Setback for Groundbreaking School Choice Program Could Have Broader Fall Out

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When it was passed two years ago, Nevada’s education savings accounts—a voucher-like program­—was hailed as the most ambitious private school choice program in the nation because it was open to all of the state’s nearly 460,000 public school students.

But legal challenges and shifting political winds in the state have stalled that program indefinitely. School choice supporters are split on what the turn of events in Nevada means for the momentum of other similarly-styled programs nationwide.

A last-ditch legislative effort to fund Nevada’s education savings accounts—which would give all public school students the option to take state money allocated to them and use it for private school tuition or other approved education-related expenses—crumbled in the face of uncompromising Democratic opposition. The Nevada legislature won’t meet again until 2019, essentially leaving education savings accounts dormant for the thousands of families that have applied to use them.

"It’s very disappointing, of course, especially for the 8,000 plus families that applied," said Matthew Ladner, a senior research fellow at the Charles Koch Institute who helped craft and defend the first law of this type.

"The program is still there. Lawmakers could pick this up in the future, but right now, this is a pretty bitter setback."

In Arizona, by contrast, lawmakers this year dramatically expanded the state’s education savings account program, which was created in 2011. After years of incremental expansion, Arizona’s program is now open to all 1.1 million public school students.

ESA-related bills were proposed in 18 states this year, according to the Foundation for Excellence in Education, which helped craft and pass Nevada’s bill in 2015. None, besides Arizona’s, have passed.

"Nevada set the stage in terms of a universal program," said Adam Peshek, the director of education choice at the foundation, an education reform group founded by former Florida Gov. Jeb Bush. "I think it in many ways helped Arizona to turn their program into a universal program this year. … The benefit of Nevada is that they set the precedent."

Starting a Trend?

Passed in the final days of the 2015 legislative session under a Republican-controlled statehouse, Nevada’s education savings account program shook the education world. Education savings accounts were a relatively new policy idea that originated in Arizona and were popping up in a few other places as an alternative to traditional school vouchers. Like vouchers, the early ESAs had fairly strict restrictions on who could use them and were often limited to students with disabilities or from low-income families.

Education savings accounts, or ESAs, allow states to place all, or nearly all, the state money earmarked for a student in a special account that parents can draw on for approved educational expenses, including tuition at private, religious schools. In Nevada, that would amount to more than $5,000 per student.

When Nevada’s universal program was passed, voucher advocates predicted that other states would quickly follow suit.

But the groundbreaking program never fully launched because of disputes over how to pay for it. While more than 8,000 families signed up for education savings accounts, the state was blocked from distributing funds until legal challenges to the program were resolved. Two separate lawsuits made their way to the Nevada Supreme Court, where justices ruled in October that the program was unconstitutional because of how it was funded.

However, the state’s high court didn’t rule that the program itself was unconstitutional on the grounds of funneling public money into private, religious schools, leaving a path open to advocates: find a new funding source, and education savings accounts could be resurrected.

But doing so became substantially more difficult when Democrats took control of the Nevada legislature in November.

And public scrutiny over the types of families that were seeking to use ESAs put the program on the defensive.

"There was data that showed that a lot of applicants who signed up were from affluent neighborhoods, not low-income neighborhoods," said David Sciarra, the executive director of the Education Law Center, a national legal and advocacy group that helped launch one of the lawsuits against the education savings account program. "The whole issue of unaccountability of the private schools and no anti-discrimination requirements, things like that, a lot of those issues really surfaced during the court case."

And then there was the national debate happening over school vouchers spurred on by President Trump and Betsy DeVos, his education secretary. The Trump administration continues to signal that expanding school choice is a priority and anti-voucher groups, such as Nevada’s statewide teachers’ union, worked diligently to tie Nevada’s education savings account program to the president and DeVos. It’s a tactic that education advocates opposed to vouchers have been deploying across the country, but whether it’s working isn’t clear just yet.

"The exact impact the federal debate is having on the state level, is really difficult to say," said Ladner.

At the beginning of Nevada’s legislative session, Republican Gov. Brian Sandoval proposed carving out $60 million from the state’s general fund to pay for the accounts, but Democratic lawmakers refused. The subsequent power struggle between Democrats and Republicans over the education savings accounts program nearly derailed the entire state budget for fiscal 2017-19, but lawmakers reached a compromise with less than 24 hours left in the legislative session—one that didn’t include funding for the education savings accounts.

Tax-Credits to Business

But school choice advocates didn’t walk away from the session completely empty-handed. The budget deal contains an extra $20 million over the next two years for a separate private school choice program that has a cap on how much a family can earn in order to be eligible for the aid. The Opportunity Scholarship program was also passed in 2015, but at the time it was eclipsed by the much more ambitious education savings accounts program. It gives tax-credits to business for donating to a private school scholarship program.

That one-time infusion of funds will come from taxing marijuana sales and growers, which was a priority for Democratic lawmakers. Marijuana was legalized in the state through a ballot initiative last fall.

Both voucher supporters and opponents don’t think it’s over for Nevada’s ESA program. Among them is Ladner, of the Charles Koch Institute, who said many of the issues that made ESAs attractive to lawmakers and families in the first place, such as extreme overcrowding in the public schools, still exist.

And then there’s the supreme court’s ruling, which leaves the door open, said Rubin Murillo, the president of the Nevada State Education Association.

"For us it’s all about making sure that we listen to what the concerns are about our public school system and that we act on them, not just pass the concerns along," he said. "We absolutely have to act upon it, that’s what’s going to be our ally in terms of fighting the funding of vouchers in the future."

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