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Published in Print: February 25, 2015, as Some States Put Parents in Charge Of Pupils' Aid

Some States Put Parents in Charge of Student Spending

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Imagine an education system where state funding goes directly to parents, who use that money to piece together customized instruction for their children. For some families in Arizona and Florida, this latest evolution in school choice is already the reality.

Those two states are pioneering what are called education savings account programs, or ESAs. For some advocates, these programs represent the fullest realization of the school choice movement's ideals: near total parental control and customization, all while lowering the cost of educating students by encouraging parents to save money. Lawmakers in other states, such as Mississippi and Oklahoma, have been introducing measures this year to set up similar programs.

"Whether it's journalism, education, or medicine, we're all moving toward customization," said Doug Tuthill, the president of Step Up for Students, a nonprofit organization that helps manage Florida's education savings account program. "The question is, what does the funding mechanism look like? Well, the ESA is that: it's a funding mechanism aligned to customization."

Next Frontier in School Choice

Lawmakers in at least nine states have proposed bills this year to create education savings accounts. Generally, ESAs provide state funding to parents of eligible children to spend on approved educational expenses.

Georgia: HB 243, “Georgia Education Savings Account Act”
All students who attended a public school the previous semester would be eligible. The state would be required to reach out to low-income families to make them aware of the program.

Illinois: HB 427, “Illinois Education Savings Account Act”
For students from low-income families.

Iowa: SF 240, “An Act Relating to Education Saving Grants”
Students attending a nonpublic school the previous year would be eligible.

Mississippi: SB 2695, “Equal Opportunity for Students With Special Needs”
Students with special needs would be eligible for the five-year pilot program.

Montana: HB 322, “The Montana Special Needs Education Savings Account Program”
Students with disabilities and their siblings, students in foster care, and children with a parent in the military would be eligible.

Oklahoma: SB 609, “Oklahoma Education Empowerment Act”
All students who previously attended a public school and children with a parent on active-duty status in the military would be eligible.

Tennessee: SB0027 & HB0138, “Individualized Education Act”
For students with special needs who have an individualized education program, or IEP.

Virginia: HB 2238, “Virginia Parental Choice Education Savings Account”
For students with disabilities.

Oregon: HB2770, “Oregon Empowerment Scholarship Program”
Students who previously attended public school and have either disabilities, are wards of juvenile courts or the state department of human services, or qualify for free and reduced-price meals would be eligible.

But, much like school voucher programs, any initiative directing public money away from regular districts often gets strong pushback and raises serious questions that range from accountability to viability.

Education savings account programs gives money based off of the state's per-pupil funding to parents of eligible students to spend on approved educational expenses. To qualify, a student generally must have a disability—although Arizona's program has expanded to include other types of students.

Florida followed Arizona into this new territory this school year. Both states are known for their ambitious, sometimes divisive school choice initiatives. And both have large charter school sectors and have offered voucher and tax-credit scholarship programs to varying degrees of success.

Florida's First Year

Florida's program, called Personal Learning Scholarship Accounts, is only for students with certain disabilities like autism, cerebral palsy, or Down syndrome. Participants receive an average of $10,000 a year to spend on qualifying expenses ranging from tutors and private school tuition to more niche expenses such as horse therapy. Money that isn't spent can be saved for college expenses.

About 1,400 students are using ESAs in Florida this school year—among them is 10-year-old Simon Martinez. Simon was born with a genetic disorder called Glutaric Aciduria, and as a baby had an ear infection and high fever that, combined with his disorder which had not yet been diagnosed, caused significant brain damage that affects his gross motor functioning.

"He's been on a feeding tube since he was six months old," said Eva Martinez, Simon's mother. "But his intellect is fine."

Simon attended a public school until he started protesting by pulling out his feeding tube. In 1st grade, his mother began teaching him at home.

At first, the family relied largely on the public library for education supplies, but since opening up an ESA this year, they have spent about $5,000 to buy video-based curricula, as well as a computer and tablet. Ms. Martinez also plans to hire a tutor who specializes in helping children like Simon communicate.

But the law that created Florida's Personal Learning Scholarship program is being challenged in court.

The ESA program was part of a bill passed last legislative session that also expanded eligibility for the state's tax-credit scholarship program, originally for low-income students, to include more middle-income students.

Tax-credit scholarship programs allow businesses or individuals to claim tax credits for donations made to state-approved organizations, which then provide the money to eligible students to use toward tuition at private schools—many of which are religiously affiliated. Tax-credit scholarships differ from traditional voucher programs in which the state gives money directly to families for tuition at private schools.

The Florida Education Association, the statewide teachers' union, is backing the lawsuit that claims the tax-credit scholarships are unconstitutional because they ultimately funnel public money to private schools. FEA's main legal dispute is with that program, said Joanne McCall, the union's vice president, but the group also has concerns with the ESA program.

'Only So Much in the Pie'

"There's only so much in the pie, and if you keep carving up the pie, then you're losing money for the public schools," she said. And, Ms. McCall added, state money for special needs and exceptional students for district schools has declined in recent years. "We certainly believe that students deserve services, but I'm not sure this is the way to do it," she said.

Arizona's ESA program, called Empowerment Scholarship Accounts, faced, and withstood, a similar legal challenge also led by the state's teachers' union.

Created in 2011, Arizona's ESA program was, in many ways, the outcome of a protracted legal battle over the state's original voucher program, which was ruled unconstitutional by the Arizona Supreme Court in 2009 because it provided public dollars directly to private schools, and to private schools only. In that decision, the court left open the possibility that a voucher-like program could be structured to remove that conflict.

"They left us a trail of breadcrumbs to follow," said Matthew Ladner, who worked at the Phoenix-based Goldwater Institute, a conservative public policy and advocacy organization whose legal arm also helped defend the ESA program. "I took the hint from that, and we published a new paper at the Goldwater Institute basically calling for an account-based choice program for special needs kids that would have multiple uses including private schools," he said.

Mr. Ladner, now a policy and research adviser for the Foundation for Excellence in Education—the advocacy organization founded by former Florida Gov. Jeb Bush—thinks ESAs are superior to vouchers.

"Parents have a pretty powerful incentive to be cost conscious under an ESA model, which is lacking in a voucher model, because they can save [the money]," he said. "That's the critical innovation in my mind."

The Ashton family, in Phoenix, did just that for their son, who is blind. With a little more than $18,000 a year from the state, the Ashtons sent him to a high-performing private high school, bought specialized supplies such as Braille textbooks and talking calculators, and still saved $8,000 for college expenses.

Max Ashton, 18, is now a freshman at Loyola Marymount University in Los Angeles. Prior to the ESA program, he attended a public school, as well as a private school with the help of a separate tax-credit scholarship program. The scholarship didn't cover costs for the additional supplies he required.

Marc Ashton, Max's dad and the CEO of the Phoenix-based Foundation for Blind Children, fiercely defends the state's ESA program. "I'm not against public schools, but I wished I had the option to pick the best school for my daughter like I did for my son," said Mr. Ashton, whose daughter has autism and attended school before the program existed. "I saw both sides of this coin. My son is excelling now, and my daughter was left behind—same school district."

Arizona's ESA program has since expanded beyond students with disabilities to include those who attend schools that are rated a D or F in the state's accountability system, and students who are in foster care and those with a parent in the military.

"Talk about pulling on the heartstrings, how can you say no to these people?" said Kevin Welner, the director of the National Education Policy Center and an education policy professor at the University of Colorado Boulder. For skeptics of vouchers and other forms of choice, such as Mr. Welner, targeting ESA programs to students with special needs is a savvy way to get a bill passed, and from there, proponents can slowly expand the program to include broader swaths of the student population. "It's the camel's nose under the tent," he said.

Regulation is at the heart of the issue—and whether there's enough of it for programs like these, Mr. Welner said. "Using an ESA or a voucher mechanism to provide education immediately raises questions about supervision and accountability," he said. "Those are all things that a public education system has in place, however imperfect."

There is momentum in Arizona to expand the program even more this year. One proposed bill would make children living on Indian reservations eligible for the ESA program, while the other would open the program up to students who don't win a seat in a charter school through a lottery.

Meanwhile in Florida, a lawmaker wants to broaden the program to make more students with special needs eligible, and Gov. Rick Scott allocated an additional $5 million to the program in his proposed budget for fiscal 2016. Currently, the program is budgeted at a little more than $1 million.

Related Blog

Despite all the talk about growth, Mr. Tuthill, the head of the Florida organization that helps oversee the state's ESA program, prefers a slow pace of expansion.

"This is like a beta program," said Mr. Tuthill. "We're still struggling with the avalanche of invoices and how to manage that in a cost-effective manner."

A few lawmakers in about a dozen other states are pushing for ESA programs, but Mr. Tuthill thinks it will be a little while before the idea takes off on a larger scale.

"People are going to wait for all the kinks to get worked out," he said. "Once we get to scale in a state like Florida, and we're serving thousands of kids, I think other states will jump in."

Vol. 34, Issue 22, Pages 1,19

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