Let parents pay the piper and
let them call the tune:
A new funding model for
K-12 education
Presented by
Peter Cowley
Director of School Performance Studies
THE FRASER INSTITUTE
July 12, 2010
Above all, what is the
benefit that accrues to the kids?
___________________________________________
• Whenever a change in education policy is
suggested, this question must be asked.
• So, as we deliberate on the question of
funding policy and how it might be
improved, we cannot forget that the
changes we might consider should have
demonstrable benefits to Canadian
students.
If the government would make up its mind to
require for every child a good education, it
might save itself the trouble of providing
one. It might leave to parents to obtain the
education where and how they pleased,
and content itself with helping to pay the
school fees of the poorer classes of
children, and defraying the entire school
expenses of those who have no one else
to pay for them.
John Stuart Mill, On Liberty, 1859
A) Analysis of status quo
The role of government
in Canadian K-12 education
__________________________________________
Canadian provincial governments
discharge their constitutional
responsibility for K-12 education through
action in these three functions:
Regulation
Operation
Funding
General status quo
model
__________________________________________
• While there are differences in the details,
the general funding model in all provinces
is that education programs provided in
government-run schools are paid by
government tax revenue.
• Education programs from providers other
other than government-run schools may or
may not be partially paid for by
government tax-revenue.
But why?
Because the current
funding model is driven by the
concept of “universal access” to
government-operated education
programs
____________________________________________
The provinces offer education programs in
government-run schools to children of
school-age at no direct cost to parents
regardless of the parents’ ability to pay.
But these same
governments see no need for
similarly funded universal access
to a child’s other basic necessities
___________________________________________________________
Governments do not provide children with
“free” food, clothing, or shelter unless their
parents or caregivers are either unable or
unwilling to do so.
Because this same funding
model assumes that education is a
“public good” and must therefore be
subsidized through taxation
________________________________________________________
While education is not a true public good in
the economic sense, the assumption is
that without government funding, families
would “under-invest” in their children’s
education, thereby reducing the size of the
social benefit produced.
But these same
governments ensure that underinvestment will not occur by
mandating education for schoolaged children
______________________________________________
Just like auto insurance, education of
children is generally required by law. But
auto insurance is not normally funded by
tax dollars as is K-12 education.
The current funding
model may be intended
to ameliorate the large intergenerational transfer associated
with education
_____________________________________________
Indeed, affordability to young families
is an important consideration in
education funding and must be
considered in any proposed policy.
Summary of rationale
for status quo
___________________________________________
The usual rationales for the existing system
are not strongly supported in principle.
However, any proposal would have to take
into account the provision of education to
children whose family cannot or will not
pay the cost.
B) Impediments to
educational improvement
embedded in the status
quo
Impediment 1
________________________________________
The current K-12 funding
model does not provide a strong incentive
for parents to seek the best available
education for their children.
The current funding
model imposes little or no direct
cost on parents
__________________________________________
As parents see the government-run school
as a “no cost” supplier, they may be
inclined to be less assertive than they
might otherwise be in their role as
advocates for improvement.
Impediment 2
____________________________________
The current K-12 funding model does not
provide a strong incentive for education
providers to bring the benefits of
entrepreneurship and innovation to bear
for the benefit of Canada’s children.
The current funding
model discriminates among
education suppliers
________________________________________
In every province, home-based education,
self-employed teachers, and independent
schools are either not subsidized or are
subsidized to a lesser degree than are
government-run schools.
C) Proposed solution
A solution:
___________________________________________
If the government would make up its mind to
require for every child a good education, it
might save itself the trouble of providing
one. It might leave to parents to obtain the
education where and how they pleased,
and content itself with helping to pay the
school fees of the poorer classes of
children, and defraying the entire school
expenses of those who have no one else
to pay for them.
John Stuart Mill, On Liberty, 1859
Solution Part 1:
Parent contribution
__________________________________________
Given that education is a component of
raising a child just as is feeding the child
and that the benefit of the education
accrues largely to the child, parents should
be responsible for a reasonable portion of
the cost of educating the child.
Governments might set a cost of education
by province or school district and the
parent would be responsible for one-third
of the amount, the balance to be paid to
the education provider by the government
from general tax revenues.
Solution Part 2
Tax-payer funded
contribution
___________________________________________
Given that the interest of society is that
every child receive a good education the
tax-payer funded contribution of two-thirds
of the established amount should be
provided to any education provider—
government-run or privately run by not-forprofit or for-profit organizations or by
individual teachers or families engaged in
home schooling.
Solution Part 3
Support for low-income families
__________________________________________
In order to ensure “universal access” to a
good education, we could easily enough
adopt Mill’s prescription to ensure that no
child is deprived of a good education
because his or her parents cannot afford
the fees.
And, in the end, how does
this help the kids?
__________________________________________
The funding system proposed will offer parents a
greater stake in the success of the school
precisely because they are making a financial
commitment to it. This greater commitment will
translate into a closer association between
home and school that can only benefit the kids.
By encouraging competition through nondiscriminatory funding, all schools will be
encouraged to improve their quality so that their
enrollment will grow or, at least, stabilize.
Improved quality benefits the kids directly.
Thank you for your kind attention