October 22, 2020

Considerations For Private Schools and Their Allies Amid Budget Cuts

By Bellwether

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This is our latest post in “The Looming Financial Crisis?” series. Read the rest here.
In August, I wrote for Education Next about how the pandemic was affecting private schools — especially those dedicated to serving high-need students — and the factors that can influence whether a school is able to pivot during uncertain and disruptive times. 
But as state budgets tighten, private schools that rely on vouchers or tax-credit scholarship programs to serve high-need students are not wholly in control of their own destiny. Rather, just as school responses have varied widely, policymaker responses will vary as well. 
After the 2008 recession, for instance, state school choice policies sometimes lost — and sometimes gained — significant funding. For example, funding for Pennsylvania’s Educational Improvement Tax Credit Program dropped 20% after 2008 before rebounding a couple of years later. Meanwhile, funding for Wisconsin’s Milwaukee Parental Choice Program increased by 12%, and policymakers in the Sunshine State increased the ceiling on the Florida Tax Credit Scholarship Program nearly 50%. 
There are limitations on what school choice proponents can predict in uncertain times. Here are three questions they should continue to revisit as the pandemic evolves this fall and new state legislatures prepare to convene in January:

What are the projections for your state’s economy?

The more constrained the resources, the harder it will be for policymakers to preserve and expand private school choice programs. First, it will be important to understand the state tax revenues that fund state voucher programs. State revenues often come from a combination of income and sales taxes, and, as Jennifer Schiess explained, these can be hard to predict. They could be less vulnerable to downturns, since the pandemic hit low-wage workers hardest and low-wage workers make up a smaller share of income tax revenue. Internet shopping could also offset declines in sales tax revenue from brick-and-mortar retail. 
However, if and when state tax revenues do decline, private school choice programs are more vulnerable. Often funded as line-items in state budgets, their appropriations can be cut much more easily than the funding formulas for public schools, which are typically embedded in complex statutes. 
Second, and especially for states with tax-credit scholarship programs, it will be essential to understand how the pandemic has affected a state’s major industries. For example, Oklahoma’s economy depends on oil prices, and Florida’s depends on tourism. Both have taken big hits during the pandemic. These industries are not only important contributors to state economies but may also participate in the school choice program by making donations to scholarship organizations and receiving a tax credit in return. As a result, tax-credit scholarship programs may feel a pinch on both sides: from policymakers lowering the ceiling for tax-credits as from a decline in donations to the program. 

How will your state’s policymakers prioritize (or deprioritize) school choice?

To forecast the implications of an economic downturn on private schools serving high-need students, private schools and their allies will also need to understand the strength of their political coalition — and how that coalition may change between November 3 and when new state legislatures convene in January.  
To better read the tea leaves on how state policymakers may (or may not) preserve and expand private school choice programs, private schools and their allies should assess their state political coalitions: 

  • Does/will private school choice have support in state legislatures? It is important to understand the balance of proponents/opponents of private school choice over the last two years, whether vulnerable seats are likely to tip the balance, and whether there are champions of private school choice in positions of power (i.e., on education or appropriations committees). For instance, some predict that Democrats could take the House and/or Senate in Arizona. Here, a decline in state revenue could pit school choice programs against other priorities, such as the teacher pay increases promised by Governor Ducey after the 2018 Red for Ed campaign. 
  • Does/will private school choice have support from governors? Governors can not only veto state policies or line items in state budgets, in 2020 they are also vested with authority over some federal relief dollars: The Governors’ Emergency Education Relief fund. Some governors — including those in Florida, New Hampshire, South Carolina, and Oklahoma — have directed some of their GEER funding to support private school choice. Other governor’s have done the opposite and mounted legal challenges against the U.S. Department of Education’s rule on distributing COVID relief dollars to private schools. 

Which population of students participate in school choice programs, and do those populations have influence with policymakers?

Assuming a scramble for scarce resources is in the offing, school choice proponents must assess and mobilize their constituency. How many students participate in school choice programs in your state? Has this group mobilized as a political constituency?
For some programs, a solidly middle-class student may be eligible. Others are targeted to low-income students exclusively. Who participates, and where, determines the outlines of the constituency that is positioned to win or lose in a political fight over private school choice. In Florida, for instance, more than 100,000 students participate in the program, a considerable constituency. Organizations like Step up for Students have strong track records of engaging them in effective advocacy. For programs that serve the most disadvantaged and disempowered populations, however, school choice proponents will need to work extra hard to make sure their voices are heard. This is likely the case in Maryland, where participation in the Broadening Options and Opportunities for Students Today (BOOST) Program is limited to only 3,000 low-income students. Elevating the perspectives and experiences of program participants, paired with authentic grassroots mobilization, will matter considerably. 
Stay tuned for future work on these issues — and tips on what to do once your school or network has understood the landscape in which you’re operating.
This is our latest post in “The Looming Financial Crisis?” series. Read the rest here.
*Indira Dammu contributed research support for this post.

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