What Is at Stake when ALEC, the State Policy Network, The Buckeye Institute and EdChoice Lobby for Vouchers?

As we begin 2021, there has been troubling coverage about new voucher programs popping up in state legislatures. This is despite that Betsy DeVos is gone and that President Joseph Biden is a strong supporter of the institution of public schools. And in states like Indiana, and Ohio, where privatized school vouchers have been in place for decades, we can also watch pressure for their expansion.

Earlier this week, Bill Phillis, Ohio’s longest and best informed proponent of public schools and the executive director of the Ohio Coalition for Equity and Adequacy of School Funding, sent around a troubling article from the Fort Wayne Journal Gazette describing a bill being considered by the Indiana House Education Committee for the radical expansion of an already enormous publicly funded private school tuition voucher program in Indiana, Ohio’s neighbor:

“The proposed bill expands the $172 million a year voucher program to allow a family of four earning as much as $145,000 a year to qualify for vouchers. Median household income in Indiana is about $60,000 a year. The bill also eliminates income limits on the size of the voucher awards. Currently, a family of four earning up to $48,000 a year is limited to a voucher worth 90% of per-student state funding for the school corporation in which the family resides. At $60,000 a year in household income, the voucher drops to 70%. Four-person families earning up to $96,000 a year qualify for 50% of per-student funding. But HB 1005 drops the income tiers even as it raises income eligibility. A family of four earning up to $109,000 would qualify for a 90% voucher in 2021-22. In 2022-23, eligibility rises to $145,000 a year for a 90% voucher. That translates to millions of tax dollars to parents who do not choose public schools but can afford tuition for their children.”

The goal of voucher proponents in Indiana is clearly similar to Ohio State Senate President Matt Huffman’s dogged purpose in Ohio. In late November, Huffman pushed through without even a committee hearing a revamp of his primary project: expanding voucher accessibility to an ever increasing number of students across our state. The American Legislative Exchange Council (ALEC) is always said to be the driver of voucher promotion nationwide.  In 2017, ALEC and another national far-right organization FreedomWorks made Matt Huffman their legislator of the week.

A nationwide right-wing bill mill, ALEC creates model bills, including bills for tax credit vouchers and education savings account vouchers, and sends its model bills into the 50 statehouses with the intention that at least in some places they will be enacted into state law. FreedomWorks defines itself: “FreedomWorks exists to build, educate, and mobilize the largest network of activists advocating the principles of smaller government, lower taxes, free markets, personal liberty and the rule of law.”

But ALEC and FreedomWorks are not the primary advocates testifying in in state legislatures for the launch of school vouchers—or in states like Indiana and Ohio, the expansion of school vouchers. In Indiana, the Milton and Rose D. Friedman Foundation for EdChoice, now formally named EdChoice , describes its purpose: “EdChoice is a 501(c)(3) nonprofit, nonpartisan organization. Our team is driven by the shared mission to advance a K–12 education system where all families are free to choose a learning environment that works best for their children.” This is doubletalk for the idea of substituting universal school choice at public expense for a system of public schools.

In Ohio, aligned in purpose with EdChoice, is the Buckeye Institute, a nonprofit that actively and regularly floods the statehouse with lobbyists. In the area of education, the Buckeye Institute says its purpose is, “Giving all children the best education through school choice and returning local control to every community.”  And it announces a special priority: “Support education savings accounts for parents to personalize their children’s learning experience and save for college.”

EdChoice and the Buckeye Institute are both members of the State Policy Network (SPN), which SourceWatch describes as, “a web of right-wing ‘think tanks’ and tax-exempt organizations in 50 states (see this interactive map), Washington, D.C., Canada, and the United Kingdom. As of August 2020, SPN’s membership totals 162. Today’s SPN is the tip of the spear of (a) far-right, nationally funded policy agenda in the states that undergirds extremists in the Republican Party… SPN groups operate as the policy, communications, and litigation arm of the American Legislative Exchange Council (ALEC), giving the cookie-cutter ALEC agenda a sheen of academic legitimacy and state-based support.”

Where does the money behind this State Policy Network of organizations come from?  In a major 2013 investigation of the State Policy Network, SourceWatch reported that it is hard to know, because funding mostly flows through DonorsTrust and the Donors Capital Fund, dark money sources that do not name individual donors: “The largest known funder behind SPN and its member think tanks are two closely related funds—DonorsTrust and Donors Capital Fund… They are what are called ‘donor-advised funds,’ which means that the fund creates separate accounts for individual donors, and the donors then recommend disbursements from the accounts to different nonprofits. It cloaks the identity of the original mystery donors or makes it impossible to connect donors with recipients because the funds are then distributed in the name of DonorsTrust and Donors Capital Fund.”

SourceWatch has identified some major contributors in addition to DonorsTrust to the State Policy Network and its so-called “think tanks,” including the Walton Family Foundation: $1,725,000 (2014-2019); the Bradley Foundation: $1,570,000 (2014-2019); and the Sarah Scaife Foundation: $840,000 (2016-2018).

Unfortunately knowing about pro-voucher organizations and even some of the groups which are funding all this activity does not make it any easier to advocate against this kind of massive influence peddling for vouchers and tax credit vouchers and education savings account vouchers across our state legislatures. In an important new book, Schoolhouse Burning, constitutional law professor Derek Black explores the serious challenge posed by dark money and groups like ALEC, the State Policy Network, Ohio’s Buckeye Institute, and Indiana’s EdChoice. Derek Black believes the threat is greatest in the nation’s most vulnerable communities serving Black, Brown, and poor children:

“(T)he interests of those pulling the political and financial levers behind the scenes to expand charters and vouchers do not align with disadvantaged communities. Their goal, unlike that of minority communities, is not to ensure that each and every child, regardless of wealth, race, or religion, receives an equal and adequate educational opportunity. The powerful interests behind the scenes want a much different system of government than the one our founders put in our state and federal constitutions. Undermining public education is a big part of making that happen. Education, they say, is ‘the lowest hanging fruit for policy change in the United States today.’ In their minds, the scales of justice should tip away from mass democracy and the common good toward individualism and private property. That means less taxes, less government, less public education. While couched as more liberty, what they really mean is that government should let the chips fall where they may. It isn’t government’s job to ensure equal participation in democracy.”  (Schoolhouse Burning, p. 19)

Derek Black believes those of us who are committed to public education must not merely be persistent in opposing all kinds of school privatization. We must also be prepared clearly to articulate why public schools are so important: “Public education represents a commitment to a nation in which a day laborer’s son can go to college, own a business, maybe even become president. It represents a nation in which every person has a stake in setting the rules by which society will govern itself, where the waitress’s children learn alongside of and break bread with the senator’s and the CEOs children. Public education represents a nation where people from many different countries, religions, and ethnic backgrounds come together as one for a common purpose around common values. We know that the idea has never been fully true in our schools, but we need to believe in that idea… The pursuit of that idea, both in fact and in mind, has long set us apart from the world….” (Schoolhouse Burning, p 250)

In Ohio a School Voucher Expansion Has Been Introduced in the Legislature. What Does It Mean?

In Ohio, where privatization has been expanding since the 1990s—with five kinds of school vouchers plus a large and unregulated charter school sector—Matt Huffman, a state senator from Lima has proposed consolidating three of the state’s voucher programs into one and expanding its reach into the middle class. Ohioans have been watching school privatization expand for decades, and it is not difficult to predict the impact of the expansion of vouchers.

Unlike some other states, Ohio did not see a rash of new school startups to take advantage of the three voucher programs which would be folded together into the new plan. Vouchers first began in Cleveland and then expanded to other large cities.  Patrick O’Donnell of the Plain Dealer recently documented: “The vast majority, 97% of money from Ohio’s three main tuition voucher programs goes to private religious schools.”  O’Donnell then lists the top twenty schools in the state receiving vouchers. All of the schools are religious. Sixteen are Catholic schools—ten of them in Cleveland; one is a Cleveland-area Lutheran school. Sixteen of the twenty are in Ohio’s big cities, with three in suburbs of those cities, and one in a smaller city. None is located in a small town or rural area. (The fourth and fifth Ohio voucher programs serve only students with disabilities; they are are smaller and unrelated to Huffman’s new proposal.)

While some other states have seen a rash of schools established by entrepreneurs trying to benefit from new voucher programs (see Erin Richards’ piece on Milwaukee), profits to be made from school privatization in Ohio have derived almost entirely from the unregulated charter sector. All sorts of people have rushed to get a piece of the charter school action—non-profits that sought to benefit from becoming sponsors or authorizers just to get the three percent of state money provided for the non-profit that is supposed to provide adequate oversight but rarely follows through—investors like David Brennan who runs White Hat Management Company, which runs the Life Skills Academies that supposedly help adolescents with dropout recovery—William Lager of the on-line Electronic Classroom of Tomorrow (ECOT), which is known for collecting over $100 million in tax dollars ever year even though attendance of up to two-thirds of the students appears to be fraudulent and who owns the two lucrative for-profits that provide all of  ECOT’s curriculum and daily management—the mom and pop operators who have been caught buying expensive vacations and cars with the tax dollars that are supposed to be paying for children’s education.

In Ohio, the vouchers have diverted a large and growing stream of tax dollars (that used to support the state’s over 600 public school districts) to religious schools, usually managed by the state’s Catholic Dioceses. And a primary problem this year as Ohio’s legislature looks at Huffman’s voucher expansion is that the state faces a serious budget crunch resulting from several years of income tax cuts.  Here is Jim Siegel of the Columbus Dispatch: “State revenue is tumbling, led by weakening Ohio income tax collections, and the state budget director is warning lawmakers to prepare for less available money in the upcoming budget… Overall, total state tax collections came in $203 million below estimates in March, leaving that revenue $615 million below estimates through nine months of this fiscal year, or 3.7 percent.  The revenue is coming in low even though state budget officials revised their estimates downward in June of last year by $280 million.  While it’s unlikely to hurt the current budget that ends June 30… the lower-than-expected revenues are expected to negatively impact how much money is available for the new two-year, $66.9 billion budget currently under debate in the House.”

Senator Huffman’s voucher expansion—Senate Bill 85—is to be called Opportunity Scholarships.  The new plan would fold together three different voucher programs—the Cleveland Scholarship (the old Cleveland voucher program), EdChoice, and EdChoice Expansion (both statewide programs that now serve children in low-scoring schools). The Ohio Legislative Service Commission (LSC) explains what would be the fiscal consequences of Huffman’s proposal for the state budget and for school districts. (The Plain Dealer‘s Patrick O’Donnell also summarizes the LSC’s analysis.) First of all, the old voucher programs were designed originally to serve students in poverty.  Huffman’s proposal raises the income cap for students who would qualify to 400 percent of the federal poverty guidelines—which means that for a family of four, children could qualify for a voucher with family income of up to $98,400.  LSC calculates: “Statewide, an estimated 74% of children come from family incomes below 400% of the federal poverty guidelines, the threshold to qualify for an Opportunity scholarship. A total of 1.08 million public regular education students are estimated to be eligible for Opportunity scholarships.  Hypothetically, if all such students opt for the new scholarship, net state costs would be roughly $1.19 billion per year.”  The new bill provides vouchers of $4,650 for students in grades K-8 and $6,000 for high schoolers.

How quickly would this program grow?  The Legislative Service Commission speculates that, “Ultimately, the cost of the program will depend on state appropriation levels.”  In simple terms this means that, because the program funds the vouchers from the state’s general revenue fund, the legislature itself would determine the size of the program through debate about the biennial state education budget and the appropriations process.  There are several ways, however, that the program has built-in growth.  First, once a student has a voucher, that student “may continue to receive the scholarship in subsequent school years until the student completes high school.” Further, the new plan stipulates that students cannot already be enrolled in a private or religious school and apply for the voucher. They “cannot have been enrolled in a chartered nonpublic school in the school year prior to the year for which an Opportunity scholarship is sought.” However, that stipulation omits one very significant group of students: those entering Kindergarten. At issue in Ohio’s old EdChoice voucher program has been the number of children who never planned to attend public school but have instead secured a voucher for Kindergarten at a religious school and then kept the voucher all the way through high school. Additionally the new program automatically qualifies students who already have a voucher under one of the old programs along with the siblings of students who have secured a voucher.

What would be the impact of Huffman’s Opportunity Scholarship vouchers on local school district finances?  While the old vouchers were “deductions of the state foundation aide allocated to the student’s resident district,”  the new vouchers would come right out of the state’s general revenue fund, and the children receiving a voucher would no longer be counted at all in any school’s average daily membership. Here is what the Legislative Service Commission says: “Because the state’s school funding formula is based on enrollment, school districts with students who take the scholarship are likely to lose state aid. Over time, the reduction could be substantial, but ultimately would depend on participation rates. School district expenditures may decrease due to educating fewer students.”  We know, of course, that school districts cannot quickly adjust fixed costs when students leave for any reason. And the Legislative Service Commission reports that, as with the old voucher programs, public school districts would be required to provide school bus transportation to all children within the radius of a 30 minute bus ride to the voucher school from the site of the public school to which the student would normally be assigned.

Finally, Huffman has added an Education Savings Account (one of the pet programs of the American Legislative Exchange Council—ALEC) to his new voucher plan.  The Legislative Service Commission explains: “The bill requires ODE (Ohio Department of Education) to establish and maintain an education savings account for each Opportunity scholarship student whose scholarship amount exceeds the students’ tuition and fees… The bill permits a student or parent to use the money in the student’s education savings account for eligible future primary, secondary, and post-secondary education expenses….”   As with several aspects of Huffman’s new plan, the presence of an education savings account may be a clue to Huffman’s hope for ways to use the plan as a a mere beginning—the barest foundation on which school privatization can be expanded in the future.

The most serious concern about Huffman’s new program is its potentially overwhelming cost.  In the proposed voucher expansion, the public will be paying to educate in private schools a large and growing number of Kindergarten children who would never have attended a public school, and paying for their education all the way through high school.  The new plan also expands the voucher program to qualify families in the middle class—according to the Legislative Service Commission, 74 percent of the state’s children. But there is no plan to expand the state’s education budget to pay for the education of thousands of students who would never have planned to enroll in a public school and would  likely have attended a religious school anyway. The assumption that public school districts can reduce fixed services, dollar-for-dollar when students leave—especially when the public schools will serve the mass of homeless students, disabled students and English language learners, is fanciful.

With five different kinds of vouchers and a plethora of unregulated charter schools, Ohio’s super-majority Republican House and Senate and Governor John Kasich have proven to be enthusiastic supporters of school privatization. Despite that a new report sponsored by the pro-privatization Thomas Fordham Institute found that students in voucher schools have been scoring significantly lower in math on standardized tests, our legislators seem not to be overly concerned.

The public, however, ought to be very concerned about the further diversion of state funding to support private religious schools at a time when voters have already been forced again and again to increase local millage to replace diminishing state education dollars.  The public also ought to be concerned about other significant problems for public schools that will be exacerbated if Ohio vouchers are expanded:

  • Public school districts are required by law to serve all children and adolescents residing within their boundaries; the religious schools accepting vouchers are free to select their students through admissions tests, applications, and interviews.
  • Public schools are required to provide appropriate services under the Individuals with Disabilities Education Act; religious schools are likely not to accept blind or deaf or multiply-handicapped children who require expensive services.  Nor are private schools accepting vouchers required to provide adequate services for English language learners.
  • While the slice of the state education budget for the state’s over 600 public school districts will be inevitably be reduced overall if the private school voucher program is expanded, public school districts in rural areas and small towns will be in the position of losing state dollars to subsidize private religious schools in more populated areas.

Finally, while the U.S. Supreme Court found Ohio’s vouchers constitutional in a First Amendment challenge (the 2002 decision in Zellman v. Simmons-Harris), because the “scholarships” are said to be given to the parents who choose the school (rather than paid as state grants directly to religious schools), many people remain seriously concerned with Ohio’s vouchers as a violation of the Constitutional separation of church and state. While the U.S. Constitution prohibits state “establishment” of religion, and while it protects any person’s “free exercise” of religion, voucher schools across Ohio regularly expect their students to join in the religious practices of the schools’ sponsors.