Accountability Education Reform Funding Hoax Lies North Carolina Republicans School Choice Segregation Shame Vouchers

North Carolina: Privatizers Raid Public Funds for Religious Schools

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The Republicans who control the North Carolina legislature want to divert public funds to religious and private schools. This outright theft of public funds is cynically called a bill for “equity and opportunity,” although it will increase racial segregation, undermine equity, and subsidize students to attend schools of lesser quality than public schools.

At what point do these thieves of public money reveal their true motives and stop stealing the egalitarian language of public education? There is nothing egalitarian about their scheme to take money from public schools and transfer it to low-quality religious schools. Some of these schools will use racist textbooks. Some will exclude students whose parents are gay. Some will be attached to churches that teach snake-handling. Few will have certified teachers or meet any state standards. North Carolina Republicans don’t care about the future of their state. They prefer to subsidize low-quality schools instead of improving their public schools.

Kris Nordstrom of NC Policy Watch wrote this description of the legislation. It was shared with me by Public Schools First North Carolina:

HB32 would make five changes to the Opportunity Scholarship program:

1.     No prior public school enrollment requirement for entering second graders: Under current law, first-time voucher recipients had to previously been enrolled in a public school unless they are entering kindergarten or first grade. Under H32, applicants entering second grade would not have to have been previously enrolled in a public school. As a result, more vouchers will be provided to students who were already enrolled in a private school.

2.     Increase value of the voucher: Since its inception in FY 2014-15, the Opportunity Scholarship voucher has been capped at $4,200. Under HB32, the maximum voucher amount would be set to “70 percent of the average State per pupil allocation in the prior fiscal year.” The average state per pupil allocation is currently $6,586, implying a maximum voucher of more than $4,610 if, as proposed, this goes into effect for vouchers awarded in the 2022-23 school year. The maximum voucher value would then be bumped up to 80% of the average State per pupil allocation in the 2023-24 school year and beyond. This would permit vouchers of up to $5,269, given current state spending levels.

3.     Loosening of prior public school enrollment requirement in grades 3-12: HB32 would allow students entering grades 3-12 to also be eligible for a voucher even if they’re already enrolled in a private school, so long as they were in a public school in the preceding semester. For example, if a student started their school year in a public school, but transferred to a private school for the spring semester, they would still be eligible for a voucher in the subsequent school year. This change would first apply to vouchers awarded in the 2022-23 school year.

4.     Diversion of funds to marketing efforts: Since inception, the Opportunity Scholarship program has been overfunded. HB32 would divert $500,000 worth of unused funds to “a nonprofit corporation representing parents and families” to market the program in an effort to juice up demand. There are few (if any) organizations that would qualify for these funds beyond Parents for Educational Freedom in North Carolina. It is probably just a coincidence that PEFNC provided HB32 sponsor Rep. Hugh Blackwell with an all-expenses paid trip to Miami in 2012.

5.     Increase of administration funding. Under current law, the NC State Education Assistance Authority  may retain $1.5 million for administrating the Opportunity Scholarship program. Under HB32, they would be allowed to use up to 2.5% of appropriated funds. That equates to $2.1 million for FY 2021-22, rising to $3.6 million by FY 2027-28.

The bill also amends the state’s two other voucher programs: the Disabilities Grant voucher and Personal Education Savings Accounts vouchers.

The Disabilities Grant is a traditional voucher covering up to $8,000 per year for students with disabilities. Funds can be used for school tuition, as well as for related expenses such as therapy, tutoring and educational technology.

Under the Personal Education Savings Accounts, parents of qualifying children receive a debit card loaded with $9,000 to be spent on a wide range of education-related expenses.

HB32 makes the following changes:

1.     Merges the two programs and changes the name. The combined program would be called Personal Education Student Accounts.

2.     Expands eligibility. Currently, students must have an Individualized Education Plan (IEP) to qualify for either program. Under HB32, eligibility would also be extended to students with 504 plans, which broadens the allowable disabilities. Students would also be eligible even if they are already enrolled in college, so long as they are taking less than 12 credits per year.

3.     Different awards and carry-forward rules. If a student is affected by autism, hearing impairment, moderate or severe intellectual or developmental disability, multiple, permanent orthopedic impairments, or visual impairment, they qualify for a higher award amount and may carry-forward up to $4,500 of unspent funds to the next fiscal year. These students will get $17,000 on their debit cards. Other disabled students’ awards are based on a percentage of per-student funding provided in the prior year. Based on 2020-21 funding levels, the award would be $9,549. These students would not be permitted to carry forward unspent funds.

4.     Eligibility verification relaxed. Currently the State Education Assistance Authority is required to verify eligibility of 6% of applicants each year. That requirement would be removed under HB32.

5.     Additional skimming of funds by financial companies. HB32 would permit the charging of “transaction or merchant fees” of up to 2.5% of all spending.

6.     Forward-funds the program and creates guaranteed funding increases through FY 2031-32. Under HB32, appropriations for Personal Education Savings Accounts would be made to a reserve account to forward-fund vouchers in the subsequent fiscal year. Additionally, funding would increase $1 million annually through FY 2031-32, increasing total funding by 62%. Voucher programs are the only education programs with guaranteed funding increases beyond FY 2021-22.

Finally, the bill would permit county governments to contribute to either of the voucher programs. Counties would be able to appropriate up to $1,000 per every child in the county who receives a voucher and attends a private school in the county. These funds would be used to increase the size of student vouchers rather than increase the number of vouchers awarded.

Fiscal impact of Opportunity Scholarship changes

If HB32 becomes law, it would be the second consecutive year of rapid expansion of the Opportunity Scholarship program to divert additional state funding to students who were already planning to go to a private school. During the 2020 legislative session, the General Assembly expanded the program’s income eligibility requirements and removed limits on awards to students entering Kindergarten and first grade. These changes are expected to cost the state approximately $272 million over the next 10 years.

The changes proposed under H3B2 would add $159 million to these costs over the next nine years.

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