ESAs, School Choice, and the Nevada Education Revolution

**2016 Update** Neal Morton of the RJ¹⁾One of the few who survived the purge, not that I want to jinx it reports that oral arguments for Nevada's school choice bill will be on Friday.

There are 2 lawsuits, both against the state. One was filed by a group of Carson City parents (Schwartz v. Lopez), the other by the ACLU (Duncan v. State of Nevada). Both will be argued on Friday.

I reread the essay below, and I do want to tell you all that I have moderated my stance a bit when it comes to school choice. As you'll see, last year I found the idea absurd on its face. Between now and then, I've talked with Nevada parents that support this law, and they persuaded me to moderate my views a bit. I can come back to you one year later and admit that at least now I can understand why a parent of a child in a fail school would want this bill²⁾The fact this wasn't readily obvious to me is a failure of the school choice campaign which seems to only discuss this problem on a child-to-child basis, rarely addressing the aggregate.

For those (likely childless like me) that are looking at education from an abstract, aggregate view³⁾To those parents out there who just want us to but out, we care too. I promise I am not just giving you a hard time, this bill looks as suspicious now as it ever has.

I'm sure there are a number of good-intentioned parents that just want their kids to go to the best school possible, and in the short term, supporting this bill seems like the best way to reach that goal. I'm not too concerned with these good folks.

I am worried though that there are people using our education policy debate to graft public money⁴⁾The attorney general is paying more than $500,000 dollars to outside (the state) counsel to argue the case (with your tax money). Also, as you will see, private firms get to take a transaction fee on your ESA, which of course is not defined in the law. I wish more people at the state level shared this concern.

I stand by everything I wrote last July, and we should insist that the state answer at least some of my questions below before radically upending our education system.

 

Is This What They Meant By School Choice?

The Nevada legislature had quite the busy 2015 session. Besides the new law reforming gun control, the most famous/notorious bill passed was Senate Bill (SB) 302, which creates education savings accounts (ESA) for those parents that want to take their kids out of public school.

From a perusal of the press writings on SB 302, there seems to be much more speculation than fact regarding the new program.

Today, I will take you through the text of SB 302 and discuss its advantages/disadvantages without (hopefully) degenerating into partisan name-calling.

 

How SB 302 Changes Education in Nevada

Well the change could be quite profound; it will all depend upon how the state implements SB 302, and how many folks decide to take advantage of the new program. But before all that, let us avoid getting the cart before the horse and take a glance at the text of SB 302.

The bill is quite a bit longer than others we have discussed on the Clear Counsel Legal Blog, so with the hopes of keeping you engaged, I have excerpted the most pertinent parts for you and your children⁵⁾read the entire bill here.

The fun begins in Section 7, which authorized the education savings accounts. Here is subsection 1:

 

Section 7.

1. Except as otherwise provided in subsection 10, the parent of any child required by NRS 392.040 to attend a public school who has been enrolled in a public school in this State during the period immediately preceding the establishment of an education savings account pursuant to this section for not less than 100 school days without interruption may establish an education savings account for the child by entering into a written agreement with the State Treasurer, in a manner and on a form provided by the State Treasurer. The agreement must provide that:

(a) The child will receive instruction in this State from a participating entity for the school year for which the agreement applies;

(b) The child will receive a grant, in the form of money deposited pursuant to section 8 of this act in the education savings account established for the child pursuant to subsection 2;

(c) The money in the education savings account established for the child must be expended only as authorized by section 9 of this act; and

(d) The State Treasurer will freeze money in the education savings account during any break in the school year, including any break between school years.

 

According the media accounts, the Nevada treasury plans on issuing debit cards to parents who opt-in to the program, and these cards will have the funds loaded onto them at an interval determined by the treasury.

The most controversial issue of Section 7 is the 100 days minimum attendance at a public school before a student will have access to the funds.  As I am sure you can guess, no one is happy about this term of the bill.

Smaller private schools are worried that hordes of students will unroll from their current private schools to meet the 100 day requirement, then come back in the spring term⁶⁾read more here  The smaller private schools claim that their finances will not be able to survive a mass exodus, and staff layoffs would ensue.

There is some talk of the state permitting kids to enroll in one public school class for the 100 days requirement, but the practicalities of that have not been worked out⁷⁾Would the kid go to public school from 8am to 9am, then head off to private school? Who will drive him? May the student just take a single, online, public-school course during the fall semester; is that sufficient? We are all waiting for clarification.

Folks that have been paying private school tuition are irritated as well; they claim they have been contributing toward public education all this time with no (direct) benefit to their own families.

Why should they have to jump through hoops to get what is rightfully theirs⁸⁾your property taxes do not just go toward educating your own children, but in educating the communities children. If that does not move the dial for you, think about how less likely an educated person will turn to a life of crime and debauchery. We all benefit from a safer community.?

The answer may be that the state is protecting against fraud.  Just imagine how fast this program would go belly-up if folks did not need to establish long term residency in the school districts.

What if a child is only partly educated in the public schools? Subsection 3 of Section 8 provides guidance:

 

Section 8:

3. If a child receives a portion of his or her instruction from a participating entity and a portion of his or her instruction from a public school, for the school year for which the grant is made, the grant required by subsection 1 must be in a pro rata based on amount the percentage of the total instruction provided to the child by the participating entity in proportion to the total instruction provided to the child.

Is “total instruction” this based on time or coursework? Who makes the determination of the pro-rata share? This has not been clarified ⁹⁾Rarely are laws put into effect too quickly, but this might be an example.  I see the potential for trouble.

 

How May You Utilize These Education Funds?

Those suspicious of the program are concerned that folks will open an education savings account and not properly allocate the funds towards their child’s education¹⁰⁾this would be fraud.  Luckily, SB 302 specifies how the funds may be spent:

 

Section 9

1. Money deposited in an education savings account must be used only to pay for:

(a) Tuition and fees at a school that is a participating entity in which the child is enrolled;

(b) Textbooks required for a child who enrolls in a school that is a participating entity;

(c) Tutoring or other teaching services provided by a tutor or tutoring facility that is a participating entity;

(d) Tuition and fees for a program of distance education that is a participating entity;

(e) Fees for any national norm-referenced achievement examination, advanced placement or similar examination or standardized examination required for admission to a college or university;

(f) If the child is a pupil with a disability, as that term is defined in NRS 388.440, fees for any special instruction or special services provided to the child;

(g) Tuition and fees at an eligible institution that is a participating entity;

(h) Textbooks required for the child at an eligible institution that is a participating entity or to receive instruction from any other participating entity;

(i) Fees for the management of the education savings account, as described in section 10 of this act;

(j) Transportation required for the child to travel to and from a participating entity or any combination of participating entities up to but not to exceed $750 per school year; or

(k) Purchasing a curriculum or any supplemental materials required to administer the curriculum.

 

A good start! In particular, I like the cap on transportation costs in subsection (j)¹¹⁾the last thing we need is folks spending all their kids’ education money on new wheels.  The majority of the list seem like good areas to invest in for a child’s education, but how is a parent, who is not a professional educator or accountant, to know how much of the funds should be allocated to what area? Hopefully, the state plans on offering some guidance.

Additionally, subsection (k)’s reference to “supplemental materials” raises a few red flags.  Could not most items, if construed by a creative enough person, be considered “supplemental” to a child’s education? This type of catch-all may be taken advantage of unless the state clarifies.

How will the state enforce the terms of section 9? See Section 10:

 

Section 10.

1. The State Treasurer shall qualify one or more private financial management firms to manage education savings accounts and shall establish reasonable fees, based on market rates, for the management of education savings accounts.

2. An education savings account must be audited randomly each year by a certified or licensed public accountant. The State Treasurer may provide for additional audits of an education savings account as it determines necessary.

3. If the State Treasurer determines that there has been substantial misuse of the money in an education savings account, the State Treasurer may:

(a) Freeze or dissolve the account, subject to any regulations adopted by the State Treasurer providing for notice of such action and opportunity to respond to the notice; and (b) Give notice of his or her determination to the Attorney General or the district attorney of the county in which the parent resides.

 

I can hear my friends on the left getting upset already. The bill is supposed to provide more school choice for at-risk kids, but now “private financial management firms” are permitted to take “reasonable fees” to administer these accounts.  I caution my tree-loving friends; do not just assume this is just another scheme for private companies to get into the coffers of public education monies.  Give it at least until January to see what they mean by “reasonable fees,” but by all means, keep tabs on the going-ons.

Also, it is important to note that if you sign up for an education savings account, it is possible that your spending of the funds will be randomly audited at some point in the year. If I was using an education savings account during this first run, I would keep all my receipts given that there is no telling how strict an audit this may be.  The national press has been making hay out of this new program,¹²⁾apparently it is the most extreme voucher program in the country now so folks will be just itching to catch fraudulent behavior. Be careful!

 

A Few Questions About Nevada Education That Are More Important Than School Choice

Since the state has until January to implement the new program, there is not more information available into the mechanics of how the education savings accounts will be implemented.  We know that students with education savings accounts will have to take a math and English test each year to demonstrate progress, but it has not been clarified which test, and if all the students have to take the same test.

I think folks from all sides can agree that we need to improve our education system in Nevada. No matter the metric used¹³⁾Kids Count released a report at the beginning of the week ranking Nevada 47 out of 50 states, Nevada schools continue to be near the bottom of the rankings. From this starting point, each political side immediately begins talking dollar and cents.

My liberal friends want to spend unlimited amounts on education, while my conservative friends are irritated on how the money is being spent, and want to apply market dynamics to help improve the system.

I want to take a step back and ask the question that should come before all the money inquiries: what are our collective goals to be reached by our education spending? What do we want of our kids to be able to do by the time they graduate? Really try to be specific in your answer. Throwing money at unspecified problems will result in unspecified results.

Let me put it this way: what is the bare minimum we should expect of a graduating high school student? Is it imperative that kids be able to fluently understand all the different topics offered in the high schools, or are there necessary topics we need them to know, and anything additional would be gravy?

But an even more fundamental question: what do we want our kids to take away from more than 12 years of education? Civic engagement? A love of learning? The school curriculum is designed as if this will be the last chance for child to ever learn anything ever again; so instead of going into depth in a few topic areas,¹⁴⁾and thus exposing kids the highest level of joy that Plato spoke of, the joy of understanding we teach very little of a lot of topics.

Is this the best approach? Ask a random graduate of the Clark County school system a random science/social science/humanities question that was covered in high school. How much did s/he retain?

We may need to come to terms that we cannot teach kids everything they need to know about life in the 13 years we have to educate them. And if that is the case, I ask again, what should our goals be?

I applaud the Assembly and Governor for not being satisfied with the status quo and perhaps their bill will lead to a large growth in specialize charters (like Washington D.C. has) that can better meet the needs of a diverse student population.

But I worry that only students with very engaged parents to get the real benefits of the program.  For those kids with parents that are less engaged ¹⁵⁾for whatever reason, they will remain in public schools with even less funds¹⁶⁾I assume that the state will withdraw the funds from the schools with less students, without the fellow students who are most engaged in the curriculum.

The last thing we need are those kids already behind the others to fall even further back.

If the goal of our public education system is to help those who have manifested a desire to help themselves, then this might be the best course of action.

However, before I would radically alter our education framework, these are some of the questions I would ask. Then I would see if my proposed reforms were the most efficacious means to achieve my goals.

At least in Clark County, we have too many unengaged students in overcrowded classrooms taught by overextended/underpaid teachers.  A desire for change is not unreasonable.  Instituting change without knowing how or why, might be.

All the links you need for further reading:

The RGJ on parents demanding payments

The RGJ on the legislature passing the education reforms

EdWeek on the public policy implications

The Education Writers Association has 10 questions about the new law

The Washington Post on the political implications

The Washington Post has the statistics on education spending by state

US News thinks the new reform will increase inequality

The Las Vegas Sun on a potential Constitutional challenge

The National Review celebrates the new reforms (without calling anyone a Nazi)

The Text of SB 302