School Choice

Colorado Supreme Court will hear Dougco voucher case

Update: This article has been updated with comments from Dougco school board member Craig Richardson and from ACLU-Colorado legal director Mark Silverstein. 

Colorado’s highest court has agreed to hear arguments on the constitutionality of the Dougco Public Schools voucher program.

Among the points of the case the state Supreme Court will consider is whether plaintiffs, led by an organization called Taxpayers for Public Education, have have the legal right to challenge the program, which never went into effect because of litigation, and whether the program violates the Public Schools Finance Act.

A Denver judge, siding with a group of parents and civil-liberties organizations, put the program on hold in 2011. Last year, a three-member appellate court panel reversed the decision.

Dougco board member Craig Richardson said the district is confident in its case.

“The District welcomes the opportunity for the state’s highest court to review a case that presents such important issues for our state and our country,” Richardson said in a media release. “DCSD is committed to expanding choice for parents and one of the ways is our innovative Choice Scholarship Program. We believe the Court of Appeals will be affirmed and that the parents and children of our District will, someday soon, be afforded more educational choice.”

The Colorado branch of the American Civil Liberties Union was equally optimistic.

“The ACLU of Colorado is encouraged by the Colorado Supreme Court’s decision to hear the Douglas County school voucher case, and we look forward to arguing before the court that it must strike down the school district’s misguided funding scheme, which compels taxpayers to subsidize religious education in clear violation of the state constitution,” said Legal Director Mark Silverstein in a media release. “We are hopeful that the Supreme Court will end this misguided and unconstitutional diversion of taxpayer dollars before it is adopted by other districts around the state.”

The voucher program, which was unanimously passed by the Dougco school board in 2011, would have allowed up to 500 Douglas County students to use 75 percent of the district’s per-pupil funding – or $4,575 at the time – to attend a participating private school approved by the district.

Students would have been able to use those funds to attend private religious schools.

Schools that were interested in participating in the program had to have met certain criteria.

Thirty-four private schools applied to participate in the voucher program, known as the Choice Scholarship Program. Dougco had approved 23 of those schools.

Of the 23 schools, 14 were located outside Douglas County, and 16 teach religious doctrine.

The voucher program was modeled after other programs across the nation that have prevailed in court. It gave students the right to “receive a waiver from any required religious services at the [participating private school],” according to court documents.

choice history

The rise of tax credits: How Arizona created an alternative to school vouchers — and why they’re spreading

PHOTO: U.S. Department of Education

With its recent adoption of a tax credit scholarship program, Illinois became the 18th state to adopt an innocuously named — but highly controversial — policy that critics have described as a “backdoor voucher.”

In some sense, the description is apt. But by injecting a middle layer into the government’s support of private school tuition, tax credits help avoid some of the legal and political obstacles that have dogged efforts by advocates, like Education Secretary Betsy DeVos, to promote school choice through vouchers.

Perhaps as a result, more students now use tax incentive programs than vouchers to attend private schools in the U.S. A federal tax credit is also seen as the Trump administration’s favored approach for promoting school choice at the federal level, though its immediate progress looks increasingly unlikely.

The 20-year history of this approach offers insights into why it has taken hold: resistance to legal challenge; limited government oversight, appealing to among free-market advocates of school choice; and a more politically palatable branding than vouchers.

This is far better than vouchers — it is easier to pass and easier to uphold,” Trent Franks, a conservative activist and now a U.S. congressman, said in 1999 after Arizona’s state supreme court upheld its tuition tax credit program. “I think this is the direction the country will go in.”

He proved largely right.

The number of students participating in private school choice programs over time, including tax credits (green) and vouchers (orange). (EdChoice)

Arizona’s pioneering approach

The first tax credit program was passed in Arizona in 1997. Arizona’s constitution, like most other states’, bars public dollars from going to religiously affiliated schools. Proponents knew any plan to promote private school choice would likely end up in court.

So they landed upon an ingenious approach that would make the initiative more likely to survive legal challenge. Instead of issuing vouchers for private school tuition — like Milwaukee had done since 1990 — the state would outsource that role to nonprofits. Those groups would get their money from donations, encouraged by generous tax credits.

It worked like this: An individual could donate up to $500 to a nonprofit, then get a tax cut for the exact amount they donated. The nonprofit would take the donated money and use it to offer tuition stipends — essentially vouchers — to families who met certain conditions. That system allows the state to promote the tuition subsidy, losing $500 in revenue for each maxed out donation, without paying for it directly.

Arizona’s program has since grown, and the state has created a number of other tax credit programs. (This approach is distinct from programs that give individual families tax breaks for educational spending on their own children; Illinois has had such an initiative since 2000, while Minnesota has had one since 1955.)

Arizona’s and of Milwaukee’s policies look similar. In both places, students can receive a subsidy to attend a private school, and it comes at the expense of state revenue. But crucially, in Arizona, the government never had the money to begin with.

“The point was in part to ensure that these were not government-run programs,” Lisa Graham Keegan, who was Arizona’s school superintendent when the tax credit program passed, told Chalkbeat. “Those scholarships are completely separate, both for legal reasons and for philosophical reasons.”

Tax credits: the legal survivors

Private school choice across the country have been inundated with legal challenges, but tax credits have proven remarkably resilient.

Although voucher programs have continued to grow and were upheld by the U.S. Supreme Court in 2002, they have also faced legal challenges in state courts. Colorado’s top court, for example, struck down a voucher program in 2015. (The case is currently being reconsidered in light of a recent Supreme Court decision.)

But tax credits have never ultimately lost in state or federal court, prevailing in Arizona, Alabama, Florida, Georgia, New Hampshire, and the U.S. Supreme Court.

Tax credits “grew up as a result of saying we need a different vehicle than vouchers in states that have legal issues,” said Robert Enlow, the president of EdChoice, an Indianapolis-based group that backs both vouchers and tax credits. (EdChoice is a funder of Chalkbeat.)

Often, cases have been thrown out before substantive arguments can be made, amounting to a win for the programs: Some courts have ruled that private organizations or individuals do not have legal standing to challenge tax credits, since they aren’t government expenditures.

That was the decision in the 2010 Supreme Court case Arizona Christian School Tuition Organization v. Winn, in which the majority said equating government spending and tax credits was “incorrect.”

“When Arizona taxpayers choose to contribute to [scholarship organizations], they spend their own money, not money the State has collected,” Justice Anthony Kennedy wrote.

Light regulatory touch proves a blessing and a downside

To Arizona conservatives skeptical of both regulation and the education establishment, the system had an additional benefit.

“The point was in part to ensure that these were not government-run programs,” said Graham Keegan, and additionally that “these don’t become government dollars.”

Nationwide, tax credit scholarship programs appear less regulated than voucher programs, some of which require private school students to take state tests or for schools to undergo financial audits.

Free-market oriented supporters “see ‘neovouchers’ as much less likely to be regulated and have restrictions — the government strings attached — than a traditional voucher law,” said Kevin Welner, a University of Colorado professor who wrote a book on the rise of tax credit programs and is generally critical of them.

A 1998 essay published by the Mackinac Institute, a conservative Michigan think tank, made this case explicitly: “Tuition tax credits also create very different effects than vouchers. … Vouchers are more likely to be viewed as a rationale for regulating the entity that receives the subsidy.”

This has played out in practice. One analysis compared several voucher programs to a number of tax credit programs and found that, in almost all cases, vouchers were more regulated. Most tax credit systems had few, if any, financial reporting or disclosure requirements. (Notably, Florida’s program, the largest in the country, was the most regulated tax credit initiative.)

Many tax credit programs do not require participating students to take state exams, and if they do, the tests are rarely comparable to the assessments taken in public school. This means that while voucher programs have been widely studied, there is little research on the effect of receiving a tax credit scholarship.

Supporters of this approach argue that such requirements discourage private schools from participating.

Limited oversight, however, has proven something of a political liability, insofar as it has allowed for financial malfeasance. National media have drawn attention to how one prominent politician and advocate for Arizona’s program was also able to profit personally from it, for example.

“I think [limited regulation] is a feature that has some bugs,” said Enlow of EdChoice. “We need to have transparency. The programs, like Florida, which are very transparent and very open to data collection, I think are very important.” He declined to name any tax credit programs that, in his view, lacked sufficient transparency.

The use of the tax code has also raised another concern: Under some tax credit systems, “donors” can actually earn a profit by taking advantage of both state and federal tax breaks.

Selling tax credits

How exactly to brand tax credit programs has been the subject of fierce debates. Opponents have called them “neovouchers” and “voucher schemes,” while supporters sometimes portray them as entirely distinct from vouchers.

Tax credits tend to poll better than vouchers, and Welner thinks that may be because it’s less clear to most people what they are.

“People’s eyes get bleary and they tune out when people start talking about tax credits,” he said. “That helps to avoid a situation where they respond to it the same way they respond to a voucher proposal.”

Tax credits are essentially a tax cut, which can be a selling point for some, especially conservatives. Advocates sometimes also downplay the costs of tax credits to the government.

“Is it foregone revenue? Sure, but it doesn’t mean it’s the state’s revenue,” said Enlow.

The distinctions between vouchers and tax credits, though, may ultimately matter less to lawmakers in states where they are being debated. In Illinois, critics connected tax credits to vouchers, and Democrats were largely opposed to the tax credit initiative that ultimately passed.

“In my experience the arguments have been the same whether it’s a tax credit bill or a voucher bill when you’re talking with legislators,” Enlow said. “There’s some nuances, but it’s still the same.”

space wars

Success Academy ratchets up pressure on city to give it space

PHOTO: Monica Disare
Students in a Success Academy class.

In a rally outside City Hall and in a private email to reporters, Success Academy’s CEO Eva Moskowitz is ramping up pressure on Mayor Bill de Blasio’s administration to provide space for several new middle schools she plans to open next year.

The city missed a September deadline set by the charter-school network to approve a request for shared space inside public-school buildings for up to seven new middle schools. Now, the earliest the city can approve those requests is at a public meeting in November, according to Moskowitz, who spoke at last week’s rally.

In the meantime, families of more than 730 children preparing to start middle school next fall are stuck in limbo without assurance that they will have school buildings or the opportunity to attend open houses and tour the schools in advance, Success Academy officials argue.

“Because the city delays in providing space, families don’t know what their options are, whether their middle school will be down the block or across the borough,” Moskowitz said in an email to reporters Thursday morning. “While district parents across NYC are actively contemplating their school choice for next year, the mayor is keeping Success parents on hold.”

City officials said they are working to fulfill the requests, but suggested they are still gathering public input.

“Any time we are siting a school in a building, whether district or charter, we believe there must be a lot of public engagement,” said education department spokesman Michael Aciman. “We follow the State Law and work closely with charter organizations to address space requests in a timely manner.”

The bitter battle over public space for charter schools has been raging for years: The city argues that finding suitable shared space for charters is tricky, while Success Academy argues that plenty of space is available and the de Blasio administration is dragging its feet. Parents and educators in district schools often resist losing building space to charter schools.

This latest fight comes after Mayor Bill de Blasio agreed earlier this summer to make it easier for charter schools to receive public funding to pay for private space — part of a deal with state lawmakers in exchange for an extension of de Blasio’s control of the city’s schools. State law requires the city to help charter schools pay rent for private facilities if it doesn’t given them room inside public buildings.

After the deal in June, charter-school advocates called on the mayor to fulfill charters’ space requests by September. Now that the deadline has passed, Success and charter advocates appear to be resuming their campaign to wrestle public space from the city.

Success Academy and the de Blasio administration might be headed for a more dramatic clash if the city misses the October 13 deadline to put the building requests on the agenda for the November meeting of the Panel for Educational Policy, which must approve them.