Back-door vouchers for the well-heeled?

Hypocrisy alert: Vouchers for the well-to-do

Among the first pieces of legislation out of the gate after the Legislature's summer recess is a package of bills in the state Senate creating an "enhanced" Michigan Education Savings Plan. This proposal would allow parents to make tax deductible contributions to an account which could be used to pay for K-12 school expenses. (The plan would be an addition to the existing plan which covers post-secondary education.) The bills - SB 544 through SB 549 - were sponsored variously by Senators Patrick Colbeck (R-Canton Twp), Phil Pavlov (R-St Clair), Judy Emmons (R-Sheridan), and Mike Green (R-Mayville). The Senate Fiscal Agency summary of the bills as reported from committee can be found here.

Sounds OK, right? A little tax break for setting aside money for those athletic fees? Well, hold on to your wallet. The SFA estimates that the cost to set up the program could reach $100 million, with indeterminate costs after that - on top of tax revenue losses from the deduction. Families could deduct up to $5000 (single return) or $10,000 (joint return) of contributions per account.

Do they really expect parents to believe that they would spend $100 million of taxpayer money and offer deductions of up to $10,000 in contributions just so we could pay for sports fees and field trips?

But wait, there's more: districts, charters and ISDs would be required to list "eligible" expenses in various categories - everything from core instruction to extracurricular activities. All 'public' schools would be able to receive payments from these savings accounts, though not for "core" services because public schools must offer a free education. But the Department of Treasury (not Education) could designate "other organizations" providing any or all of those services which would also be eligible to receive payments. Can you say "private schools"?

In fact, the main changes made to the bills in committee was to add language which allowed "other organizations" to receive funding, in addition to public schools (though that's not how they were described in the meeting). The only requirement for using these accounts is that the student be enrolled in one course in a public school - even a minor course from an online vendor would do, apparently.

This is clearly intended to build the infrastructure for back-door vouchers - for the well-heeled, since a tax deduction is only useful if you have a decent taxable income. And since the money is contributed by the families, the prohibition in the Michigan Constitution against using public funds to operate private schools probably would not apply. It's not a true voucher yet - at this point, the State isn't putting money into the accounts. But families have to have enough money to contribute in the first place. Basically, it's giving some families a nice tax deduction for paying private school tuition - at the cost of $100 million and more that could be used to improve our public schools and other public services.

If our Legislature really wants to help public school parents out, they could simply make some education-related expenses partly deductible, and avoid spending $100 million to set up managed investment accounts. Even better, they could increase overall funding to public schools so that no parents would have to pay the various fees which were created to cope with budget cuts. But that would not accomplish their real objective.

In many ways, this bill package is a clear case of lawmakers listening to "their mistress' voice," since Michigan billionaire and now US Secretary of Education Betsy DeVos has championed the adoption of "education savings accounts" as a way of getting around residual opposition to vouchers. (Follow the link for a cautionary tale from Nevada.) While Michigan's constitutional prohibition on using public money to operate private schools might prevent the state from contributing directly to Sen Colbeck's e-MESPs as other states have done, the Legislature has been busy trying to chip away at that prohibition as well.

Another way of looking at the mandate for public schools to break out costs for all services, including core instructional services, is that they are preparing the path for a "one from column A and two from column B" menu system as envisioned in the Oxford Foundation report and the Governor's "skunk works" proposals. Both of those centered on giving students a kind of "debit card" with which they would purchase individual nuggets o'education from various "education service providers" (to use the term Sen. Colbeck favored in his introduction to the current bill package). Since Michigan must offer a free public education, this menu-based system must be publicly funded, at least for core instructional services. But why else force districts to slog through the process of costing-out an hour of kindergarten, since they could not charge families for those services? In that sense, the bills kill two birds with one stone: it gets a kind of back-door voucher system into law, and also lays the groundwork for an eventual "unbundling" of public education.

The sales job on these bills is shockingly brazen, even by Michigan legislature standards. Sen. Pavlov, the committee chair, said "Only in public education can we have a debate on providing it more money," according to Gongwer. In his introductory slide deck, Sen. Colbeck mentioned (but did not calculate) how much money might come to Detroit Public Schools if all children had maxed-out savings accounts - despite the fact that half of all Detroit families with children live below the poverty line. Most of the statewide public school associations indicated their opposition, though only AFT-Michigan testified against the bills. Sen. Colbeck objected to the AFT's Julie Rowe saying that the bills could open up funding for private schools, saying that the legislation was geared only at public schools. Ms. Rowe responded, correctly, that language in the package would allow the Dept of Treasury to certify "other organizations" which provide core instruction and other services to be recipients of the funds:

"The Department [of Treasury] may designate other organizations that provide core and noncore instruction services, extracurricular and support activities, and course materials as eligible to receive payments from the program." (SB 545 S-1, p.2)

Sen. Colbeck himself noted that because the funds in these accounts would be private funds, the Michigan Constitution's ban on public funds for public schools would not apply. The only restriction in the bills on students eligible to use the accounts is that they be "enrolled in at least 1 course in a public school." In our view, that hardly qualifies as restricting the system to full-time public school students.

All bills in the package were reported out of committee and sent to the full Senate on 4-1 party-line votes.