Federation for Children, supporting this request. 

Our brief argues that the funds received by STOs are the product of individual taxpayers’ “genuine and independent choice” — the touchstone by which the Court judges the religious neutrality of statutes allowing for taxpayer money to fund religious education.  Moreover, the tax credit scheme is indistinguishable from similar charitable tax deduction programs that the Court has previously held to pass constitutional muster.  While the Ninth Circuit reasoned that Arizona parents feel pressured to send their kids to parochial schools due to limited scholarships available for secular schools, it failed to consider that the share of STO money available to secular schools was nearly twice as large as the share of families choosing to send their children to secular schools. 

Far from being an impediment to parental freedom, the autonomy Arizona grants to taxpayers and STOs is ultimately essential to it.  More generally, should the lower court’s opinion be allowed to stand, the progress made to broaden the educational opportunities of students across the country will be stifled. 

The name of the case is Arizona Christian School Tuition Organization v. Winn.  The Court will likely decide before it breaks for the summer whether to take it up — and, indeed, whether to summarily reverse the Ninth Circuit.

Taxpayer Choice + Parental Choice = Education Reform That’s Constitutional is a post from Cato @ Liberty - Cato Institute Blog