Friday Interview: The Prospects for Education Savings Accounts | Eastern North Carolina Now

    Publisher's note: The author of this post is the CJ Staff, who is a contributor to the Carolina Journal, John Hood Publisher.

Arizona governor signs law Thursday expanding first-of-its-kind program

    RALEIGH     North Carolina lawmakers have devoted much of their time in recent years to expanding parental choice in education. One option they might want to pursue in the future is the education savings account. Arizona Gov. Jan Brewer signed into law Thursday a bill expanding that state's ESA program to cover children entering kindergarten. Before the change, state law required students to spend a year in traditional public schools before families could apply for accounts.

    Jonathan Butcher, education director at the Goldwater Institute in Arizona, discussed ESAs earlier this year with Mitch Kokai for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)

    Kokai: First of all, education savings accounts -- when we're talking about these ESAs, what are we talking about?

    Butcher: That's a great question because they are a brand new idea. And what you need to think of is a health savings account. Many people are familiar with these, where you will have a check card and even a bank account, and you can use that card for a variety of health expenses. You can pay for co-pays, or you can pay for a doctor visit. Well, take that concept and put it in the world of education. And what happens in Arizona is that a student's per-pupil funding, from the funding formula, is put in a private account operated by the parents. And they can use that account for a variety of things. Think of all the different things that come with a child's experience -- tutoring services, certainly private school tuition, but textbooks, college savings accounts. Really, there are a variety of options.

    Kokai: Would it work like an HSA in that you have that bank card that you would use for these expenses?

    Butcher: Precisely. In fact, parents can use, if they need to, an online service such as PayPal alongside the card. But typically, yes, parents will use the card, and they can buy, even at online retailers such as Amazon -- they can purchase curricular materials -- large retailers like Wal-Mart. And so, most importantly, what education savings accounts have done is they've changed the conversation now. We're talking about a child's entire experience with education -- their whole K through 16 experience.

    So it's no longer about what is the best school anymore. Because as many people know, today we have online classes, we have online tutors, we have tutoring services at Sylvan Learning Center, and there are a variety of ways that you can experience education and different places that you can learn. And so ESAs make it possible now to have a tailored educational experience for every child.

    Kokai: Let's get into some of the details of how this works. People here in North Carolina would be familiar, at least generally, with the idea [that when] you pay taxes, a certain amount of your tax money goes to the public school system or, in the case of the charter schools, to the charter school. In Arizona, with the ESAs in place, how are things different from that standard model?

    Butcher: Well, in a similar way to the way we've always funded kids in classrooms, instead of the money going straight to a child's school, the parents will sign a contract with the State Department of Education, and the parents will become, in essence, a vendor of the state. And they agree in that contract to take care of their child's education. And so the child will leave the public school system. The money will follow them and go with them into their savings account, and then the parents will have the variety of options that we were talking about a moment ago.

    And so we have a new way to deliver educational services to children. I think it's not something that in any way subtracts from the public school services that are still provided, right? We still have a million children in Arizona's public schools, but now we have a new way for children to experience something unique and to get something that is specific to what they need. So, for example, the first group of children using the savings accounts in Arizona are students with special needs. Now, next year students from failing schools, and a variety of other children, will be eligible as well. But if you can think about a child with special needs, they would be able to buy educational therapy services, certainly a specialized school for, say, a student with autism. So you have a really unique way to deliver a set of services that before only came from one place.

    Kokai: If something like this were proposed in North Carolina, I can just hear critics saying, "Well, wait a minute, this would ruin the public schools. This would decimate the public school system." Have you seen in Arizona that there have been any negative impacts like that? Or have the schools opened just as they normally do for the traditional calendar, and this is an option that's being used for people who see the need for something other than the traditional system?

    Butcher: Absolutely. And I think the story is that when you have a menu of options for parents to choose from -- whether it's charter schools, whether it's a tax credit scholarship program, certainly education savings accounts, or some sort of open enrollment program where parents can pick from public schools across the state or across districts -- this is the type of educational landscape that we need in the United States today.

    You know, everyone talks a lot about the crisis in public education. That's really something that's been around for well over, going on three decades if not more, perhaps even half a century now. And we've tried all these different ways, right, to resolve this question. We've created magnet schools. We've funded the system more. We've consolidated districts. But now we need to talk about how do we get kids in the best programs available? And how do we get kids out of the ones that are failing and put the resources and all of the attention to the programs that are working? And the savings accounts do just that.

    Kokai: One of the things that school choice advocates often talk about is the way in which all of these other options help improve the traditional system as well, by making it have to compete for students. Is there a sense that education savings accounts would also contribute to that, that if there's no monopoly that forces the kids into the traditional schools, they are going to have to compete and do better to keep students?

    Butcher: Just as I was saying that we need a number of different options for parents across the educational landscape today, I would say that high-quality public schools are a part of that landscape. And, of course, there are good public schools that are out there. Now, the problem is, they're not all good. And so for those kids that are assigned to a school that's not serving them well, that's why we need all these different options.

    In Arizona, the savings account program actually allows for parents to purchase a public school class individually, a la carte, if they wanted to. And so that's a visionary approach to what I think education is going to look like in the next hundred years. You're going to purchase a class here, a class there, take some classes online, perhaps use a tutor at home, and so you will have a school day that doesn't look like rows of desks in front of a chalkboard. It looks like a real experience.

    Kokai: Now, one of the things that some of our listeners may be saying to themselves is, "Wow, this sounds like a really neat idea. It also sounds like it would be very hard, very complicated to put in place." Is this something that North Carolina could do? And if so, how?

    Butcher: Well, sure. I think that if similar programs exist, similar in design, like health savings accounts like we were talking [about] before, or even, in a similar way, the food stamp program where people get cards and they can go and make different purchases, the model has been tested, right? We have a proof of concept at least in the delivery mechanism.

    I think what we are breaking new ground on -- and I think doing well, so far, with some room for improvement -- is a system of accountability that the state needs to put in place so that they can watch how parents are spending their money, making sure it's being spent on educational purposes. And there are a variety of ways to do that through outsourcing and through fraud and abuse protection mechanisms that are already in place in the other systems, like food stamps and Medicaid and things like that. So we can learn from those systems and put them -- the good parts -- in place with the education savings accounts.