Parental Choice in Education bill in New York

New York Governor Coumo is proposing a new bill for parental choice in education. The highlights of this bill include
  1. Up to $500 in tax credits for low-income families who send their children to nonpublic and out-of-district schools
  2. $50 million in tax credits to individuals and businesses that donate funds to nonprofits offering scholarships to low-income students attending nonpublic schools.
  3. $20 million in incentives to public schools offering enhanced educational programming, such as after-school programs.
  4. Tax credits of up to $200 for public school teachers who purchase classroom supplies.
Couple of observations on this.
  1. It is interesting to note that, a school student is also part of the campaign team. An 8th grader gives an emotional speech in this video, explaining as to why this provision would be important to him and his family.

  2. The Governor makes two important points in his speech - i) Parents have different expectations from education, and hence have different choice of schools. That must be respected. ii) Many good schools (parochial schools in their case) are closing down because of lack of money. It is our duty to keep these schools alive and to give the freedom of choice to parents.

    The second point should be equally emphasized. Recently, Digantar School, Jaipur stopped its classes in high school for lack of finances. This school, run by a not for profit organization is famous for its innovative pedagogy, and was providing education to many children of low income communities for free. Vouchers/tax credits could have kept such schools alive.

  3. Vouchers vs Tax credits: There is a difference between payment on delivery and getting benefits in terms of tax credits. Prof Sendhil Mullainadhan did an interesting experiment where tax exemptions were given as discount on cars at the time of purchase vs credit in taxes. The former increased sales than the latter. Not same context but some lessons from this.

    The cash flows aren't smooth for low income communities. They wouldn't have money to pay at the beginning of the year and claim later. Plus, the tax systems aren't great in India.. I would prefer  vouchers vs tax credits. But ya, agree on the broad point of both approaches - choice to parents.

  4. School choice and making education for profitable should go together. The voucher system wouldn't realize its full potential with constraints in supply.

  5. Is vouchers an additional expenditure to the government? If public schools are run as they are now, and again vouchers are given. Isn't vouchers an additional expenditure! I couldn't find an answer to this till now!

  6. Experience in Peru: Peru is a natural experiment for people interested in studying the effects of making schools for profit. Peru made its education for profit in 1998 and also introduced a sort of voucher system.

    There are now complaints of information asymmetry and social stratification in schools of Peru. These of course can be problems, but shouldn't be the reasons for stopping this reform. We should acknowledge this and try to address this.

  7. Will funding schools, similar to tax credits for people funding schools help?: The recent Jishnu Das's paper on pragmatic approach towards education reform, has interesting observations on this.

    "More perniciously, there is a pervasive danger that once public subsidies are brought into the purely private system, the political economy of countries with poor schooling capacity will generate worse outcomes. In India for instance, there is a long-standing tradition of “grant-in-aid” schools that function with public subsidies, usually on land leases. Performance data tend to show little difference between the functioning of these schools and pure public schools; it’s the private sector that receives zero public subsidies where performance is higher on tested subjects".

    These are definitely the concerns, but these shouldn't be made the reasons for blocking this reform. Analyzing the imperfections of market, without even having it in first place is a futile exercise.

    I blogged earlier that one of the key take aways from this paper is that, as the private sector gains prominence in the school education, regulation becomes an important aspect.

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