School Choice Makes “Cents” for Oregon’s Budget

By Jeff W. Reed

As Oscar season winds down, Oregonians should remember their own cinematic achievement filmed and based in Oregon: One Flew Over the Cuckoo’s Nest. In the Oscar-winning movie, Jack Nicholson’s character acts crazy to forestall facing hard time. Oregon’s actions of late aren’t so dissimilar.

In the wake of the passage of Measures 66 and 67, Oregonians will learn the difficult lesson that no state has ever taxed its way to prosperity. Taxing the “rich” and corporations to meet state budget needs may seem like a good idea at the time; but before long investors will stop investing and businesses will start leaving, eroding state revenue even more.

There is no question Oregon has to pay for its public services. But rather than tax their way into the black, Oregonians should reform their way forward. Recessions, after all, happen for a reason: They’re a warning sign to operate more efficiently and effectively. And in no place is this needed more than in public education.

A new study by the Foundation for Educational Choice found that if Oregon could reduce its number of high school dropouts, the state could save up to $400 million annually through fewer Medicaid enrollees, lower incarceration rates and more personal income tax revenue. That is more than the revenue Measures 66 and 67 are expected to raise. And unlike tax increases, improving graduation rates is a solution that won’t have negative effects on Oregonians down the road. To the contrary, it will have positive ones.

Surprisingly, Oregon can improve its graduation rates without tax increases or greater public spending. It’s not as difficult as some might expect. It just requires the “nuts” to have some “guts,”as Nicholson’s character phrased it.

Private school choice programs–specifically vouchers and/or tax credits for scholarship granting organizations–have shown that more can be done with less in education. Currently, 24 school choice programs operate in 15 states and the District of Columbia, serving some 160,000 students. Moreover, an additional 650,000 students’ educational costs are being reduced, thanks to personal tax credits. These programs, unnecessarily controversial, use state revenue more effectively, save taxpayers money, help students realize academic gains and satisfy families’ unique needs.

First, the academics: In a 2008 study, Dr. Patrick Wolf of the University of Arkansas found that of the ten separate analyses of “gold standard” experimental studies of voucher programs, nine conclude that some or all of the participants benefited academically from using a voucher to attend a private school. None conclude there is a negative effect.

And then there are the savings. In 2007, Dr. Susan Aud found that school choice programs in place between 1990 and 2006 produced $444 million in net savings to state and local budgets. That may not seem like a lot of money given today’s billion- and trillion-dollar spending programs; but when opponents charge that school choice programs cost states more money, the evidence shows that is not true.

In addition, families participating in private school choice programs are more satisfied with their children’s new schools. In a 2009 evaluation of Washington, D.C.’s Opportunity Scholarship Program, the United States Department of Education’s Institute of Education Sciences found that “[p]arents were more satisfied with their child’s school and viewed their child’s school as safer and more orderly. Parents want what they deem best for their children, and school choice allows that opportunity. Perhaps unsurprisingly then, a 2009 opinion poll by the Foundation for Educational Choice found that 87 percent of Oregonians would prefer choosing their child’s school from among such options as charter and virtual schools, private schools and homeschooling.

So in Oregon, where Cascade Policy Institute reports the average cost per public school student is more than $10,000, if a program were created in which students could receive a maximum scholarship of half that amount, $5,000 could be saved per student who uses a scholarship to leave a public school for a private one. If just 10 percent of Oregon’s 561,468 public school students took this opportunity, savings to the state of Oregon would exceed $280 million. If 20 percent took it, Oregon would save more than $560 million.

Call me crazy, but that’s a lot of money–particularly for Oregonians who seem willing to do anything for some cents.


Jeff W. Reed is a state program director for the Foundation for Educational Choice in Indianapolis.

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Posted by at 06:00 | Posted in Measure 37 | 57 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bill Sizemore

    Teachers unions like the OEA want every child in public school. The OEA and AFT oppose education choice and they back up their monopoly preference with millions of dollars of campaign cash.

    There are many benefits to school choice, which go far beyond the obvious cash savings for taxpayers. But teachers unions across the country, orchestrated and backed by the NEA, consider each individual school choice project a hole in the dike and attempt to plug each one, lest the dam break and they lose their de facto monopoly of the education business.

    Want school choice? You have to defund the teachers unions or it is not going to happen. They won’t let it happen.

  • Rupert in Springfield

    Nothing crystallizes the lack of interest in real solutions that work than Salems refusal to address this issue. We could get the job done for substantially less and with better results.

    One can obfuscate all one wants, but the truth is undeniable – Comparisons between public and private schools are as close to an apple to apple comparison as one can get without demanding the sub atomic particles that make up the comparison be identical. Private schools give better results with less money.

    The up side – School choice gives better results, or certainly equal results at less cost.

    The down side – Teachers unions are reduced in clout as parents flee their clutches.

    Obviously Salem is going to side with the teachers union.

    Conclusion – Oregon government is not about serving you, it is about serving itself.

  • Oregon Red

    Amen! Vouchers are the way to go because competition in the market would cause schools to compete or go away! I read a good article a while back on it here http://bit.ly/b4aJUq that you should read too.

    The cascade policy institute report was extremely upsetting but somehow not surprising. I’ve personally seen the Beaverton School District waste money and you know what they always want? More money. When you sit and listen to school board meetings, council meetings, and the like, do you know how often you will hear them say “how can we streamline and save costs to do more with less”? Never. It just doesn’t happen and that’s why Government run programs will always continually grow in cost and size.

  • Richard B

    Privatization and deinstitutionalization not school choice.

    The problem is government control. The education system in America is a institutional, centralized planed, forced attended (truancy laws), forced funded (taxes), bureaucracy. School choice dose not address the problem of a big, over regulated, government controlled school system and at typical repose by conservative-statist. Worst School choice allows an avenue for government regulation of private schools. Finally, as in Washington DC, any school choice will be defeated because competition is a threat to the state and union controlled school system.

    The real choice and reform is first a constitutional amendment separating school and state prohibiting tax funding, and truancy laws (except for research am military programs).

  • RB in EO

    I have no disagreement with the premises that (a) competition breeds better education and (b) vouchers finance choice in schools.

    However, there is one minor difficulty with voucher systems – our fundamental underpinning, the US Constituion, declares that government should not support any religious organizations. Because many private schools of excellent quality are parochial the voucher system should not apply to these schools under the “Separation Clause.”

    Where do your tax dollars go?

    • Rupert in Springfield

      >our fundamental underpinning, the US Constituion, declares that government should not support any religious organizations.

      No it doesn’t. No where in the constitution is this mentioned. In fact religious institutions get funding all the time, either through not being taxed, or through federal programs, such as when Bush allowed support for programs like AA through his Faith Based initiative.

      >Because many private schools of excellent quality are parochial the voucher system should not apply to these schools under the “Separation Clause.”

      Except for the fact that there is no “Separation Clause” in the constitution.

      In fact there is no clause – What you are referring to is the first amendment. The concept of “separation” was developed in something known as the Lemon test, which was about how much entanglement government had in the religion. Since government would be giving vouchers that could be used regardless of denomination, that hardly seems to be excessive entanglement.

  • dartagnan

    “but before long investors will stop investing and businesses will start leaving”

    Still waiting for the predicted 66-and-67-induced mass exodus of businesses from Oregon. When can we expect it to start?

    • Rupert in Springfield

      Plenty of businesses have been listed for you when you have posed this in the past. Seems kind of pointless to be in denial about it at this stage.

    • Pinkie French

      You need to wait until April 16, 2011. The story of revenues to the state coffers will tell the truth. My bet is they will go down. Such is what happens when taxes are increased and jobs are lost…. Yet the one trick pony marches on….

  • retired UO science prof

    More nuttier stuff here! Read:

    “Recessions, after all, happen for a reason: They’re a warning sign to operate more efficiently and effectively. And in no place is this needed more than in public education.”

    Decoded: “Public education is the most inefficient and ineffective thing in — all of society? — and besides, we can infer, is the cause of the current recession.”

    In other words, I guess if we have more charter schools, the recession will end, jobs will appear, we will all make more money?

    This is nuts completely, totally, utterly nuts!

    • Anonymous

      If we had education choice. Parents could take their children out of a school that was failing to teach their child. If enough parents felt the same, that school would have to address the problem and improve, or go out of business.

      Our children deserve what is best for their education.
      It is time to let the parents decide how their tax money is spent, on their child’s needs.

      It is time to put our children needs first and Choice does just that.

      This will make public and private schools better,
      lets do it for the children!

      • retired UO science prof

        Maybe so — though I’m skeptical that “school choice” is the answer — but blaming the recession on the public schools is no way to make the case! Frankly, it just discredits the whole idea.

        • Anonymous

          Allowing parents to do what is best for their child, is always better than getting lost in the education bureaucracy, that doesn’t always do what is best for the individual. If they don’t fit in the group.

          After all, isn’t this all about the children and their future?

          • retired UO science prof

            Do the parents always know best? I have my doubts. When I was growing up, there were people who didn’t want their kids to have any education (other than Sunday school/ Bible school). I can’t go for that.

            Anyhow, my point was mainly about connecting the recession with public schools, which I think is CRAZY!

            If this is the conservative argument, then conservatism is doomed!

        • Rupert in Springfield

          Well, since you are the only one who suggested the recession was caused by public schools then that implies that you consider yourself discredited.

          No one but you ever suggested the recession was caused by public schools.

    • Rupert in Springfield

      Um ok, let me get this straight:

      You are taking a statement about the efficiency of public schools needing to be improved, then “decoding” it into a statement you want to have an argument against, and the arguing against that?

      Seems to me that little procedure is the one that what’s utterly nuts. It certainly is argumentative masturbation, since you are arguing against a point only you made and was no where in the original article.

      I’m not sure what you were a professor of, but perhaps you could elucidate us all on this penchant liberals have for taking a statement making a ludicrous extension of that statement, and then arguing arguing against the ludicrous extension, which no one but the zany liberal ever made?

      Could you please tell us who dreamed up this ridiculous line of reasoning that is so easy to point out as a fallacious that it becomes tedious in the extreme?

      Absent that, could you please show us a group of people it is actually effective on? I mean yeah, maybe, some dopey college kids might fall for this line of argument, but I am talking about in the adult world.

      Does anyone ever actually buy this sort of thing?

      • retired UO science prof

        Who dreamed this up? The author! When he said:

        “Recessions, after all, happen for a reason: They’re a warning sign to operate more efficiently and effectively. And in no place is this needed more than in public education.”

        There is a connection made there, sorry to tell you, and I didn’t make it. It was the author. Who elsewhere says “Call me crazy”. Well, the craziness is there. Not mine! Drink the kool-aid if you want, but don’t blame me.

      • valley p

        Rupert writes: “Except for the fact that there is no “Separation Clause” in the constitution.”

        OK. I’ll defer (in this case) to your superior constitutional scholarship. So what we have is a political issue. Let me try an analogy. Conservatives, particularly abortion rights opponents, go a bit nuts if any of their tax money (or anyone’s tax money) is used to pay for abortions for poor women. I, as a secular person, have a similar objection to taking my tax money (or anyone’s I guess) and using it to support religious institutions. And since most private schools are religious institutions, that makes supporting vouchers problematic.

        • Anonymous

          I prefer to have better educated children than to protect the government monopoly union systeem, that is failing many of our children.

          We need to do it for the children.

  • Anonymous

    dartagan “Still waiting for the predicted 66-and-67-induced mass exodus of businesses”

    What a perfect demonstration of the left’s confusion and distortion of what business is.

    “Still” waiting?
    What? You think it’s been a long time in the time scale of business relocation?

    Look fool, relocation takes awhile. There’s many reasons and circumstances which disallow an immediate move. Common sense and planning for instance.

    The idea that you’re still waiting is asinine.

    • Anonymous

      Businesses don’t move over night, they slowly make the decision as they need to, to fit their needs. They first start my not hiring as many people as they would otherwise. Or new businesses don’t pick Oregon over other states. Portland came out stating businesses taxes were down 20 million and Portland is another 20 million short. Or some small businesses, just go out of business.

      The majority of jobs are from small businesses, making over $250,000.

      You can’t hire too many people, if your only bringing in 250,000 a year!
      I know many small businesses that are gone or are still teetering on the edge.

      66 & 67 has been a disaster to the private sector, while the public sector is hiring and handing out raises!

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