by Georgia Center for Opportunity | Oct 26, 2016
In the dust-up of this election year, education settled near the bottom of the heap of news headlines. Before the final presidential debate, a Politico banner read, “Will Trump and Clinton Ever Debate Education?” Both candidates have education policy proposals, but these ideas have been buried under column inches devoted to hacked emails and sordid trysts.
Education may not be in the headlines now, but learning is front and center for parents and families across the country every day. And no matter who is elected, states and the federal government stand to ask taxpayers for another $600 billion or more next year to cover the educations of some 50 million students.
So, what could Donald Trump and Hillary Clinton’s education proposals mean for taxpayers and parents?
In September, Donald Trump announced that he is in favor of school choice. Before we celebrate, know that Trump volunteered taxpayers to pay $20 billion to provide more choices in education for low income students. The money will purportedly be repurposed federal funds—not requiring new money—yet this proposal is a stretch.
The largest portion of federal money for K-12 is directed by Title I of the Every Student Succeeds Act (ESSA), Washington’s education law, and totals approximately $15 billion, a figure close to the amount Trump plans to redirect. Last year, Congress fought for months over whether Title I could be repurposed as a school choice option for families. The proposal eventually failed.
Thus, Trump says he can do what Congress couldn’t with a significant sum of federal education money. Herein lies the problem with federal officials trying to meddle in issues best left to states, like education: It’s easy for a Washington lawmaker to overestimate his ability to build consensus around ideas he may like and underestimate the drudgery of the deliberative process.
Such drudgery has a purpose, namely to protect individuals and their interests by requiring lawmakers to engage in intentional, consensus-building efforts first. Even if he can build a consensus in Congress, Trump would have to convince state leaders that his idea would not interfere with states’ school choice programs, like Georgia’s tax credit scholarships or Special Needs Scholarship Program.
Furthermore, regulations inevitably follow money from Washington. President Obama signed ESSA in December 2015, and education officials around the country are still deciphering what the law means for states. We may not see the full litany of regulations until November, nearly a year after Congress voted on the law and the president made ESSA official.
Hillary Clinton has designs on more taxpayer money at the pre-kindergarten, K-12, and postsecondary levels. She plans to require taxpayers to pay for preschool for all 4-year-olds, regardless of a child’s learning needs at that age; spend more taxpayer money on computer science and school facilities; and allow taxpayers to pay tuition for college students coming from families making $125,000 or less.
While Trump’s promises are too broad to help states’ different needs (and expensive), Clinton’s are too specific (and also expensive). The job market changes too fast and Washington moves too slowly to adequately forecast future needs. Meanwhile, ideas like more money for school buildings are hardly innovative but surely expensive. The Wall Street Journal’s Daniel Henniger wrote recently that Clinton’s campaign promises amount to “pouring more federal money down the public-schools mine shaft.”
Regardless of what happens November 8, parents and state lawmakers should not expect the White House to solve the problems presented by only 37 percent of high school seniors being prepared for college work. Parents need quality opportunities to prepare their child for the future, whatever it may hold. State lawmakers should continue to broaden students’ horizons with education savings accounts and individual course choice options and protect existing learning opportunities like charter schools and private school scholarships.
Lawmakers’ responsibilities—especially state lawmakers’ responsibilities with respect to Washington—are to protect individual liberties and restore them as needed, no matter who sits in the Oval Office. Or perhaps because of who sits there.
Jonathan Butcher is a contributing scholar for the Georgia Center for Opportunity and Education Director at the Goldwater Institute.
The opinions expressed herein are those of the author and do not necessarily represent the opinions of the Georgia Center for Opportunity and are not intended to aid or hinder any political campaign or the passage of legislation before the US Congress or the Georgia General Assembly.
by Georgia Center for Opportunity | Sep 30, 2016
In 1952, Patrick Skene Catling wrote The Chocolate Touch, a retelling of the King Midas fable that reminds us we can have too much of a good thing. In Catling’s story, the main character finds that everything he eats turns to chocolate (with King Midas, everything he touched turned to gold). Hilarity, and nausea, ensues.
The Georgia Budget and Policy Institute’s latest report on the state’s HOPE and Zell Miller scholarships provides valuable findings about college scholarships and the students using the funds. The Institute’s recommendations, however, might give us too much of a good thing.
The Institute reports that a smaller percentage of low-income students use the scholarships (30 percent) than middle and upper-income students (42 percent). The authors are correct when they say that college tuition has “skyrocketed” recently—a finding that is true for colleges around the country. The authors also make a compelling point when they write, “Students need more options to gain valued skills and enter successful careers, regardless of their families’ background or bank account.”
Yet their solution will not solve the college cost problem nor the opportunity issues. The Institute suggests lawmakers find “an enhanced approach to financial aid that ensures students from all backgrounds…can gain the benefits of a college degree.”
If the Institute’s goal is to help qualified students—regardless of background or income—get help paying for college, such an objective may result in better candidates entering the workforce. But the report’s emphasis on sending as many students to college as possible should give taxpayers and students pause.
The Cato Institute’s Neal McCluskey has documented research that links increasing college tuition with increased levels of federal aid (similar to the “Bennett Hypothesis,” formulated by former U.S. Secretary of Education William Bennett). State lottery proceeds fund the HOPE and Zell Miller scholarships, but universities’ incentives remain the same: If scholarship funding is almost guaranteed, why lower tuition, especially if students can combine a scholarship with federal aid? Scholarships help students pay tuition, but this assistance does not create an incentive for schools to keep costs down.
Moreover, both scholarships require students keep their grades up in order to participate. The Institute says the merit-based awards are “disproportionately out of reach for students of modest means.” Yet the state should not lower the bar for this assistance because sending a student to college that is unprepared for higher education does not help that student.
Policy debates on college tuition and student opportunity intersect when unprepared students step on campus. If an undergraduate drops out without a degree, they find themselves in need of a job but without a degree to improve their prospects. According to an Urban Institute report, “Not completing a degree is a significant predictor of repayment difficulty and default,” as 43 percent of college dropouts that used college loans have debt levels of $10,000 or lower. A quarter of college dropouts that used loans have debt levels of between $10,000 and $20,000.
Sending everyone to college, even if they are unprepared, puts students from low-income families at great risk for debt later in life. Students with few resources that struggle in school and dropout of college will struggle to attain the American Dream even when well-intentioned policymakers try to help.
The Georgia Budget and Policy Institute’s report on scholarships provides a useful analysis of the kinds of students using state scholarships for higher ed. Furthermore, the Institute’s suggestion that the scholarships be available to students in their 20’s and 30’s may help nontraditional students that enter college later in life.
But in order to help more students succeed in their education and career, state lawmakers should give students better access to quality learning opportunities in K-12, like education savings accounts and encouraging the growth of high-quality charter schools. Meanwhile, policymakers should commit to helping students, no matter their socioeconomic status, make informed decisions about whether college is the right choice.
With the prospect of long-term debt, the idea of sending as many students to college as possible should make taxpayers—and students—nauseous.
by Georgia Center for Opportunity | Sep 26, 2016
Georgia Center for Opportunity hosted the inaugural “Hiring Well, Doing Good” breakfast on September 13th. The event brought together close to 150 business, community and nonprofit leaders to discuss ways to help the chronically un- and under-employed to find work.
We heard from business leaders like Phil Stroud of Tip Top Poultry and Luke Marklin of Uber, who highlighted their companies’ efforts to provide jobs and training to individuals who struggle – for various reasons – to find and maintain steady employment. Phil told the story of an employee who, through a lapse in judgement, spent 10 years in prison – but is now working in a management position for Tip Top, earning $18 an hour for his family.
Bruce Deel, founder and CEO of City of Refuge, shared about his organization’s success in empowering some of Georgia’s most vulnerable individuals and families to become independent and self-sufficient. City of Refuge will soon graduate its 20th class of culinary students, many of whom are formerly homeless, but are now equipped with the skills to obtain gainful employment in some of our city’s top restaurants. And Frank Fernandez of the Arthur M. Blank Family Foundation inspired us with the creative ways his organization is encouraging construction contractors working at the stadium to hire returning citizens and generate long-term jobs for the unemployed.
We are grateful to Seth Millican and the Georgia Chamber of Commerce for cohosting “Hiring Well, Doing Good.” We were especially encouraged that 100% of survey respondents found the event helpful, 91% left feeling better informed about the chronically un- and under-employed and how to help, and more than 40 connections were made with human service organizations. It was great to see the conversations happening and connections being made both before and after the event, and we’re excited about what develops from this event.
If you’d like to learn more, please visit www.GeorgiaOpportunity.org/Hiring-Well-Resources.
by Georgia Center for Opportunity | Aug 31, 2016
Computational model exposes severe problems with the welfare system
Previously, it was shown how a single mom with two kids in Gwinnett County could lose welfare program benefits by earning more money. This explained why $9 + $1 can equal negative $6,000.
The Gwinnett county example showed only two wage levels. However, the computer model provides results for a large range of wage levels and family structure. This enables policymakers, administrators and interested citizens to see a more complete picture of the challenges facing a family in poverty.
The computer model can generate scenarios in any of the other 158 counties in the state of Georgia.
No matter the county welfare cliffs (that unintended consequence of the current welfare system whereby an individual or family loses by earning more) can be found – essentially trapping families into a level of income.
These cliffs can be clearly seen on the chart below. Wherever there is a drop in a line, there is a loss in benefits that exceed the gain in earned income.
Also clearly seen, the benefit levels are very high and the severity of the cliffs significant. More surprisingly, there is not just one cliff but a series of cliffs that cascade down.
The chart shows that when government benefits are taken into account, it is financially better for a single mom to earn an hourly wage of $9 than an hourly wage three times as much, or $27 per hour.
Of course, it is important to point out that the severity of the cliffs and the income levels where they drop off change depending on the county, the characteristics of the family, and other factors.
These findings underscore the need to undertake fundamental welfare reform beyond the various reforms already being implemented. The system needs to become more rational so not to punish families who try to get ahead by earning more money.
A forthcoming study will highlight other examples.
Chart showing welfare cliff for typical family in Gwinnett County:
How to read the chart: The chart above illustrates the scenario highlighted in this and the prior posts , that is, a single mom with two children in Gwinnett county. The horizontal axis is gross earned income, and the vertical axis is the sum of net earned income plus the various welfare assistance benefits. The first line on the bottom is net earnings. The next line above is net earnings plus refundable tax credits. Each line stacked above adds another government benefit in the following order: TANF Cash, food benefits (Food stamps, free school meals and WIC food packages), housing (Section 8 Housing Choice Vouchers), subsidized child care (the CAPS subsidized childcare program), medical assistance (Medicaid and PeachCare), and Affordable Care Act subsidies.
by Georgia Center for Opportunity | Aug 25, 2016
Computational model exposes severe problems with the welfare system
Pop quiz: When does $9 + $1 equal –$6,000?
This may look like new math, but it is not.
This seemingly nonsensical equation illustrates the challenges faced by families who receive assistance from means-tested welfare programs.
In fact, these exact numbers come from a computer model I designed, which was sponsored by the Georgia Center for Opportunity. It evaluates financial incentives, or more precisely, disincentives embedded in our nation’s welfare system.
This computer modeling examined the potential case of a single mom with two children in Gwinnett County, Georgia. Using 2015 data, if she were offered the opportunity to earn $10 per hour instead of earning $9 per hour, she would lose nearly $6,000 in welfare benefits within a year’s time.
The reason for the loss is not due to her earned income. By increasing her earnings from $9 per hour to $10, she nets an additional $1,820 a year. The reason for the loss has to do with the way the welfare system is designed, or more accurately, the way it has been haphazardly put together over the past fifty years. At $9 per hour, the single mom would be eligible for the following means-tested programs:
the earned income tax credit ($5,419),
additional child tax credit ($2,000),
food stamps ($2,772),
free or reduced-cost school meals ($502),
WIC food packages ($480),
Section 8 housing choice voucher ($9,805),
subsidized childcare ($8,918), and
Medicaid ($4,570).
When added together, this single mom has a benefits package—courtesy of the taxpayers—estimated at $34,467. So instead of bringing home $17,266, her estimated income is actually $51,733 after government subsidies are included. To state it differently, for every $1 she earns in net income, she is eligible for nearly $2 in welfare benefits.
Now consider the case if she would earn $10 per hour. She would still receive means-tested benefits, but the benefit amounts will change as follows:
earned income tax credit ($4,977),
additional child tax credit ($2,000),
food stamps ($2,352),
free or reduced-cost school meals ($502),
WIC food packages ($480),
subsidized childcare ($8,658),
Medicaid ($4,570), and
Affordable Care Act credits and subsidies ($3,152).
In summary, her benefits drop to an estimated value of $28,938. When combined with her take-home pay, she is worse off by nearly $6,000 from earning $10 per hour than earning $9 per hour.
What this example demonstrates is the infamous welfare cliff, that unintended consequence of the current welfare system whereby an individual or family loses by earning more.
Unfortunately, this example is not an isolated incident. It represents what’s happening everywhere.
