RALEIGH — House Speaker Pro Tem Paul “Skip” Stam proposes to spend $90 million the next two years providing “equal opportunity scholarship grants” to low-income students for private education, an initiative he says will save the state money.
“The bill will be filed within a matter of days,” Stam, a Wake County Republican, said in an exclusive interview with Carolina Journal. The school choice measure provides for a maximum $4,200 scholarship per child. A scholarship cannot exceed 90 percent of the cost a private school’s charges for tuition and fees.
“I’m definitely in favor of it,” Bill Cobey, chairman of the State Board of Education, told CJ. He said the measure is “very consistent” with his longstanding school choice stance.
“If this bill becomes law, our state would advance to the forefront of the school choice movement in the United States,” said Terry Stoops, director of research and education studies at the John Locke Foundation. “North Carolina would become just the 13th state to pass school voucher legislation and the sixth to approve a means-tested voucher.” Stoops outlined his ideas for a voucher program in a recent JLF report.
It now costs state and local governments $6,745 to educate a typical child in public school, and $8,414 when including federal allocations, according to Stam. The average opportunity scholarship is expected to be $3,990, according to a fiscal analysis memorandum by the legislative Fiscal Research Division.
Paying for a lower-cost private school grant would reduce state public school expenditures by $17.7 million in 2013-14 and $25.4 million in 2014-15, according to the fiscal analysis.
The memorandum states 52 percent of public school students would meet grant eligibility requirements in 2013-14, rising to 65 percent in 2014-15. Of those, 3,669 public school students would receive the opportunity scholarships in 2013-14, and 5,990 in 2014-15.
There would be 9,635 new scholarships in 2013-14, and 62 percent of them would go to existing private school students in 2013-14, according to the fiscal analysis. There would be 11,493 student scholarships for 2014-15, with 48 percent going to private school students.
The grant money could be applied to “whatever the school requires the students to pay. That could be called tuition, it could be called a fee, but if it’s a required payment it qualifies,” Stam said.
“The money is following the child. This is not a subsidy to the school,” Stam said.
“The check will be made to the parent but mailed to the school” chosen by the parent, Stam said. “But the parent will have to physically come in and endorse the check to the school.”
“I’d say it’s a great opportunity for the children of North Carolina to have some options, some practical options,” if they are unable to afford private education, Stam said.
“I’m for parental school choice, student school choice, in public education, in private education,” Cobey said.
“And yes, I’m for public charter schools, yes I’m for opportunity grants, and I think it will give us a mix of education that will greatly benefit the children, the parents, and the prosperity of the state,” Cobey said.
“I just believe that one size does not fit all,” Cobey said. It is vital to offer educational options “in order to keep young people in school, engaged, interested, and moving towards getting the kind of education that will give them an opportunity to have a career, whatever that is.”
“We’ve been trying to do this for about 20 years. It is nice to have a majority in the legislature to be able to actually do it,” Stam said.
He’s also gained bipartisan support, he said, having talked to “about 30” Democrats regarding his proposed legislation.
Stam said, “One of the primary sponsors [of the bill] will be an African American Democrat,” Rep. Marcus Brandon, D-Guilford.
According to a March poll taken by the Civitas Institute, 78 percent of Democrats surveyed support a $4,200 opportunity scholarship, and 12 percent oppose it. Among Republicans, 67 percent were in favor and 17 percent opposed.
The Civitas poll showed 83 percent of black respondents favored a $4,200 scholarship grant and 6 percent opposed it. Among white respondents, 67 percent supported it and 19 percent were against it.
Stam wants the state to allocate $40 million the first year, and $50 million the second year. The amount could be adjusted in succeeding years according to demand.
He said the spending levels were derived from the approximate demand experienced by other states that have such policies. His bill is “an amalgamation” of practices in four other states and policy ideas tailored for North Carolina.
The State Education Assistance Authority would administer the opportunity scholarships under Stam’s bill. The authority would establish rules and regulations for awarding the scholarships and verify eligibility through random checks.
Stam’s measure would broaden the authority’s oversight from college financial aid and savings programs to K-12 students for the first time.
“Their expected administrative expenses will be 1 percent. They’ll keep $400,000 the first year to do the administration,” Stam said. “Compared to most government programs, 1 percent for administration is pretty good.”
To be eligible for a grant, household income would be restricted to 225 percent of the federal poverty level the first year, or $52,988 for a family of four, and 300 percent thereafter, or $70,650 for a family of four.
Priority for the grant money would be given to students who had received an opportunity scholarship in the previous school year. Among other eligibility requirements would be students switching from at least one semester of public school to private school of any grade, those adopted within the previous year, those entering kindergarten or first grade, a child in foster care, or a child in the household of a full-time, active-duty member of the military.
Testing for scholarship students “would be submitted to the state for statistical purposes, so we can know in two, or three, or four years whether we’re helping improve the education of scholarship students. But the tests are not new tests, they’re tests already required,” Stam said.
Private school test results are open to inspection by the governor at an individual student level or in the aggregate.
Feedback has been “very positive, except for the folks you would expect to oppose this — school superintendents and the NCAE [North Carolina Association of Educators], the usual,” Stam said.
“This bipartisan legislation has an excellent chance of passing, but it will not be easy. Gangs of well-funded public school advocacy groups are committed to strengthening the status quo, regardless of the harm done to children,” Stoops said.
“All school choice mechanisms have pros, cons, and tradeoffs. The major drawback of using a direct government voucher is that it tends to invite excessive government regulation on participating families and schools,” Stoops said.
“A carefully designed voucher law, like the one proposed by members of the North Carolina House, may mitigate the risks associated with a program that routes taxpayer funds to private institutions,” he said.
“Vouchers tend to be more transparent and easier for parents to understand than other types of school choice options,” Stoops said. “Furthermore, voucher programs do not require changes to the tax code, which is ideal for states, including North Carolina, that are considering major tax reforms.”
Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.