Thursday, February 2, 2017

HB236: The War on School Choice

Today, the Governor's budget was assigned its bill number, HB0001. This is, of course, the big item for the session, but there are many other bills that set policies in key areas. One of them is HB236, the school-finance omnibus bill. 

Currently, HB236 is on the desk of the Education committee. It is likely to make it out of there in essentially the same shape as it went in, sponsored as it is by the House Education Committee. That would, however, be unfortunate, for two reasons:
  1. The bill essentially declares war on school choice, banning new "alternative" schools for the next couple of years - and more;
  2. Governor Mead has declared that our state's fiscal problems are confined to the education system. 
These two problems are related. To see how, let us begin with the governor's declaration. By stating that our state's only budget problem is in education, Governor Mead has put more legislative spotlight on education during this session than is normally the case. On the one hand, he distracts attention from the real problem behind our state's deep fiscal problems, namely unsustainably large government, thereby postponing long-term solutions. On the other hand, though, it is now more relevant than ever to talk about education reform - real education reform - and give it high legislative priority. 

To follow up on this de facto invitation to talk about education reform, I have proposed structural, free-market based reforms to K-12 education to lead us toward a smaller, fiscally more sustainable government. A school-choice reform in Wyoming, based on the Milwaukee model, would cut the costs of our education system by more than $330 million per year - and that is a conservative estimate. We would preserve, even improve, on academic quality and trim away excessive administrative overhead.

Since Governor Mead has made the cost of education such a big issue, you would think that the legislature would be open toward win-win-win solutions: lower cost, more parental choice and preserved or improved quality of education. Unfortunately, that is not the case: HB236 is every bit as statist as you would expect it to be, were it written by lawmakers with a strong progressive slant.

Which brings us to the other problem mentioned above, namely some troubling policy proposals in HB236. Stubbornly, this bill preserves government monopoly on education. It suggests that school districts shall continue to have complete control over the establishment of "alternative schools", meaning private education alternatives and thereby school choice (see page 9 of the bill). 

Furthermore, the bill wants to impose a statewide ban, on any new private schools over the next two and a half years (page 10):
No new alternative school shall be approved under this subparagraph during the period beginning March 15, 2017 and ending June 30, 2019.
This ban now ties back to the governor's talk about an education funding deficit. HB236 basically repeats and reinforces one of the key phrases from Governor Mead's State of the State speech in January, namely that his budget is "bare bones". 

Here is how it works. Private-school alternatives would reduce the cost of education while providing equally good, or better K-12 education. Thereby, they would prove the point that I and many others have been making for quite some time, namely that our government sector here in Wyoming is over-bloated and can be made to work better if trimmed, run more efficient and concentrated on its core duties.

That, in turn would prove that Governor Mead was wrong when he stated that his budget is "bare bones" and thereby implied that our largest-in-the-nation government workforce is staggering and stumbling under a barely-endurable workload. If private schools outperformed our public schools, it would provide free-market based evidence that Governor Mead, and the education statists in the legislature, are all wrong. 

And we cannot have that, can we...?

It does not help the case for HB236 that it also proposes a sales-tax increase in order to protect the public-school monopoly (pages 16-17).

Do not doubt for a moment that the legislative leadership will push hard to get HB236 to the governor's desk unchanged. They are running back and forth, up and down, in and out of every corner of the legislature to make sure that the prevailing narrative of a house in fiscal order is preserved. All we need to do, the story goes, is to give up more money (such as $4,000 per person per year) to maintain our state's educational status quo.

As one good indication of where the legislative leadership is heading, consider HB150 by Representative Madden:
AN ACT relating to education; establishing the tax credit scholarship program; specifying duties of the state superintendent; providing program requirements; authorizing severance tax credits; providing definitions; providing rulemaking authority; providing a sunset date; requiring reports; providing applicability
Sounds good, does it not? Well, there are just a couple of problems with this bill - problems that lead toward the conclusion that Madden has ulterior motives with his proposal. I hope I am wrong drawing that conclusion, but the burden of proof would be on his shoulders. 

The main problem with HB150 is that Madden's scholarship model is egalitarian (page 4; emphasis added):
Provide a preference for awarding tax credit scholarships to students in the following order of preference: (A) Students from families with a household income that is seventy-five percent (75%) or less of the median household income for the county where the student resides; (B) Students attending schools in school districts which are determined to have capacity concerns; (C) Students attending schools that are identified as not meeting expectations under W.S. 21-2-204(e)(i)(D); (D) Students that received a preference under this paragraph in a previous year.
In other words, this scholarship will operate just like any other redistributive entitlement program (think Food Stamps or SNAP; Medicaid; the Earned Income Tax Credit). You benefit from it so long as your income is below a certain threshold. Once your income rises above that threshold, you are kicked out of the program. 

Let us say that you live in Natrona County. In 2015, the median household income in that county was $52,886, placing the threshold for the scholarship at $39,665. A rough estimate says that children from approximately 11,900 households would be eligible for the scholarship in Natrona county. Assuming that one third of the 20,000 children in the county aged 5-19 live in these households, there would be 6,700 children eligible for Representative Madden's scholarship.

Here is the problem with this egalitarian model. Little Johnny's parents apply for the scholarship. They qualify under the 75-percent rule (item A in the quote above) because they make $38,000 per year. Little Johnny is ecstatic, loves his new school and thrives academically. 

Next year, though, little Johnny's dad gets a promotion, which raises his income just above the 75-percent line. All of a sudden, little Johnny no longer qualifies. He has to leave the private school and get on the school bus back to his neighborhood public school.

But wait a minute - does not item D in the quote above guarantee little Johnny a place in the program for next year? 

Nope. Item A, the 75-percent rule, supersedes item D. This means that if there are other kids who qualify under the scholarship program's 75-percent rule, one of them gets to take little Johnny's spot.

And there will be other kids. According to the fiscal note for HB150 - which for a change is actually quite thorough - there will only be money for the scholarship to 572 kids in the entire state of Wyoming. 

Which brings us back to the school-finance omnibus bill, HB236. That bill puts a ban in place on private schools for the next two and a half years, and beyond that gives school districts full discretion to approve or deny the establishment of private schools. Unless Representative Madden plans to put up a fierce fight for school choice, his scholarship program would be nothing more than a shiny piece of scrap metal. 

Or, to be blunt: egalitarian window dressing. 

Usually, I try to abstain from speculating over ulterior motives in politics. At this point, however, I have to ask whether Representative Madden's scholarship proposal is just a way for him to legitimize himself as a "conservative", given the fact that his name appears on practically every bill that proposes a tax increase. 

Instead of passing HB150, and instead of allowing HB236 to go to the governor's desk unchanged, the legislature needs to stand up for real, actual educational freedom in Wyoming. It makes perfect fiscal sense as it cuts costs while retaining or improving academic quality; it also makes perfect sense from a philosophical viewpoint, as it puts parents in charge of their children's education. 

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