"Our track record shows that simply pumping more money into the nation's public schools does not improve the quality of K-12 education," stated JEC Member Rep. Jim McCrery (R-LA). "That's because the problem with most of our primary and secondary schools is not a lack of funding—the problem is a lack of accountability and competition, two ingredients that exist in every other niche of the educational market."

      Public schools monopolize the market for affordable education, and, as a result, they are not always held accountable for poor performance. Consequently, they have little incentive to improve quality or control costs. An effective plan to reform K-12 schools must create these incentives by giving parents more control and more choices over their children's education.

      One proposal to increase choices for parents would allow them to establish tax-free saving accounts to encourage them to save for their children's K-12 education. Such accounts already exist under current law for higher education. Parents could put money away in these accounts, and earnings would never be taxed as long as they are used to finance educational costs. Parents could use the savings to pay for educational expenses at public, private, or religious schools or for other expenses such as computers, tutors, or educational therapy.

      "One advantage of these saving accounts is that they are not targeted to a small sub-population in a certain community," McCrery stated. "They can be used by all low- and middle-income families so they can generate real competitive pressures that will instigate reforms in inner-city, suburban, and rural schools. Saving accounts will help all students, whether they leave for private schools or stay in the public schools."

      Data on school enrollment shows that families with incomes under $35,000 represent 25 percent of all families with children in private schools; 66 percent of all families with children in Catholic elementary schools; and 45 percent of all families with children in Catholic high schools. These statistics suggest that many low-income families are willing to make the financial sacrifice necessary to provide their children with a good education. Saving incentives will greatly benefit these families, and they will encourage many other families to start saving for their children's education.

      The report also addresses many of the issues raised by parental choice in education, such as legal issues and the effect on government funding of public education.

      For a copy of this study, please contact the JEC at (202) 224-5171 or view its website at http://www.house.gov/jec.

Press Release: #105-98

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