In 1955, economist Milton Friedman proposed changing the funding of American schools to provide parents with "a sum equal to the estimated cost of educating a child in a government school, provided that at least this sum was spent on education in an approved school. ... The interjection of competition would do much to promote a healthy variety of schools. It would do much, also, to introduce flexibility into school systems."

What is the legacy of this "father of school vouchers," who passed away on Nov. 16? States have found innovative ways to embrace Friedman’s 50-year-old idea. Among the programs around the nation built on Friedman’s ideas are corporate and individual tax credits, special education scholarships and a number of forms of targeted voucher programs.

Tax credit programs, allowing for either corporate or individual deductions on state tax liabilities, are becoming a more popular method of expanding school choice, as they are easy to use and generally avoid the murky waters of "Blaine Amendments." Blaine Amendments are amendments in many state constitutions (including Georgia) that were created out of anti-Catholic sentiments in the 19th century to prevent state funds from going to any single religious group.

Four states currently have corporate tax credit programs: Arizona, Florida, Pennsylvania and Rhode Island, and two (Arizona and Iowa) allow individual tax credit deductions. Under either tax credit program, corporations or individuals donate money to a "School Tuition Organization" (as they are called in Arizona) of their choice, which can be created by individual schools or other nonprofit groups. These "STOs" then turn that money into scholarships for low-income students to use at schools of their choice.

According to the Alliance for School Choice, corporations in Arizona can receive credit for up to $10 million per year (statewide) beginning in 2007-08, and this cap will increase annually by 20 percent. In Florida corporations can receive a dollar-for-dollar credit up to 75 percent of their state income tax liability; the cap for individual corporations is $100,000 in Pennsylvania and Rhode Island; a total statewide cap on donations exists in all four states. In 2005, Arizona’s individual tax credit program generated $30,863,153 in donations to 54 STOs, which paid out 22,552 scholarships averaging $1,370.

Special education is another area where choice is being expanded around the nation. Florida, Ohio, Utah and, of course, Arizona, all have programs enabling special education students to use some form of vouchers to seek out schools that will best serve their unique needs. As of 2003-04, 609 private schools were serving students with disabilities in Florida and 26 were registered to receive similar scholarship students in Utah during the 2006-07 school year. Ohio’s program is targeted at autistic students, and currently serves nearly 500 students.

Several publicly funded voucher programs also exist around the country. The Milwaukee Parental Choice Program is the oldest, created in 1990. Students in this program received scholarships of up to $6,351 in 2005-06, and are able to choose among the city's traditional public, religious and nonreligious private and charter schools. In 2005, the district reached its previous cap of 15 percent of the district’s enrollment, and the cap has since been raised.

The city of Cleveland, Ohio, has had a similar program since 1995, and beginning in 2006-07, the state of Ohio has enacted the Educational Choice Scholarship Pilot Program (EdChoice) to provide 14,000 scholarships statewide to students who attend schools that have been classified in a state of "Academic Watch" or "Academic Emergency" for three years, with priority going to low-income students.

In 2004, the U.S. Congress passed the District of Columbia School Choice Incentive Act. Under this Act, low-income students in Washington, D.C., are eligible to receive scholarships of up to $7,500 (still significantly less than the average of over $11,000 for D.C. Public Schools) to cover the costs of tuition, school fees, and transportation to a participating school of choice.

Milton Friedman once wrote that "Governments never learn. Only people learn." Traditional public schools have no built-in incentives to compete with other schools; only to seek out more money and more programs. We learned long ago that incentives matter, and that competition and choice improve our material lives, in terms of lower prices for everything, a stronger economy and an improved standard of living. What could be better for at-risk students than to have several schools competing to help them?

Georgia has not learned to try using any of the above methods to improve our schools. But targeted programs could be extremely useful in helping students who might otherwise be forgotten or ignored. It’s time to finally listen to Milton Friedman, take the initiative, and apply his lessons for helping our most vulnerable and disadvantaged children.

© Georgia Public Policy Foundation (December 1, 2006). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.