Corporate support for school choice doesn’t come without tension

New Jersey Governor Chris Christie and Newark Mayor Cory Booker may have been the bookends that roused the assembly at a school choice policy summit last week in Jersey City, but it was a largely unknown corporate representative who provided some sobering perspective.

Policymakers will initiate change quickly if they design their choice policies smartly.

That’s because it was Erika Aaron’s job to talk about what happens after legislatures win the fight to establish vouchers or tax credit scholarships, which Christie said had “the chance to get the most change, the most quickly.” No doubt, Aaron shared the same sense of urgency with others at the American Federation for Children’s annual summit, but she also reminded the participants that they’ll initiate change quickly if they design their choice policies smartly.

Aaron is the community relations director for Waste Management, Inc., which has contributed $16 million to the Florida Tax Credit Scholarship program alone as well as millions to similar programs in other states in exchange for a tax credit. But Aaron said the company is particular about where it redirects its tax liability, and a smart private school choice policy to Waste Management may not be the most disruptive.

Unlike voucher programs that receive direct taxpayer support, tax credit scholarship programs in Florida, Georgia, and Arizona, just to name a few, need corporate support. While these companies receive a tax credit for their contributions, they do have the views of shareholders and employees to consider. Indeed, Aaron said she convinced Waste Management executives that this was a cause worth supporting only after determining that, in addition to the tax credit, four standards would be met:

  • That the scholarship be means-tested: While tax credit scholarship programs vary in their approach to means-testing and in their definition of “low income,” Aaron said support from Waste Management depends on whether the scholarship is first helping those who are the least able to afford a private school on their own.
  • That the program is transparent: The level of accountability and transparency in most tax credit scholarship plans varies as widely as the approach to means-testing, but Aaron said that scholarship programs need to show that they are being good financial stewards of the public trust and that they are meeting the academic needs of their students. Many programs in Arizona and Georgia have little accountability to taxpayers, and so they get little, if any, support from Waste Management.
  • Scholarship portability: Some programs limit scholarships to only a couple of schools or a network of schools, which limits the range of choice that the scholarship was supposed to provide. Aaron said an effective program in no way restricts a student to move from one school to another with the scholarship.
  • That the program provides a savings to the state budget.

The reason that Waste Management has contributed more to Florida than in any other state is because the Florida Tax Credit Scholarship program meets these standards better than others (Disclosure: I helped to run the policy and communications initiatives for the Florida program from 2009 to 2011). Most of these restrictions are established in Florida Statute. In Georgia and Arizona, for example, they are not. Only a few scholarship funding organizations in those states voluntarily limit their scholarships to the poorest students and voluntarily submit to greater transparency, and it is to those few that Waste Management directs its support.

This has lessons for anyone with a stake in the current movement toward expanded private school choice, including for those who would allow families of all income levels access to a tax credit scholarship and those who would resist attempts to enhance transparency and accountability. Their political victories, if they come, may be short lived if the corporate support necessary to bankroll the scholarship doesn’t follow.

But this also has a lesson for those who argue that school choice is nothing but a corporate takeover of public education. In reality, a corporation is nothing if not an alliance of individuals with competing interests and varying degrees of power. In this context, some in Waste Management have more in common with skeptics of school choice. The internal corporate tension resulted in some stipulations the company favored before it put its name and reputation in a controversial enterprise.

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