The Truth About Utah’s New Voucher Laws

I’ve always supported means-tested education vouchers because they are a good deal for taxpayers, parents, and students. Choice allows parents to find education options that are best suited for their children. Competition improves the quality of public schools as it does everything else it touches.

Nobel Prize laureate Milton Friedman proposed this free market solution to improving America’s schools 50 years ago. Friedman showed that diverting a portion of public school enrollment to the private sector at a lower cost than taxpayers would have to spend to educate these children in district schools is a benefit for school districts and taxpayers, including those taxpayers whose children stay in public schools and those who don’t have any children.

Additionally, vouchers improve education quality by providing the essential element of market competition. This creates a rising tide which lifts all boats, especially for those who remain in government schools. Competition forces teachers and administrators to view students and their parents as customers whose needs must be met rather than captives who must accept whatever neighborhood education bread line is available.

In the jubilee year of Friedman’s proposal and the year of his passing, Utah, the reddest of the red states passed the most comprehensive voucher law to date. Under HB148 and HB174 parents can receive vouchers amounting to $500 to $3000 per year, depending on family income, to assist them in sending their child to a private or parochial school of their choice. The legislature appropriated $9.4 million – less than three tenths of one percent of the $3.5 billion public education budget – to provide these vouchers for choice in education.

Referendum filed by education establishment to repeal HB148

Immediately following the end of the legislative session, Utah’s affiliate of the National Education Association (NEA) filed a referendum to repeal HB148, but not HB174 because it passed by a 2/3 margin in each house and therefore, cannot be subject to referendum. By promoting a referendum to repeal HB148 (education vouchers), the NEA’s local affiliate is trying to undo the good work that Gov. Huntsman and the Utah Legislature have done for the taxpayers of the state.

Referendum would not repeal vouchers, but does repeal the ransom payments

The repeal of HB148 may actually improve Utah’s voucher law. Repealing HB148 would not repeal vouchers because HB174 supersedes HB148. However, HB148 contained an unsavory provision which required taxpayers to pay mitigation money, or in other words a “ransom” to school districts for allowing students to receive a voucher. The ransom money would ensure that government schools get full funding for five years for each student who leaves with a voucher even though the student is no longer in the classroom! Therefore, repeal of HB148 might actually be a good thing because it would leave the best of the voucher law in place.

Are ransom payments justified?
Vouchers will not financially harm public schools, which means so-called “mitigation” funds are unnecessary. School districts spend about $6,400 per student. Nearly all of this cost is variable. That is, as enrollment growth is slowed in growing districts or enrollment decreases in declining districts due to vouchers, district costs would be less than they otherwise would be. Growing districts won’t have to hire as many teachers or build as many schools as they otherwise would. Clearly, so-called “fixed costs” are not an issue with growing districts. Instead of spending $6,400 per student, taxpayers would be spending on average about $1,900 per voucher student diverted to the private sector.

Declining districts can also reduce so-called fixed costs by shifting school boundaries and/or consolidating schools (which they are already doing).

Vouchers will save all taxpayers money, especially without ransom payments

Bottom line: by diverting students to the private sector at an average cost of $1,900 per student, districts will have more money to spend per student for those students remaining in the public system.

If 3,000 students switch, taxpayers will save about $4,500 per student, or about $13.5 million in total, which more than offsets the cost of the few hundred existing private school students who may qualify for the voucher (Only existing private school students whose 4 member family income is $38,000 or less can qualify for the voucher.)

Convincing the naysayers

Many people have a visceral aversion to vouchers or tuition tax credits because the myths have been repeated so often by the educrats that they are believed. It’s sometimes hard to understand what vouchers actually do, but I have found that when I make the following explanation, many of those who thought they were opposed to vouchers change their mind:

“A voucher is a tool to find parents who will volunteer to have fewer tax dollars spent for their child’s education.  By accepting a voucher, parents agree to spend their own money at a private or parochial school to add the $500 to $3000 voucher instead of the $6,400 taxpayers are currently spending annually for that child’s education.”

I explain to them that in other words, vouchers find parents who are willing to use only 8% to 46% (depending on family income) of the current tax dollars for their child’s education. In a state facing the influx of 150,000 new students over the next ten years without a known funding source for their education, vouchers provide a way to get parents to voluntarily pay for most of the education of their own children. Isn’t that a good thing?