Nevada’s Opportunity Scholarships: A win for students and taxpayers alike

Daniel Honchariw

By Daniel Honchariw

This article originally appeared in the Reno Gazette-Journal.

The debate over how best to improve educational outcomes for Nevada students currently stands at a de facto impasse.

On one side, the education establishment argues increased per-pupil funding is necessary to cure what ails the state’s struggling K-12 system. Yet on the other side, taxpayers, already feeling tapped-out by a slew of recent record-breaking tax hikes, are reluctant to give away more of their hard-earned wealth to a system that has consistently underperformed.

But what if there were a proposal that could appeal to the priorities of all interested parties? In other words, what if Nevada could increase the state’s per-pupil investment in public education without increasing the taxpayer burden?

Fortunately, such a proposal exists — educational choice.

Indeed, educational choice programs actually increase per-pupil spending levels without the need for imposing additional layers of taxation.

A just-published NPRI study details the precise fiscal benefits derived from choice programs, focusing specifically on the state’s Opportunity Scholarships program. Its findings should catch the attention of even the most vocal advocates of traditional public schools, because it provides evidence that choice programs actually satisfy one of the education establishment’s key objectives: increased per-pupil funding for children that remain in traditional public schools.

According to the study, each time a student is awarded an Opportunity Scholarship financed by Modified Business Tax credits, the state realizes a net-savings in education spending. These savings accrue proportionately to student participation — as more students participate, the state realizes greater savings, leading to more available funds for the children that remain in public education.

The basis for these savings is straightforward. The average value of awarded scholarships is about $4500, less than half of what the state spends per-pupil on K-12 education. Thus, for every dollar awarded in MBT credits used to fund scholarships, the state enjoys a net-savings of up to $1.92.

Student participation of about 1,700 in the Opportunity Scholarships program has already resulted in minor per-pupil spending increases for Fiscal Year 2018, and the program is just getting started. If the annual cap on the program were lifted and the number of participating students increased to 25,000 — a number which represents about 5 percent of public school students statewide — per-pupil spending could rise by an additional $235.

Remarkably, a per-pupil spending increase of this magnitude mimics the effects of an additional $116 million in baseline education spending. That point bears repeating — granting Opportunity Scholarships to 25,000 deserving students could have the same effect on per-pupil spending as an extra $116 million in new revenue.

But before we can increase student participation to these levels, we must first expand the annual cap on tax credits which can be awarded for the purpose of financing scholarships. The current fiscal year is benefitting from a one-time $20 million boost to the Opportunity Scholarships program, but that will expire unless the legislature renews it — or expands it — in 2019.

Lawmakers should also prioritize the funding of Education Savings Accounts, the implementation of which would produce a similar net-savings.

Based entirely on district geography, thousands of Nevada’s students are currently trapped in educational environments that simply aren’t meeting their needs. As a result, there are countless ways to justify the expansion of new and existing choice programs for struggling students.

Now, we can add increasing per-pupil spending to that list of supporting arguments.

Increased educational choice satisfies the priorities of both sides of the debate, while giving students access to one of the most necessary components of a successful future: a quality education.

Who could possibly be opposed to that?

Daniel Honchariw is a policy analyst with the Nevada Policy Research Institute and author of the report, “Nevada’s Opportunity Scholarships: A Win for Students and Taxpayers

 

Daniel Honchariw

Daniel Honchariw

Senior Policy Analyst

Daniel Honchariw joined the Nevada Policy Research Institute in May 2016. He focuses mostly on fiscal and education (school choice) issues, and has also published extensively on the abuses of civil asset forfeiture. His work has been featured and/or cited by in-state and national publications including USA Today, The New Yorker, Reason, the Las Vegas Review-Journal, and the Reno Gazette-Journal.

Prior to joining, Daniel had been a lifelong California resident. His experience includes stints with the National Labor Relations Board, multiple financial services firms, and a Tahoe-based ski resort. He is a sports fanatic, political junkie, and chess enthusiast.

Daniel holds a B.S. in Industrial and Labor Relations from Cornell University (’09) and an M.P.A. in Public Management from California State University, Dominguez Hills (’14).