May 9, 2023

There’s more at stake than just money. GETTYMilton Friedman was not only a brilliant economist, but he was prescient on the potential for markets to drive a demand for education freedom. In 2005, when educational mediocrity was on the rise, he predicted there would be a breakthrough in how we deliver education. “We shall get a universal voucher plan in one or more states,” he said. And sure enough, Friedman was right, even if his prediction was a long-time coming and not yet fully realized.

He first discussed his idea for universal education savings accounts in his 1955 essay, “The Role of Government in Education.” Arguing that empowering parents with the right, and resources, to choose schools for their children would spur competition. With these financial resources, Friedman wrote, “Parents could express their views about schools directly, by withdrawing their children from one school and sending them to another…” This, Friedman reasoned, would lead to greater efficiencies, cost effectiveness and improved overall quality of education.

Friedman’s thoughts weren’t put into action until 34 years later when, in 1989, Wisconsin passed the nation’s first funding legislation. To be fair, the motivation here was not to test Friedman’s economic theories. It was far more personal and practical. Milwaukee public schools were failing to provide children with an education and parents had no way to enroll them elsewhere.

To address this crisis – and for the families whose children were trapped in failing schools, it was a crisis – Wisconsin adopted the Milwaukee Parental Choice Program. Authored and championed by education freedom pioneer, Assemblywoman Polly Williams, the program was the first in the nation to allow public funds to be used to help low-income families enroll in private schools and to give parents options in where their children were educated.

Fast forward another 34 years to today and we still see Friedman’s thoughts on education savings accounts pushing their way into the mainstream. Arkansas, Florida, Indiana, Iowa, North Dakota, Ohio, South Carolina and Utah all have recently implemented or expanded funding programs (with many more possible). This is good news for families in those states. The bad news, however, is that current formulas, which rely on only state dollars for funding, badly short-change families that adopt this option.

Part and parcel to the idea behind education saving accounts is that money spent on education would follow the student; that the $38,000 a year slated to be spent this coming school year to educate a student in New York’s public schools would be available to that student to spend at any other school of his or her choosing. But because only a portion of these state funds are tapped for these accounts, and not local funds, the reality is, these options, if available, would be worth less than half that amount.

Take Indiana, which just expanded its scholarship program to nearly 97% of the state’s families. A public school student in Indianapolis can expect the district to spend about $14,500 on her, while a private school student using a scholarship will receive only 90% of the state tuition payment, approximately $6,043 in the 2021-2022 school year. The remaining funds, state and local, remain with the district despite students leaving.

The same will occur when Oklahoma and Texas enact their education freedom programs, based on a portion of state dollars only, holding districts harmless from the effect of students that may choose non-district schools. That’s not because choice-friendly governors want it that way, but because policymakers in general are under the impression that local dollars need to stay in local coffers, despite the fact that local dollars are supposed to serve all students from those communities.

It’s unfair, and until the other half of these funds follow the child, rather than the school system, parents who choose education savings accounts will always be playing with one hand tied behind their backs. To date, the success and growth of these policies has relied on governors and state legislators. Their work and leadership, supported and encouraged by millions of parents, has resulted in legislation that is making education savings options a reality. But that has only brought us halfway home.

To realize the full potential of choice programs and education freedom, local officials – mayors, city councils, county governments – will need to become active in making this funding fair and equitable.

A first step in achieving local engagement to make full and fair funding a reality is to encourage a small, but crucially important, change in perspective. Most local officials would explain their efforts to support families and learning as providing “money for schools,” or “funding for education” or “money for classrooms.” But in reality, it’s none of these.

Local leaders are providing money for children – to learn, and grow, and live happy, fruitful, prosperous lives. They are helping to fund parents’ efforts to provide the best opportunities for their children. They’re not funding “classrooms.” They’re funding people.

When viewed in this context, local leaders can begin to appreciate the logic, reward and fairness in transforming local “school funding” dollars into “child education” dollars. They’re not there yet but with encouragement and support from their communities, they’ll get there and fully funded education saving accounts will become a reality.

Let’s just hope it doesn’t take another 34 years.

Founded in 1993, the Center for Education Reform aims to expand educational opportunities that lead to improved economic outcomes for all Americans — particularly our youth — ensuring that conditions are ripe for innovation, freedom and flexibility throughout U.S. education.