Study: Charter schools improve teacher quality at traditional public schools

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Charter schools increase the average quality of traditional public school teachers by providing high-quality, unlicensed teachers an easier pathway into the field, a new paper published by the National Bureau of Economic Research concludes. 

“Because the fixed costs to participating in the charter sector are low, teachers are able to explore their taste for teaching before committing to fixed costs (licenses). This in turn generates positive selection on the quality of teachers entering public school careers,” conclude economists Jesse Bruhn of Brown University, Marcus Winters of Boston University and Scott A. Imberman of Michigan State University. 

Looking at Massachusetts public charter schools, the economists discovered that charter schools exhibited a U-shaped teacher attrition pattern, with high-performing teachers and low-performing teachers both tending to leave at high rates. But the destinations of the high-quality and low-quality teachers were polar opposites. 

Unlike in traditional public schools, low-performing charter school teachers tended to leave teaching for other fields. By contrast, high-performing charter school teachers tended to pursue licensure and transfer to a traditional public school. 

The authors conclude that the low barrier to entry for becoming a charter school teacher attracts people who are interested in teaching but who are not ready to commit to getting a four-year teaching degree and a state license. 

By offering a quick on-ramp into the teaching profession, instead of a wall that takes years to climb over, charter schools are able to attract talented teachers who otherwise would never enter the field. Once they decide to stick with teaching, they then pursue licensure and move to traditional public schools, which typically offer higher pay and more generous benefits. 

In short, charter schools perform a valuable public education service by weeding out poor-performing teachers and channeling high-performing ones into traditional public schools. 

Bruhn, Winters and Imberman write that “charter schools tend to hire unlicensed teachers who are ineligible to teach in the public sector and then there emerges a mobility pattern such that the least effective charter school teachers are more likely to exit teaching while effective teachers are more likely to obtain a license and move into the traditional public school sector. This pattern of results suggests that charter schools create a positive externality for local public schools by increasing the average quality of the labor available to them.”

Charter schools are public schools that are operated under a contract, or “charter,” with the state or a local school district. They are not subject to district-negotiated teacher union contracts or many state regulations that dictate how public schools are to operate. That gives them the flexibility to pursue alternative management practices. 

The authors note that rigid employment restrictions at traditional public schools likely make traditional public schools less, not more, effective.

“Employment restrictions embedded in collective bargaining agreements, administrative policies, and legislation may inhibit public school effectiveness by limiting their ability to retain effective teachers and remove ineffective teachers (Goldhaber & Hansen, 2010; Staiger & Rockoff, 2010; Cowen & Winters, 2013),” they write.

By contrast, charter schools that aren’t subject to rigid employment restrictions have found ways to recruit very high-performing teachers into the profession while pushing low-performing teachers out. 

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The amazing bargain of the governor’s $1.5 million in aid to lower-income students

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To help lower-income students at risk of falling further behind in the 2020-21 school year, Gov. Chris Sununu allocated $1.5 million out of $1.25 billion in federal coronavirus relief aid to scholarships students whose families earn no more than 300% of the federal poverty level. Much of the coverage and commentary about this modest effort to help these students has been inaccurate or misleading.

This is hardly surprising, as attacks on these scholarship programs have always consisted largely of misinformation. Here we explain some of the misleading claims being made in attacks on the governor for offering aid to lower-income students.

 

Claim: This is a taxpayer giveaway to private schools.

Fact: This aid goes to low-income families via two non-profit scholarship organizations that administer New Hampshire’s tax credit scholarships. Those organizations give scholarships directly to families, not to private schools. By law, families may use these scholarships at any private or parochial school, at any public school outside their home district, or to home school their children. The money is not direct aid to private schools. It is aid to families, who are free to choose public schools if they wish. They tend not to choose public schools, which are more expensive than most of the private or home-schooling options.

 

Claim: The scholarship organizations are sitting on $1.7 million in unspent funds from the last school year.

Fact: The $1.7 million listed as unspent in the scholarship organizations’ 2018-19 annual reports was used for scholarships awarded in 2019-20. It is not cash sitting in reserve. The effort to paint these funds as cash-rich is deliberately misleading. (The way the groups collect and spend money has been explained to legislators and education activists repeatedly.) The scholarship organizations collect money in one academic year for distribution the following academic year.

 

Claim: Money slotted for the education of children must go to public schools only.

Fact: New Hampshire has never reserved education spending exclusively for public schools. In the 19th century, municipalities would sometimes pay private schools to educate students.  State law allows public education funds to pay for tuition at private schools in some circumstances. The goal of public education is to pay for students to become educated, not to fund one particular institution exclusively, particularly if that institution offers some students an inadequate education. On average, minority and lower-income students significantly underperform white and more affluent students in public schools. There is evidence that this gap has widened during the hastily improvised remote instruction period in 2020 (see here and here). The $1.5 million is not being set aside to fund private schools, but to shrink that achievement gap by giving lower-income families the ability to access an education that will work better for their children.

 

Claim: The scholarships will equal roughly $1,875 per pupil, much higher than the few hundred dollars per pupil that public schools are receiving.

Fact: Breaking down the coronavirus education aid this way creates the misleading impression that taxpayers are being cheated. The opposite is true; they are realizing an amazing bargain. New Hampshire public schools spend an average of $19,806 per pupil, including capital and transportation spending. Of that $19,806, more than $12,000 of local taxpayer money will remain in the local public school after a scholarship student leaves. On average, the state’s portion is more than $5,000 to educate each of these students (depending on how much additional state aid they get for special educational needs and socio-economic status). With these scholarships, the state would spend a paltry $1.5 million to educate approximately 800 students ($1,875 per student), instead of more than $4 million to educate them in a traditional public school.

Including all state, local and federal spending, the value is even more stunning. For a mere $1.5 million, the state is buying an education for 800 students that would cost more than ten times as much ($15.8 million) in a traditional public school.

Furthermore, if the $1.5 million in question were divided among all New Hampshire public school students, it would equal an additional $8.65 per student, producing no noticeable impact on student achievement. Using these funds to provide scholarships for students most at risk of falling behind would save taxpayers money while freeing up space in public school classrooms when space is at a premium.

 

Summary: This supposed controversy really isn’t about what’s best for the at-risk students who will be winning scholarships or about taxpayer value. It’s about whether families ought to be empowered to choose an alternative education. For some, anything that allows families to choose an alternative to their assigned public school — even another public school in a different district — must be crushed. That’s the basis of the objection, which is really a shame.   

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A conversation about the Espinoza ruling with Tim Keller and Kate Baker

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On June 30, 2020, the U.S. Supreme Court ruled in Espinoza v. Montana Department of Revenue that states cannot exclude religious institutions from participating in school choice programs. New Hampshire has a similar scholarship program and a similar constitutional provision to the ones that were under discussion in the Espinoza case.

On July 8, the Josiah Bartlett Center for Public Policy presented an online discussion of the case and its impact on New Hampshire, featuring two experts on the question of religious liberty and alternative education.

Tim Keller, senior attorney for the Institute for Justice, was a co-counsel for the plaintiff in the case.

Kate Baker is executive director of the Children’s Scholarship Fund N.H., which administers a New Hampshire tax-credit scholarship program.

In a webinar for the Josiah Bartlett Center, they explained the Espinoza ruling and its effect on New Hampshire.

We posted the video of that discussion on our newly resurrected YouTube channel here.

 

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N.H.’s tax credit scholarships must include religious schools, U.S. Supreme Court confirms

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The June 30th U.S. Supreme Court ruling in Espinoza v. Montana Department of Revenue demolishes once and for all the false claim that New Hampshire’s Education Tax Credit Program violates the New Hampshire and U.S. Constitutions. 

Further, the ruling renders inoperative New Hampshire’s anti-Catholic Blaine amendment, added to the state constitution in 1877. 

“While the plain text and history of New Hampshire’s Blaine Amendment should not have been an impediment to enacting robust school choice programs prior to the Supreme Court’s ruling in Espinoza, there is now no question that legislators and policymakers in the Live Free or Die state are free to design and enact programs that will empower parents to choose the educational environment that will best serve their children’s learning needs,” Tim Keller, senior attorney at the Institute for Justice and co-counsel in the Espinoza case, told the Bartlett Center.

The Espinoza case overturned a Montana Supreme Court decision that had blocked that state’s tax-credit-funded educational scholarship program because it allowed parents to use the scholarships at religious schools. 

In 2013, New Hampshire political activist Bill Duncan sued to have New Hampshire’s similar program overturned for the same reason. The New Hampshire Supreme Court did not address the merits of the case, ruling in 2014 that Duncan did not have legal standing to sue.  

In the Espinoza case, the U.S. Supreme Court rejected the Duncan argument. The court ruled that if a state has a scholarship program, it may not discriminate based on religious status. Such discrimination violates the First Amendment’s guarantee that individuals have the right to the “free exercise” of religion.

At issue in the case was Montana’s “Blaine amendment,” an anti-Catholic amendment to the state constitution that prohibited state appropriations from going to “sectarian schools.”  

The New Hampshire Constitution has a similar amendment, added in 1877, which states that “no money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination.”

These amendments are often called “no-aid” provisions.

“Montana’s no-aid provision discriminates based on religious status,” the court held.

“Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools,” the court determined. “The provision also bars parents who wish to send their children to a religious school from those same benefits, again solely because of the religious character of the school.”

“To be eligible for government aid under the Montana Constitution, a school must divorce itself from any religious control or affiliation. Placing such a condition on benefits or privileges ‘inevitably deters or discourages the exercise of First Amendment rights,’” the court concluded.

In sum, education scholarship programs cannot discriminate against schools based on the religious status of those schools. New Hampshire’s Education Tax Credit Program does not bar funds from going to religious schools, so no change needs to be made. The Espinoza ruling clarifies that this practice is constitutional and that changing the program to exclude religious schools would be unconstitutional.

In 2017, the Josiah Bartlett Center for Public Policy and the Institute for Justice published a briefing paper arguing that New Hampshire’s tax credit scholarship program does not violate the state or U.S. constitutions, for reasons similar to those laid out in the Espinoza case. 

The co-authors of that report were Richard Komer and Tim Keller of the Institute for Justice. Komer argued the Espinoza case before the U.S. Supreme Court last year, and Keller was a co-counsel on the case. 

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Huge Florida study finds school choice improves performance of public school students

The expansion of Florida’s school choice scholarship program led to significant academic and behavioral improvements for students who remained in the state’s public schools, a new study shows. It is the latest of more than two dozen studies to show academic gains among public school students after the introduction of school choice programs.

The National Bureau of Economic Research paper, from professors at Northwestern University, Emory University and the UC-Davis School of Education, tracked 1.2 million Florida students over 15 years, making it an extremely large study of the effects of scaling up a school choice program.

The Florida Department of Education and Department of Health granted what the authors called “extraordinary” access to student data so they could match birth and family information to students’ educational data (with all identifying information removed).

The researchers were able to track public school students and those who received tax credit scholarships from birth, and track their educational progress in grades 3-8, where most state testing is done.  

Florida’s tax-credit scholarship program allows businesses to claim a tax credit for donations to scholarship programs that help families pay tuition costs at private schools. The program gradually expanded since its creation in 2001, and the authors studied how its growth affected students in public schools. 

“We find evidence that as public schools are more exposed to private school choice, their students experience increasing benefits as the program scales up,” the authors wrote. “In particular, higher levels of private school choice exposure are associated with lower rates of suspensions and absences, and with higher standardized test scores in reading and in math.”

The results showed that the benefits were more pronounced for public school students from lower-income families. 

“Lower socioeconomic status students– measured by free or reduced price lunch designation– see larger effects across all outcomes.”

Eligibility was raised from 185% of the federal poverty level to 260% in the 2016-17 school year. Even with higher-income families ineligible for scholarships, the study found that higher-income public school students also showed some improvements, suggesting that competitive pressures create benefits for all public school students, even those who can’t choose the competitor.

“We find consistent evidence that as the program grows in size, students in public schools that faced higher competitive pressure levels see greater gains from the program expansion than do those in locations with less competitive pressure. Importantly, we find that these positive externalities extend to behavioral outcomes— absenteeism and suspensions—that have not been well-explored in prior literature on school choice from either voucher or charter programs.”

The authors note in their conclusion that the results of their large-scale study are consistent with the findings of previous research on the effects of school choice programs. 

“Our results are also consistent with past work showing modest benefits to the initial introduction of voucher programs (e.g., Hoxby, 2003; Figlio & Hart, 2014; Egalite, 2016; Egalite & Wolf, 2016; Figlio & Karbownik, 2016), while extending upon these findings to show the persistence and growth of these positive effects as the program scaled up.”

Mike McShane, writing in Forbes, notes that this is the 27th paper to examine the competitive effects of school choice programs on public schools, with 25 of them having found benefits to the students who remain in public schools. 

In fact, the research shows a far stronger positive effect on the test scores of public school students than on the scores of students who leave,, McShane points out. 

Benefits for choice students do show up in the research. The Urban Institute found last year, for example, that Florida students who participate in the tax credit scholarship program were more likely to enroll in college and more likely to graduate than their peers who stayed in public schools. 

But the results are more mixed than they are for students in public schools, where dozens of studies have consistently shown significant positive effects from school choice programs.

The overwhelming nature of the evidence ought to buttress support for New Hampshire’s tax credit scholarship program, which is similar to the highly successful Florida program.

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Senate bill would redirect money for lower-income scholarship kids to higher-income college grads

A bill before the Senate Ways and Means Committee next Wednesday would cut education scholarships for lower-income children and redirect the money to higher-income college graduates.

The title of Senate Bill 663 offers no hint that it would make this switch. The bill would create a tax credit to fund the Graduate Retention Incentive Partnership (GRIP), established last year. But inserted into the middle is a provision to slash the Education Tax Credit by 60 percent.

SB 663 would fund the GRIP tax credit dollar-for-dollar with money taken from the Education Tax Credit, which finances scholarships for children whose families earn no more than 300 percent of the federal poverty level.

The bill would take $3 million from lower-income families and redistribute it to college graduates, many of whom would make more money than the families of the children who receive tax credit scholarships.

The GRIP tax credit would go directly to employers to cover 25 percent of a $1,000 annual payment employers could give to recent New Hampshire college graduates who work in-state for four years.

The state has placed no income cap on who can receive GRIP incentive payments. Nor are the payments limited to public university graduates. Dartmouth alumni are as eligible as graduates of Plymouth State University.

By contrast, tax filings show that more than 60 percent of students who receive scholarships through the Children’s Scholarship Fund, the larger of two organizations authorized to run the program, are eligible for free or-reduced-priced lunch.

Through the Education Tax Credit scholarship program, businesses and individuals take a credit on certain state taxes for donations made to one of two non-profit education scholarship programs for lower-income families.

Currently, 667 students have scholarships funded through the tax credit. The scholarships total about $1.4 million so far this year.

Existing law caps the total credits at $5.1 million annually. SB 663 would cut the cap to $2.1 million. Given the program’s rate of growth, the cap in SB 663 soon would be hit, wiping out scholarships for more than 1,000 lower-income students.

Kate Baker, executive director of the Children’s Scholarship Fund, said another 93 children have applied to CSF for a scholarship for next year, and the applications just opened on Jan. 1.

If SB 663 becomes law, it would halt the growth of these scholarships. A $3 million reduction in available funds would eliminate scholarship opportunities for about 1,500 students, Baker said.

The hearing for SB 663 is scheduled for 9:20 a.m. Wednesday, Jan. 29, in Room 100 of the State House — in the middle of School Choice Week.

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USNH schools rank high for free speech

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For the second year in a row, all undergraduate campuses of the University System of New Hampshire were nationally recognized for their commitment to freedom of speech.

In its just-released “Speech Codes 2020” report, the Foundation for Individual Rights in Education (FIRE) gave the University of New Hampshire, Plymouth State University and Keene state College “green light” ratings. A green light signifies “that the institution does not maintain any written policies that imperil free expression.”

By contrast, the state’s lone Ivy League institution, Dartmouth College, received a “red light” for having “at least one policy that both clearly and substantially restricts freedom of speech.”

Dartmouth received D grades on due process rights for students accused of misconduct, scoring in the mid-single digits on a 20-point scale.

Students at Dartmouth also are encouraged to report each other to the administration for “bias.” The college’s Office of Judicial Affairs tells students: “If you are the target of, witness to, or even simply hear about any form of bias happening to a Dartmouth student, you should submit a Bias Impact Report immediately.”

New Hampshire’s public colleges and universities have no similarly Orwellian instructions for students to act as secret speech police, nor do they have speech codes that violate students’ First Amendment rights.

As recently as 2017, Keene State College received a red light rating and the University of New Hampshire received yellow light from FIRE for having restrictive speech codes.

But in the spring of 2018, UNH revised all of its codes, and Keene State followed suit in the summer.

“Universities should be the first to embrace the free exchange of ideas and speech,” then-UNH President Mark Huddleston said. “The only UNH policy on speech is that it is free and unfettered on our campuses, and we’re pleased that FIRE has recognized our efforts.”

Upon his inauguration as UNH’s new president in 2018, Jim Dean also signaled his support for freedom of speech.

Granite Staters can be proud that their public university system has made its campuses into forums for the free exchange of ideas. And they can be thankful to FIRE for encouraging good behavior by monitoring campus speech policies and publishing these rankings.

(Note: FIRE’s reports do not include Granite State College, the University System of New Hampshire’s adult education college.)

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State education spending sees significant increase in compromise budget

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Through a combination of one-time expenditures and increases in baseline formulas, the new state budget produces significant increases in education funding over the next two years. It is no wonder that state officials hailed the compromise as a windfall for public schools.

The budget was built upon an education funding compromise that dramatically reduced the budget’s structural deficit by shifting more than $60 million in recurring education spending to one-time spending.

But the other part of that compromise built into the budget several increases in baseline education spending that will require additional revenues in the future.

As part of the deal, increases in fiscal capacity disparity aid and free-and-reduced-price meal aid expire at the end of the 2021 fiscal year rather than continue indefinitely. Those bumps in aid are financed with $62.5 million in one-time money from the state’s budget surplus.

But other education aid increases are built into the baseline budget.

The budget changes the formula for kindergarten aid to count all kindergarteners as full-day rather than half-day students. That change will cost about $9.5 million a year above what Keno revenues had previously covered, according to the Office of Legislative Budget Assistant.

The budget also eliminates the formula by which stabilization grants were being gradually reduced. Stabilization grants are supplemental funds school districts receive as compensation for student enrollment declines. That is, schools get state funds to “stabilize” their budgets as they lose students (and the state adequacy aid that comes with those students).

The stabilization grants had been scheduled to decline by four percent of the 2012 grant level each fiscal year. The compromise budget restores them to 100 percent, permanently.

That change in state law increases 2020-2021 education spending by $56 million and adds about $6.2 million a year to the state budget going forward, according to the Office of Legislative Budget Assistant.

Finally, the budget increases the base per-pupil adequacy grant from $3,363 to $3,708. This increase was already scheduled under previous law, so it is not a new change. But it does drive state education spending higher.

Figures from the Office of Legislative Budget Assistant show that, including one-time and recurring expenditures, the budget spends $196 million more on education from FY19 through FY21, a 19.9% increase in appropriations over the 2019 budget.

Of that, $41 million is added for FY 2019, and $155 million for fiscal years 2020-21.

The line-item increase in total budgeted state education spending from FY19 to FY21 weighs in at 9.6%.

Adequate education aid accounts for the largest portion of the added spending. It rises by $111.9 million over the FY 2019 numbers approved in the previous budget.

Those are substantial spending increases, celebrated by both the Republican governor and Democratic Legislature. Yet we can’t help but suspect that political attack ads next year will frame things somewhat differently.

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The Education Tax Credit Program: Fact vs. Fiction

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New Hampshire’s Education Tax Credit Program is under fire from legislators who want to kill the program or reduce its funding. Unfortunately, much of the rhetoric accompanying these attacks is factually incorrect. Inaccurate and misleading statements have been used in testimony at legislative hearings, in public debate, and on social media in an attempt to discredit the program. This briefing paper corrects many of those misstatements and explains what the program is, who is eligible, and what little financial impact it has. 

Read or download the full report (pdf) here: The Education Tax Credit Program: Fact vs. Fiction.

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The Education Tax Credit: How does it work?

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Serious misunderstandings about the state’s Education Tax Credit Program seem to be driving the effort to eliminate it. At least, they’re driving the narrative behind that effort. Misconceptions are so pervasive that legislators are repeating them in public statements.

Experienced drivers know that it’s dangerous if even a few people wind up going the wrong way. It’s worse if they persuade others to follow. There is too much misinformation circulating about the program to correct all of it here, but for the moment we can offer a quick summary of how it works and how much money is involved.

The Education Tax Credit Program, passed in 2012, allows businesses and individuals to claim a tax credit for donations made to qualifying scholarship organizations. Deductions may be claimed against the business enterprise and business profits taxes as well as the interest and dividends tax. Tax credits are equal to 85 percent of the donation. So a donation of $1,000 earns a tax credit of $850.

Some critics say this credit far exceeds standard practice. It doesn’t. Donors to the Community Development Finance Authority earn a tax credit equal to 75 percent of their donation.

Donations to this Education Tax Credit Program fund scholarships for low-income families to help cover the cost of education purchased outside of the traditional public school system.

In the current program year, donations to scholarship organizations are capped at $6 million, with a maximum available tax credit of $5.1 million. Some legislators, including the sponsor of HB 632, a bill to eliminate the program, have mistaken these legal maximums for an appropriation from the state budget.

“By reversing this unjust carveout, $6 million currently set aside for the education tax credit program would be appropriated fairly, taking into account all Granite Staters’ needs,” Rep. Joelle Martin, D-Milford, said in testimony before the House Ways and Means Committee in February.

Every part of that statement about the program is incorrect. There is no state money set-aside for the program. And the credits do not come close to totaling $6 million.

Here is how it actually works.

Individuals or businesses donate to the scholarship organization. The donors then give their donation receipts to the Department of Revenue Administration (DRA). The DRA then issues them a credit for 85 percent of the amount of the donation.

The credit is like a coupon. It can be redeemed when a donor files his or her taxes. But to claim it, the donor has to have a tax liability against which to apply the credit. Many donors never use the credit because their business or I&D tax liability is too low.

The Department of Revenue Administration’s Tax Expenditure and Potential Liability Report for fiscal year 2018 lists the total tax credits awarded under the Education Tax Credit Program since its start in 2013. The tax credits through FY 2018 have totaled $797,000.

(Note: The Department of Revenue Administration switched from calendar-year to fiscal-year reporting in 2014. It lists no Education Tax Credits claimed in its 2013 report, but notes that the 2014 figure includes the last six months of 2013.)

Education Scholarship Tax Credits Claimed

FY 2014: $20,000

FY 2015: $115,000

FY 2016: $93,000

FY 2017: $188,000

FY 2018: $381,000

The DRA’s latest report on the program shows that tax credits of $1,405,335 have been claimed through February 11 of this year.

So for the life of the program, only $2.2 million in credits has been claimed. That’s a little more than a third of the amount that the sponsor of HB 632 claimed the program cost annually.

There are many additional misperceptions that are coloring the debate about this program. We will address those in future posts. For now, we hope this clears up a few of the biggest misunderstandings.

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