Many Predict Trump-DeVos Will Privatize with Tuition Tax Credits, Not Plain Old Vouchers

Everyone is wondering exactly how President Donald Trump’s and Secretary of Education, Betsy DeVos’s plans for expanding privatization of public education will play out. Two upcoming events may provide more details.  It has been predicted that the President will lay out his priorities when he releases his budget proposal in mid-March. Even before that, however, in a major address tomorrow to a joint session of Congress, he has said he’ll outline his policy priorities. Here is Politico commenting on what is expected from tomorrow’s address: “White House officials said that after a first month driven almost entirely by policies they could enact unilaterally, the joint congressional address will focus on work the White House wants done on Capitol Hill during the rest of 2017.”

The President and his education secretary have said they will expand the privatization of education but how that will happen isn’t yet clear. One member of the House of Representatives has already introduced a bill to eliminate the federal education law, the Elementary and Secondary Education Act (now called the Every Student Succeeds Act) entirely and redirect the money now spent on Title I, ESEA’s primary program, to a school choice expansion. Others predict that Trump and DeVos will expand the one existing federal voucher program in Washington, D.C.

Some have suggested that Trump will convince Congress to go back to tinker with ESSA and pass a program Lamar Alexander and other conservatives endorsed back in 2015, Title I Portability—the idea that each poor child would be able to carry a designated amount of extra money to any public school that child chose to attend. Title I Portability was never broadly endorsed in Congress, however, because it would defeat the primary purpose of Title I, which was designed to address concentrations of poverty in particular school districts.  Schools educating concentrations of children whose families are extremely poor face an overwhelming set of challenges.  In its excellent (2010) book, Organizing Schools for Improvement, the Consortium on Chicago School Research documented the challenges for schools in neighborhoods where over 90 percent of children live in extreme poverty: “An endemic concern for urban schoolteachers are the students in their classrooms with extraordinary personal and social needs. Many urban children live under unstable home and community circumstances, including homelessness, domestic violence, abuse, and neglect. In such circumstances, a most basic need for healthy child development—stable, dependable relationships with caring adults— may not always be present… At both the classroom and the school level, the good efforts of even the best of educators are likely to be seriously taxed when confronted with a high density of students who are in foster care, homeless, neglected, abused….” (pp. 172-173)

It now appears more likely, however, that while Trump is likely to enlarge the federal Washington, D.C. voucher program, any program on a national scale will expand school choice through tuition tax credits.  Here is Valerie Strauss of the Washington Post: “Is there enough support in Congress to close the Education Department and create a federal voucher program for America’s schoolchildren?  No, according to people on Capitol Hill who are familiar with the issue, though a pilot federal voucher program is possible. Still, Trump has said he wants to spend $20 billion in federal funds to expand school choice, and the Hill sources said this could come in the form of a federally funded scholarship tax credit program that would be part of a Trump-promised reform of the U.S. tax code… Scholarship tax credit programs offer lucrative tax credits to individuals and corporations donating to nonprofits that provide money for students to use for tuition at private and religious schools and public schools outside a student’s designated district.  There are now 17 states with programs that offer scholarship tax credits… including Florida, the state that DeVos has frequently mentioned as a model for the kind of reform she is seeking.” (This blog covered the range of voucher, tax credit, and education savings account programs here.)

A tax credit plan would be easier to pass in Congress according to Caitlin Emma at Politico, “A federal tax credit scholarship program could be part of a larger tax reform bill and pass through the budget reconciliation process with only 51 votes in the Senate.”  Diverting Title I funds, by contrast, would require an appropriations bill, that could potentially be filibustered and require 60 votes.

You might wonder how tax credits could damage the public schools, if they merely divert tax dollars to private schools without affecting already-existing federal public school programs. Here is how this would likely work out. While the federal government provides less than 10 percent of school funding, states are a primary funder of public schools, covering about half of school spending. Any federal tax credit program would very likely be designed to incentivize states to launch new tuition tax credit programs or expand existing programs. And establishing or expanding state tax credits would reduce the amount of tax dollars flowing into the states’ public education budgets.  Here is how David Berliner and Gene Glass define tuition tax credits in their book, 50 Myths and Lies That Threaten America’s Public Schools: “There are tax credits and then there are tax deductions. They are very different things. Suppose you and your spouse have an income of $100,000…. And suppose that the federal income taxes you owe… amount to about $25,000 a year. If you take a tax deduction for your contribution of $1,000 to the Red Cross, that will reduce your tax indebtedness by about $250. Not so with tax credits… If you and your spouse live in a state with a state income tax (and a tuition tax credit program)… then you can direct $1,000, say, of your state income tax to the My-Pet-Project fund, and your state income tax indebtedness will be reduced by the full $1,000.” (p. 188)

Jeff Bryant quotes Kevin Welner of the National Education Policy Center explaining more about how such schemes  work: “Welner explains, tax credit scholarship programs are a ‘money-laundering mechanism’ that inserts into the transaction a third party—often called a school tuition organization (STO). Instead of taxpayer money being distributed directly to parents as vouchers, credits are issued by the state when tax deductible donations go to an STO. That credit then becomes scholarship money for parents to pay for private school tuition.”

Meanwhile, as Trump and DeVos move forward with some kind of expansion of vouchers or tax credits, in the NY Times, Kevin Carey just published a scathing critique based on three new research reports on the performance of traditional school voucher programs that have been operating for some time in a number of states.  Carey reports on a new study of the Indiana voucher program, created by Governor Mitch Daniels and rapidly expanded by Mike Pence when he was Indiana’s governor. The new research confirms that Indiana students who have moved to voucher schools “experienced significant losses in achievement” in mathematics and no improvement in reading.  Another 2015 study, this time in Louisiana, documents “negative results in both reading and math” when students used a voucher to transfer to a private school. Then this past June, “a third voucher study was released by the Thomas B. Fordham Institute, a conservative think tank and proponent of school choice. The study, which was financed by the pro-voucher Walton Family Foundation, focused on a large voucher program in Ohio. ‘Students who use vouchers to attend private schools have fared worse academically compared to their closely matched peers attending public schools,’ the researchers found.  Once again, results were worse in math.”

Carey concludes: “The new evidence on vouchers does not seem to have deterred the Trump administration, which has proposed a new $20 billion voucher program.  Secretary DeVos’s enthusiasm for vouchers, which have been the primary focus of her philanthropic spending and advocacy, appears to be undiminished.”

These new voucher studies would not surprise Christopher and Sarah Lubienski, professors at the University of Illinois, who, in their 2014 book, The Public School Advantage, explain: “We were both skeptical when we first saw the initial results: public schools appeared to be attaining higher levels of mathematics performance than demographically comparable private and charter schools—and math is thought to be a better indicator of what is taught by schools than, say, reading, which is often more influenced directly and indirectly by experiences in the home. These patterns… held up (or were ‘robust’ in the technical jargon) even when we used different models and variables in the analyses… (T)he data show that the more regulated public school sector embraces more innovative and effective professional practices, while independent schools often use their greater autonomy to avoid such reforms, leading to curricular stagnation.” (pp xvii-xviii)