​In today's episode of "This Week's Economy," I discuss the latest GDP report, the House Republicans passing a new debt ceiling bill, School Choice, state budgets, social media bans, and more.

Thank you for listening to the 6th episode of "This Week's Economy,” where I briefly share my insights every Friday morning on key economic and policy news at the U.S. and state levels.

Today, I cover:
1) National: Findings from the latest GDP report released yesterday (April 27th) and the debt ceiling bill passed by House Republicans;
2) States: Updates on Universal School Choice and budgets across states, especially Texas and Louisiana; and
3) Other: Bills circulating on restricting social media, and more.

You can watch this episode on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor (please share, subscribe, like, and leave a 5-star rating).

For show notes, thoughtful economic insights, media interviews, speeches, blog posts, research, and more at my Substack directly in your inbox.

The school choice revolution in the form of universal ESAs is sweeping the nation. This is extraordinary news for students, parents, teachers, and the economy.

Florida recently became the fourth state to adopt universal school choice in 2023. Earlier this year, Iowa, Utah, and Arkansas joined the rebellion against “public” school monopolies by passing universal school choice after West Virginia and Arizona ignited the revolution last year. There are now more than 10 states with education savings accounts (ESAs), and more likely coming soon.

But Texas, Louisiana, Ohio, Alabama, and other states must follow their lead or have their students and economies be left behind.

Although there are still naysayers slowing progress, the tide for school choice is growing as more parents and teachers are persuaded that school choice empowers them and their students. But an often overlooked benefit of school choice is it supports a stronger economy.

Evidence shows that school choice is connected to improved student outcomes, increased teacher pay, and growing economic opportunity, to name a few of its benefits. School choice’s positive effects on these measures counter the problems in the “public” school system, which is an oxymoron.

“Public” schools can exclude students, which a public good can’t do. Also, any positive benefit of this so-called “public good” is questionable at best, given declining test scores and long waiting lines for charter schools.

More accurately named, government schools are funded by taxpayers and operated by government employees. As the only “free” option and a monopoly in states without school choice, government schools have little incentive to improve the flawed one-size-fits-few approach.

This also contributes to many high-quality teachers being underpaid. Government schools have few reasons to efficiently manage funds because they keep getting more taxpayer money regardless of their outcomes. This helps explain why too much money goes to over-paid administrators instead of teachers, and taxpayers don’t get what they pay for regarding academic and work outcomes.

Taxpayers pay about $16,000 per student per year, and that continues to increase over time even after adjusting for inflation. And yet, our students are underperforming academically, falling behind kids in other countries. These outcomes were exacerbated by school shutdowns during the pandemic that left students even less equipped, but this has been a longer-term trend.

More school choice is needed to motivate government schools to stop promoting mediocrity.

In states like Arizona, where all students above the age of five who live in the state are allotted the same amount of funds, parents of all types now have a range of options, no matter their demographic or socioeconomic status.

School choice is finally letting free markets, meaning free people, work in an arena that’s been monopolized by the government for too long.

Yes, taxpayers would still fund ESAs. But until states decide to get out of the schooling market, the next best alternative is to allow competition whereby the dollars follow the child instead of to a system.

In states like Florida with ESAs, parents can vote with their dollars on the best schooling options for their children, forcing all schools, including government schools, to stay competitive if they hope to attract and keep students by providing the best educational outcomes and extracurricular activities.

Giving families more freedom to choose schools, tutoring, and other resources for their unique kids will better equip them to perform better academically and in their careers.

Instead of most students — and almost all underprivileged students — being shuffled through the same one-size-fits-few government schooling system, ESAs allow students to flourish into well-rounded adults, leading to better careers, a more productive workforce, and a faster-growing economy.

The positive economic ripple effects of a society with more access to better education are myriad.

More educated societies tend to experience less crime, decreasing burdens on public services and increasing social trust, which is crucial for the economy. Additionally, more education is linked to higher incomes and improved health. These reduce the number of people in poverty, which reduces the number of people dependent on safety nets funded by taxpayer money, thereby reducing government spending and taxes, resulting in even better economic outcomes.

All these elements are conducive to happier, healthier people with more means to prosper, produce, and innovate, which in many ways is the bedrock of a better economy and livelihoods.

With more than 10 states providing the option of ESAs, including four states providing universal ESAs this year, why not take it to all 50? Texas, Louisiana, Ohio, Alabama, and others ought to be next or risk their students and economies being left behind.

Originally posted at the Daily Caller.

In today's episode of the "Let People Prosper" podcast, which was recorded on February 27, 2023, I'm joined by Randan Steinhauser, who shared her insights on School Choice, including:

1. Why School Choice puts students, parents, and teachers first;
2. How government-run schools are a failing system that put families last and educational bureaucrats first; and
3. Why Universal Education Savings Accounts (ESAs) are the best path forward for school choice in Texas and beyond, and much more.

You can watch this interview on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor (please share, subscribe, like, and leave a 5-star rating).

​Randan Steinhauser’s bio and other info (here):

• Randan Steinhauser is the Founding Partner of Steinhauser Strategies, which she launched in 2013 after relocating to Austin from Washington, D.C. Randan specializes in issue advocacy, non-profit, and corporate communications.
  
• Randan’s career began in the Governor’s Office in South Carolina. In 2009 she joined the staff for U.S. Senator Jim DeMint in Washington, D.C. and later transitioned into the non-profit world working in foreign policy and education reform for former U.S. Secretary of Education Betsy DeVos.
  
• She has worked in more than 30 states on issue advocacy and political campaigns. Randan assists clients with media relations, coalition development, strategic communications, and government affairs.
  
• Originally from South Carolina, Randan is a graduate of The University of South Carolina. She attended The Women’s Campaign School at Yale University and is currently pursuing her Master’s in Communication from Johns Hopkins University. She is the proud mother of four including a set of identical twins.
  
• Find her on Twitter (@RandanMarie).
  

​Get this: For the low price of more than 16,000 tax dollars per student each year, your child can receive one-size-fits-all education that too often prioritizes woke ideology over workforce readiness. What a bargain!

Maybe that’s why so many families have left the public education system over the past few years. School shutdowns, mask and vaccine mandates, and even the lack of safety in the public education system have parents running for the hills. They understand that the deal they’re being offered isn’t a deal at all and that the public school system is broken and in need of serious repair.

​Teachers have also started leaving the profession in droves. They’ve realized they have little to no negotiating power for better pay or support because the teacher market has a monopsony, with public schools being the dominant consumer of their services.

Lack of funding isn’t the problem, as inflation-adjusted total per-student revenue increased by 25% across the country from 2002 to 2020 . So, what's the issue?

Schools run by governments and funded by taxpayers, known as “public schools,” fail the economic test of being a standard public good and are designed to benefit politically motivated bureaucrats , not parents, teachers, or students. Regardless of whether these government schools are the best option for their child, parents are forced to pay taxes to fund them. Parents in less-privileged situations are usually stuck sending their children to the local government-run school, while wealthier parents may have the luxury of choosing to pay for another path.

​But it doesn’t have to stay this way. Some states are already showing us how to improve the education system through school choice . Education freedom puts education funds where they belong: in the parents’ pockets and out of the hands of self-interested bureaucrats.

Former Arizona Gov. Doug Ducey started the school choice revolution last year with the   Empowerment Scholarship Accounts . And this week, Iowa Gov. Kim Reynolds signed a universal school choice bill into law. Both states created education savings accounts that will give families about $7,000 per student per year to spend on any school-related expense, including private school tuition, home-school curriculum, tutors, etc.

Of course, Democrats and others tied to the government-schooling monopoly have found reason to raise alarm bells over this students-first movement. And they’re diligently spreading misinformation, including arguments that school choice would increase inequality.

But the opposite is true. With an Arizona- or Iowa-style school choice solution, all students receive the same financial support, regardless of their parents’ income, and public schools still receive funding, even if parents choose another option.
In fact, school choice breaks public schools’ monopoly and levels the playing field more than any other reform. These policies make sure that single, working, and disabled parents have the exact same educational resources for their children as wealthier parents.

Breaking the monopsony situation through school choice would benefit teachers. Suddenly, public schools would have the incentive to lower costs and improve pay for quality teachers so there are better outcomes, and teachers would have more job options. In other words, schools would be forced to compete.

That’s why school choice has been proven to improve the quality of public schools — competition helps increase incentives to hire and keep good teachers and provide a better curriculum. And if government school enthusiasts are concerned about losing funding, they should first ask themselves why those schools would lose funding if they’re as good as the education establishment claims.

Our public school system is a failing bureaucratic nightmare that puts students last. And this is contributing to fewer education outcomes, more poverty, and higher crime. School choice can — and will — change that.

Originally posted at Washington Examiner 

​Susan, a suburban married mother working one job, peacefully drops her son off at his private school and drives back to her gated community in a Range Rover. Because in addition to her cushy home and vehicle, another thing money can buy is any education for her son. She was able to assess each schooling opportunity to choose the one that best met his unique needs, settling on a private school. He’s thriving and on track to be admitted into a prestigious college that will propel him into his dream career.

Meanwhile, Rachel, an inner-city single mother working two jobs, anxiously drops her daughter off at the bus stop to her district-locked public school. Her daughter has special learning needs that aren’t best suited for a big public school environment, and her falling grades and reading scores make her daughter feel like a failure. Rachel reassures her daughter but knows she’s ultimately being let down by a system that doesn’t suit her. She wishes she could find a better schooling option, but that’s a choice she can’t afford, and it’s her daughter who suffers.

This disparity shows the reality of the current privilege-centered schooling system where wealthier parents have schooling options while budget-strapped parents are trapped at a government-run school in the district. A public school system run by educational bureaucrats with a schooling monopoly does not put students first. And it ultimately disempowers parents and teachers.

The solution to these issues already active in Arizona that Texas and many other states should adopt is school choice.
Despite being known for its business-friendly economy and family-loving culture, Texas lags in educational freedom. Meanwhile, Arizona, since implementing the most expansive school choice policy in the nation this year, received nearly 8,000 more new Empowerment Scholarship Account (ESA) applications as parents jumped on the opportunity to explore educational opportunities for their children.

Rather than funneling taxpayer money for education into government-run schools, school choice redirects those funds to families. Arizona has reimagined school choice in the form of ESAs that supply about $7,000 per student per year. Parents can use the money to fund any school-related expenses, such as private school tuition, homeschool curriculum, tutors, etc.
This approach empowers parents to pursue a more holistic approach to their children’s education rather than being forced to place them in a one-size-fits-all system that varies immensely in quality depending on location, mainly.

Not only are parents empowered with the ability to choose what’s best for their kids, but studies show that school choice positively affects academic outcomes. Students test better and experience overall improvement from a school that fits their unique needs. At the same time, new data on educational progress shows that public school performance has fallen behind even more since the pandemic.

School choice also increases competition, as public schools are more incentivized to improve education for their students by breaking down the monopoly situation (one dominant supplier). And this tends to provide better compensation for teachers who have little negotiating power in states where public schools have a monopsony (one dominant consumer).

So what’s the holdup? Well, for Texas and many other states, politicians in rural communities have pushed back against school choice.

This results from misconception and, in some cases, fear-mongering that school choice somehow defunds public schools, which would be a concern for rural areas where public school is the primary option. But school choice doesn’t take money away - it gives it back to parents and allows them to choose which education services receive it.

High-quality public schools will attract more students and, thereby, more funding. Public schools spend more than $14,000 per student per year in Texas, and outcomes for students and teachers are lacking, so more funding isn’t the answer. If the question is about funding for public schools, then those against school choice are conceding that public schools aren’t able to compete. So, it seems school choice opposition is more about politics and winning votes than what’s best for students, whether a parent is like Rachel or Susan.

The U.S. system of federalism allows for a laboratory of competition in which states can implement new ideas. Arizona is taking full advantage of this liberty and using it to empower its parents, students and teachers with educational freedom.
To remain competitive and among the freest states, the time is now for Texas to enact school choice. Our vote matters this November, so the next session will be when we can say, “It’s for the kids.”

Originally posted at The Center Square

​Are your kids getting the education they need—either in person, or remotely? It might depend on where you live; it should instead be up to you.

Schools shut down last spring. Some reopened in the fall, some did not. Others, like those in New York City, are closing again. Some schools are trying to mix in-person and virtual instruction.

This confusion should be alleviated as much as possible by allowing parents to decide which schooling is best for their kids.

Based on the evidence, it seems that schools can safely keep in-person instruction as they aren’t super-spreaders, and that many students benefit from this kind of instruction. A recent national poll found that more than 50% of parents are comfortable with returning to school. The same poll found that half of parents with a choice selected remote education for their children.

Ultimately, decisions about schooling should happen closest to students, starting with their parents. The COVID-19 shutdowns have shown us the need for school choice—letting parents decide what schooling works best for their children.

Families with means already have more choices, of course. Some have chosen to put their kids in private schools or home school. But other families can’t afford this and must try to make their public school work—while also trying to make ends meet.

For example, virtual instruction usually requires an adult’s care to ensure that a child is able to access instruction and learn. This puts extra pressure on working families—they might have to miss work or pay someone else for childcare.

We know that normal school breaks can lead to widened educational disparities. Continued school shutdowns could also lead to widening racial wealth disparities in America. A McKinsey study reported that the educational level of the average Black or Hispanic student is two years behind the average white student, based on many factors—including place of residence and wealth disparity.

That study also indicates that if in-person instruction doesn’t occur until January 2021 and students receive remote instruction at reduced learning rates (or even no instruction at all), “white students would earn $1,348 a year less (1.6% reduction) over a 40-year working life, [but] the figure is $2,186 a year (3.3% reduction) for Black students and $1,809 (3.0% reduction) for Hispanic ones.”

Continuity in students’ educational experiences are also at the forefront of parents’ concerns.

A recent survey of 600 full-time, public school teachers across the nation showed that 67% of teachers agreed that completion rates of assignments were worse during distance learning than in-person instruction.

The concern is especially high with low-income earners. The Texas Education Agency, for instance, reported a 55.6% drop this spring in progress for online math coursework for low-income families.

Still, for many families, the threat from COVID-19 is more concerning than the potential drawbacks of remote instruction, particularly for students or family members who are immunocompromised. And there are at least some families who have thrived in a remote education setting.

In the end, parents know their situations and concerns best. The choice should be theirs. In-person schooling, remote learning, or some other model should be their call.

The burden shouldn’t lie on parents to be flexible (and accepting of whatever school officials tell them they’ll receive); it’s the school districts that must be flexible—and accountable.

Child development doesn’t stop for COVID-19, or any other disruption. We owe American families the flexibility they need to keep their kids on track. And that should start with more choices for parents rather than top-down mandates by governments.

https://www.texaspolicy.com/schooling-options-are-essential-during-covid/

In this Let People Prosper episode, let's discuss how the recent election gives us insight on how we need more civil discourse to find ways to strengthen institutions so people can flourish. 

My recent paper on how institutions matter provides a good overview of what I discuss in this episode along with economic data to support the theory. Here is a graphic that explains rather well the ecology of human development. 

The data provide overwhelming evidence that the Texas Model of inclusive institutions with a relatively low tax-and-spend burden, no individual income tax, and sensible regulation provides an institutional framework supporting more job growth, higher wages, lower income inequality, and less poverty than in comparable states and the U.S., in most cases. Texas is doing something right. Other states and D.C. would be wise to consider adopting Texas’ inclusive economic and political institutions that champion individual liberty, free enterprise, and personal responsibility.

This is a path to providing an economic environment that allows entrepreneurs the greatest opportunity to thrive and for prosperity to be generated for the greatest number of people. Despite this success, improvements are needed to keep the Texas Model competitive and create even more opportunities for all to flourish. These improvements to Texas’ institutional framework include:

• limiting the growth in government spending,
• eliminating the state’s onerous business franchise tax,
• reducing barriers to international trade,
• reducing the escalating burden of property taxes, and
• relieving Texans from burdensome occupational licenses.

​Even with these improvements, the data overwhelmingly show it was not a miracle in Texas, but rather abundant prosperity generated by Texans from a proven institutional framework called the Texas Model. ​

By strengthening institutions to let people prosper, we can also engage in more civil discourse so that we have many opportunities to work together. 

​Texas’ public education spending, in inflation-adjusted dollars, has increased in recent years with little-to-no improvement in the quality of education received. A problem with the philosophy of throwing more money at the education problem expecting a different result is that it doesn’t work.

As you can see in Figure 1, per-student education expenditures have been volatile and are currently on the rise. This is interesting as a recent University of Texas study finds that 47 percent of Texas voters believe too little is spent on education.


Where is the money going?

From FY 1993 to FY 2015, student enrollment at public schools in Texas increased by 48 percent while non-teaching staff increased by 66 percent and teachers increased by only 56 percent. Public education spending should be dedicated to benefitting students, not excessively expanding administrative staff at schools.

Moreover, Texas teachers are only receiving roughly 21 percent of classroom expenditures, which is abysmal considering the importance of teachers. The average Texas teacher makes $51,891 per year, which may not be enough to attract the most talented teachers possible. If the increase in non-teaching staff had matched the increase in the student enrollment, Texas teachers could be earning an additional $6,318 per year.

​Despite what a plurality of Texans think, Texas should not just continue increasing per-student public education expenditures without focusing on the level of student achievement. By making major reforms to the state’s school finance system through student-centered funding and considering a simpler funding source, more students, teachers, and Texans can flourish.

​www.texaspolicy.com/blog/detail/should-texas-keep-increasing-public-education-spending

Does Texas need more money for public education? This question can cause heated debates, which were on full display during the 85th Texas Legislature’s regular and special sessions.  

Although most of the debate has centered on how much money has been or should be spent, the focus should not be on taxpayer dollars spent, but really on how best to increase student achievement.  

Read this paper to learn more: https://www.texaspolicy.com/content/detail/texans-need-more-education-for-their-money. 

Read the entire post with figures here: https://www.texaspolicy.com/blog/detail/spending-more-wont-solve-school-finance-or-property-tax-flaws-in-texas

The Texas Senate passed an education choice bill (SB 3), that was amended many times (overview of the latest version) last Thursday that allows lower income households and students with special needs to apply for an education savings account (ESA). It will allow an opportunity to access taxpayer dollars for education services that best meets students' needs instead of them too often being stuck at a public school that doesn't do so. 

I'd prefer that the final product of SB 3 was more like the original so it would be a more universal ESA program. This would have allowed many more students the opportunity to use this program.

Regardless, SB 3 is a great step forward for students, teachers, parents, and Texas!

The bill will go to the House now and hopefully make its way to the Governor. It's got an uphill battle, but students and families should have choices in education, just like they do with so many other goods and services, besides only those with the means to afford it.

The Texas Public Policy Foundation along with several other organizations were a key part of the fight for passing SB 3. I had the honor of helping out in that process, as I was surrounded by many individuals who are passionate about providing students, parents, teachers, and all Texans the best opportunities to succeed in the education system.

​Here's my recent testimony that summarizes research on fiscal, academic, teacher pay, and economic effects of educational choice through ESAs.

Here is my paper, The Effects of Education Savings Accounts on Teacher Pay in Texas, co-authored with Dr. John Merrifield of the University of Texas at San Antonio that highlights the fiscal savings of ESAs and the resulting opportunities for increases in teacher pay. Here's a summary: "Although public school districts employ roughly 90 percent of teachers in Texas, teachers have little negotiating power in today’s labor market. Budget reallocations at public school districts (with fiscal savings of $165 million) and private schools from ESAs could increase teacher salaries in the first year, with some increasing by as much as $28,000. A more competitive teacher labor markets will gradually contribute to increases in teacher salaries beyond those facilitated by ESAs and improvements in working conditions. It's clear that the freedom to choose in education and teacher labor markets will benefit students, teachers, and all Texans."

Here is my paper, Economic Effects of a Universal ESA Program in Texas, co-authored with Dr. Marty Lueken of Ed Choice that summarizes the economic benefits, fiscal savings, and other positive effects of education choice in Texas. Here's a summary: "Expanding education choice is a smart and sound investment that Texas can make to grow the state’s economy and build a stronger society, creating better matches between students and their education will likely lead to fewer dropouts, which would improve social and labor market outcomes. By expanding school choice, will improve the quality of education for Texas children, lead to higher property values, and spur job creation."

Of course, the results of the passed SB 3 will be less than a universal ESA program in our studies, but the fact remains that by allowing student-centered funding to replace the currently fundamentally flawed school finance system of school district-centered funding, many more students will be able to best meet their needs and benefit in the process.

Let's hope that SB 3 becomes law and that it is the first step toward a universal ESA program in Texas!

​Although public school districts employ roughly 90 percent of teachers in Texas, teachers have little negotiating power in today’s labor market. Budget reallocations at public school districts and private schools from ESAs could increase teacher salaries in the first year, with some increasing by as much as $28,000. A more competitive teacher labor markets will gradually contribute to increases in teacher salaries beyond those facilitated by ESAs and improvements in working conditions. It's clear that the freedom to choose in education and teacher labor markets will benefit students, teachers, and all Texans.

A simpler and efficient school finance system would be one that provides equitable student-centered funding paid for by taxes collected from a reformed sales tax.  

Video of my testimony begins at times 3:08:20: http://tlcsenate.granicus.com/MediaPlayer.php?view_id=42&clip_id=11595.

Here is the handout of my testimony: http://www.texaspolicy.com/content/detail/revamping-texas-school-finance-system.