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.