It's a business model.
This year, legislators in Virginia have offered at least four bills to enact education savings accounts. While there are distinctions between the bills, each one is a bad deal for Virginia taxpayers, providing little oversight or accountability for how taxpayer’s education dollars will be spent.
Education savings accounts are super-vouchers. While the older form of school voucher allowed families to apply state monies to tuition at a private school, ESAs allow parents to spend state money on any assortment of educational or education-related expenses. Advocates often try to avoid the term “voucher,” which has a history of political failure.
HB 1371, sponsored by Del. Phillip A. Scott, was the first one prefiled. It was followed by HB 1396, sponsored by Del. Marie March. SB 823 was introduced by Sen. Amanda Chase, and HB 1508 is the most recent bill, brought forward by Del. Glenn Davis. All of the bill sponsors are Republicans.
The bills are very similar, with some small but significant differences.
Who qualifies for the voucher?
SB 823 offers the strongest limits, restricting eligibility to students with a family income of less than 300% of federal poverty guidelines. Students must have spent at least the two previous semesters in public schools. HB 1508 has no income limits, but requires students to have spent one semester in public school.
Offering the widest eligibility, HB 1371 and HB 1396 are open to all residents of Virginia regardless of income or previous schooling. Wealthy families whose children have always attended private school would be eligible to collect ESA money. That means that public schools would lose funding without a corresponding reduction in operating costs; those schools would need to either cut programming or raise taxes.
What can the voucher money be spent on?
The four bills are in agreement here, using the same list found in most ESA bills, including tuition, materials, therapies, tutoring, summer school, transportation, fees for nationally standardized achievement tests (e.g. SAT), computer hardware and software, and school uniforms. All end their list with the catch-all “other education-related goods or services.”
Is there oversight of how families spend these taxpayer dollars?
After Arizona launched its ESA program, auditors discovered that over $700,000 in taxpayer money had been improperly spent on items such as non-educational music albums, cosmetics, and blu-rays. The audit found that some parents had purchases denied and continued anyway, while other misspending was not identified for months. State schools Superintendent Diane Douglas said her department was not given the resources to properly administer the program.
Keeping tabs on how hundreds of families spend taxpayer money one small expense at a time is a large task. None of the Virginia bills address it.
HB 1508 places the responsibility for the program with the Department of the Treasury; their job is to come up with an application, inform parents of their responsibilities, and publicize the program.
The Treasury is to hire a program administrator to “establish and manage the day-to-day financial administration” of the program. Those duties include “eliminate opportunities for parents to make nonqualified expenses,” which seems more like a magic trick than program administration. The Treasury is directed that they should boot parents out of the program “upon finding that a parent made a knowing misrepresentation,” but it’s not clear how they would ever discover such a thing.
The other bills place responsibility for the program with the Department of Education. HB 1371 and HB 1396 call for annual random audits and establish a Parent Review Commission of seven ESA parents to vote “questionable” expenses up or down (it’s unclear who would raise the question in the first place). Only SB 823 clearly calls for audits; it also allows school districts to report evidence of “fraudulent use of moneys.”
All the bills call for the hiring of a program administrator to do most of the heavy lifting, arguably subcontracting out a function of the state government. Oklahoma has seen problems with this approach. Officials there tried to use a voucher-like program to distribute relief funds. they hired ClassWallet, a company that specializes in running voucher style programs. When it was discovered that the money had been spent on gaming consoles, Christmas trees, and outdoor grills, ClassWallet said that they had neither “responsibility for, nor authority to exercise” program policy nor to police grant compliance.
Is there any accountability for the vendors who will be collecting taxpayer dollars?
The short answer is “not really.”
HB 1508 calls on the hired program administrators to come up with a procedure for “creating, preapproving, approving, maintaining, amending, and updating” a list of education service providers, but it says nothing about any qualifications the law would require (meaning that, once again, a hired program management company would be setting education policy for the commonwealth).
HB 1371 and HB 1396 list requirements for education service providers which are 1) inform the department it wants to be on the list and 2) promise not to give parents kickbacks of ESA money. That’s it.
These three bills also call for an Amazon-style system of “reviews” of vendors to be created; presumably proponents believe that this sort of message board provides accountability.
SB 823 says nothing about education service providers at all. Under this bill, parents are apparently just supposed to find places to spend the voucher money on their own.
No accountability for service providers means little protection for families and students. If they fall victim to fraud, are abandoned mid-year by a failed edu-business, or simply run out of voucher money, families have no real recourse.
Are there protections for education service providers?
You bet. In what has become standard boilerplate for these bills, all four bills explicitly state that the taxpayer money must come with no strings attached. The money does not make them “an agent of the state or federal government.” They will be given “maximum freedom.” And a provider shall not be required “to alter its creed, practices, admissions policy, or curriculum.”
So even though they are accepting taxpayer dollars, they may still discriminate as they wish, reject certain students as they wish, and teach whatever they wish.
Bad news all around
This is not even close to the first time that lawmakers in Virginia have tried to sell vouchers. Virginians should hope that this attempt will also fail.
Vouchers, particular vouchers that are extended to students who have never set foot in a public school, are expensive. When a similar program was pitched in New Hampshire, supporters predicted it would cost about $130,000. They were off by about 11,000%—the program has hoovered up $14.7 million in taxpayer education funding.
That is bad news for the public school system, which sees its funding cut. It’s also bad news for taxpayers, who must accept either public schools that do less or an increase in taxes (or both). Meanwhile, public tax dollars disappear into a parallel school system that is free to discriminate and has little or no accountability to the public.
