School Choice: Options for expanding educational freedom and bringing real reform

Excitement about school choice is helping to remake North Carolina public and private schools. Enrollment in charter schools is exploding. More students than ever are being educated in virtual and home schools. While private school enrollment has dipped slightly (four-tenths of one percent) since 2008-09, due in large part to the recession,  private education  is still healthy and expected to grow. In the past four years, twelve new private schools have opened in North Carolina. In response to these changes, public schools are expanding offerings and programs to meet the changing needs of students and parents. Here in Wake County, two new single-sex academies are opening. Also in Wake County, parents of students in the state’s largest school district waited for hours to be able to enroll their son or daughter in the school of their choice.

Such realities tell us what most of us already know: North Carolinians want more choice in education. Recent poll results confirm these findings. In July, a poll commissioned by the Center for Education Reform revealed some interesting findings. Close to 70 percent of North Carolinians support the creation of new charter schools and the opportunity to choose among a wide variety of schools. In a January 2012 Civitas Poll, 50 percent of registered voters supported providing parents with vouchers to allow parents to send children to non-public schools. Other national polls echo similar sentiments. According to recent PDK/Gallup Poll, 44 percent of Americans now favor allowing students to choose a private school to attend at public expense. Support for school choice jumped 10 points in one year.

One question logically emerges from these developments: What policies can lawmakers adopt to expand school choice in North Carolina? Let’s consider three options.

Tax Credit Opportunity Scholarships.  Patterned after a highly successful program in Florida, Tax Credit Scholarships are intended to give children from lower incomes access to what many other children already have: a chance at a quality education. Last session Rep. Paul Stam (R-Wake) introduced legislation (HB 1104) to do so. The bill provided businesses with dollar-for-dollar tax credits for contributions to scholarship organizations. Scholarships of up to $4,000 would have been provided for children from households at or below 225 percent of the federal poverty line, approximately $50,000 for a family of four. Total credits would be limited to $40 million. HB 1104 faced stiff opposition from advocates who felt the legislation took money from the public schools. The bill was not voted out of committee.

Tax Credit Scholarships have advantages and disadvantages. That tax credit scholarships are targeted exclusively on needy recipients makes them more appealing to some politicians. Some education reformers, however, fear that because the number of recipients is so limited the program will be too small to infuse real reform into the public schools. Even though tax reform efforts in the North Carolina General Assembly may complicate its future, most expect some form of Tax Credit Opportunity Scholarship to be reintroduced in the spring legislative session.

Vouchers. The simplest of all school choice ideas, vouchers represent a government tuition payment. The amount of the payment is often tied to a percentage of tuition or portion of per pupil spending. A state voucher representing 90 percent of state per-pupil spending would equal about $4,800 in North Carolina.

Vouchers have the advantage of being a relatively easy concept for people to understand. There is some precedent for vouchers in North Carolina.  Parents of Pre-K students can use vouchers for day care. In addition, college students can use legislative tuition grants to attend private institutions in North Carolina. Vouchers also offer the opportunity to have widespread impact on targeted populations or school systems. They also offer ready incentives to educational entrepreneurs and are relatively easy to expand.

However, vouchers are not without critics. Accountability rightfully follows the receipt of public tax dollars. Some private institutions express concern that accepting voucher students will mean the need to comply with additional state regulation and the loss of institutional control. Another disadvantage is public sentiment. Many people view vouchers as merely an instrument to facilitate the shift of tax dollars from public to private schools. The negative perception obviously impacts the salability of such proposals. In January 2012, 50 percent of respondents to the Civitas Poll said they supported vouchers made directly to parents to help them pay tuition at any non-public schools, 39 percent opposed the idea and 11 percent were uncertain.

Education Savings Accounts.  Education Savings Accounts, or ESAs, are one of the most popular tools for assisting parents with educational expenses.. Recently, states have begun to look more closely at using ESAs as a means to foster school choice. Arizona has the largest ESA program in the country.[1]  The original Arizona legislation deposited in the ESA accounts of parents of special needs children an amount equal to 90 percent of the state per pupil spending for special needs students — about $13,000. Arizona residents can use ESAs for approved educational expenditures such as tuition, textbooks or tutoring. Any money left in the account can be used for college expenses. The ESA program has since been expanded to serve students who attend failing schools, adopted and foster children, and the children of active military personnel. The program currently serves about 230,000 students in Arizona.

ESAs have several advantages. First, ESAs are easy for parents and students to understand. By providing families an incentive to select the best school, ESAs infuse a healthy element of competition into the public schools. Also, because ESAs are controlled by parents, the funds do not constitute direct aid to private or religious schools. Therefore ESAs are more likely to sidestep the regulatory entanglements and constitutional issues that are commonly associated with vouchers.

On the downside, educational expenditures have to be monitored. Consequently, additional administrative personnel must be hired to ensure that educational expenditures comply with regulations.

Recent trends make clear that North Carolinians want expanded educational opportunities. Tuition tax credit scholarships, vouchers and education savings accounts offer different ways to expand educational choice and bring much-needed reforms to public education. Are there any more compelling reasons as to why school choice should be near the top of the policy agenda when North Carolina lawmakers reconvene next year?

[1] For a good primer on education savings accounts see: Education Savings Accounts: Questions and Answers, Jonathan Buettcher, Goldwater Institute, 2012  and Education Savings Accounts: A Vehicle for School Choice, Dan Lips, Goldwater Institute, 2005

This article was posted in Education by Bob Luebke on August 29, 2012 at 5:19 PM.

© 2011 The Civitas Institute. Visit us on the web at
This article can be found at

Comments on this article

  • 1

    Andy Perrigo
    Andy Perrigo Aug 30, 2012 at 9:52


    A helpful article. Have you examined the AZ mosel for Scholarship Tuition Organizations? That model expands the base of recipients to even include public schools. The downside is there is fierce competition for donations. Upside is that large companies can offer check-offs for charities- including STO’s and the corporations can donate in exchange for tax credits. STO are organized to target specific groups of people. Some STO’s are setup to help kids be able to participate in extra-curricular activities in the public schools.

Leave a Reply

Sorry, due to spammers you must have Javascript enabled to make comments.

Raleigh Web Design, WordPress & Web Development