The Problems with the Texas House of Representatives’ School Choice Bill

The Book of Daniel tells us that “Nebuchadnezzar king of Babylon came to Jerusalem and besieged it.” As we know, he was successful and completely destroyed Jerusalem and its temple, visiting God’s wrath on His people for failing to worship Him. After his victory, Nebuchadnezzar recognized the talent of some of the Israelites who survived and “he commanded Ashpenaz, his chief eunuch, … to teach them the literature and language of the Chaldeans” so that they might become officials in his kingdom.

This highlights the fact that public education has been around for a long time—at least 2,500 years. Its purpose, then and now, has been to create a class of citizens who are able and willing to support the goals and work of the state.

Donald Trump has been elected president twice because voters came to realize that the goals and work of the state are not always aligned with the interests of the average citizen. As we examine three aspects of the current school proposal in the Texas House of Representatives—House Bill 3, we will keep in mind whose interests are being served.

Cost

The school choice program under House Bill 3 will receive about $1 billion to fund the program for the 2026-27 school year. This is in addition to another $12 billion in increased public-school funding the House has proposed in its budget; $7.5 billion of which is accounted for in House Bill 2, the government school funding bill. While these are separate bills and separate programs, make no mistake the two are tied together. The Legislature, both House and Senate, are using school choice as a cover for a massive increase in funding for government schools. Or, perhaps, they are using the $7.5 billion as a bribe to get the public education establishment to not protest—too much—about school choice. Whichever way this game of thrones plays out, it is taxpayers that will be on the hook for the $13 billion price tag.

Regulations

Another problem with HB 3 is the requirement that the education expenses using an Education Savings Account (ESA) must be “approved;” in fact, they must be “preapproved.” Families using an ESA are not allowed to spend the money on just any “educated-related service” or product. Rather, parents will be allowed to spend their ESA funds only on products and services that come from “preapproved providers and vendors.”

For families interested in using an ESA for a pre-approved private school, the school must be accredited. For homeschool families, tutors and teaching services must also be accredited or have a license. Additionally, purchases of curriculum, books, online courses, etc. must be made from vendors who have been pre-approved by the Texas Comptroller. HB 3 provides little guidance to the comptroller on this. It is likely homeschooling families will face significant challenges in the ESA program using the same products and instructional services they currently use.

Tax Dollars Instead of Tax Credits

The underlying problem with HB 3 (and the Senate’s SB 2) is that it funds school choice with tax dollars instead of tax credits. One problem with this is that by using taxpayer funds it makes it much easier to extend government regulation on private and home schooling. Along these lines, using tax dollars also increases the calls for “accountability” of the use of the ESAs. Accountability has its place, but I wish we’d hear a lot more calls for accountability when it comes to spending by government schools. Finally, using tax dollars in a separate account reduces the competition for funding that government schools must face and the need for them to improve. One of the key selling points for school choice is that it will improve government schools; that is unlikely to happen if HB 2 and HB 3 become law.

The Path Forward

The path to an ESA school choice program that many current homeschool and private school families might support is straight forward; fund it with tax credits. Any parents with child age children would be eligible for a property tax credit, whether they are homeowners or renters. If they use an ESA, they might also be exempt from sales taxes. Additionally, businesses might receive property tax or franchise tax credits if they contribute to students’ ESA accounts; they might set up funding for students at particular schools or those who are studying particular subjects.

Since in a tax credit system the money never belongs to the government, this approach creates more competition for government schools that would have to respond to children leaving and taking their tax dollars with them. It also removes the problem of regulations coming with government funding and would also leave it to the parents to decide how to best use their accounts to educate their children. Finally, the efficiencies forced on the system would likely reduce the cost of public education in Texas.

All said, HB 3 and its companion HB 2 are more aligned with the interests of the state and those who benefit from receiving taxpayer funds that with the Texans who pay the taxes and the many who pay twice for education—once for government schools and again for their own children. I’ve been working to get school choice in Texas since 1997. And while I do not want to delay much longer, it would be worth it to wait until 2027 if that is what it takes to get it right.