Despite Problems, Mississippi Education Savings Accounts Show Promise

An innovative new education law in Mississippi expands school choice options for parents of special-needs students.

After protests arose because the initial rollout of the law placed onerous burdens on parents who applied, the Mississippi Department of Education (MDOE) relaxed the restrictions, and the law is now showing great promise.

Senate Bill 2695 set up a five-year pilot program for up to 500 parents per year in Mississippi to apply for educational savings accounts (ESAs) in order to customize the education of their special-needs children. The ESA legislation passed into law in April. Funding for each ESA can amount to up to $6,500. Parents can use ESA funding for a wide variety of services, including private school tuition, tutoring, and advanced therapy.

Early in June, as the July 1 launch approached, MDOE received criticism for the burdens it placed on parents applying for the program.

Empower Mississippi, a free-market think tank, issued a strong statement criticizing the rollout of the program. The criticisms included a very short application window over summer vacation, the inability to view application documents prior to the opening of the application window, and limited ways to send in applications.

Fixing the Problems

It appears officials addressed many of these problems, according to Empower Mississippi. Empower Mississippi President Grant Callen says MDOE has increased the application window and posted the application online.

“This is a great improvement from the initial 10-day application window, which would have limited access to these scholarships,” said Callen. “They’re now saying that once the enrollment has reached 50 percent of the available ESAs, all approved applications will be placed on a waiting list and MDOE will determine a deadline for a random selection process for the remaining scholarships.”

Callen lauded the innovative nature of this new law.

“This law represents a dramatic leap forward in the way we educate students with special needs, and more broadly, the way we think about public education in Mississippi,” said Callen. “In this age of innovation and personalization, why not allow parents the freedom to customize an education that they determine is right for their child? We’ve talked in America since the time of Thomas Jefferson about education funding, but very little about education delivery. This law will provide the proper incentives for achieving desired outcomes for students with special needs.”

Advancing Education Freedom

Jason Bedrick, a policy analyst for the Center for Educational Freedom at the Cato Institute, says this ESA program represents a great advance in education freedom.

“ESAs empower families to completely customize their child’s education,” said Bedrick. “This is particularly important for families that have students with special needs. Sometimes, a student’s assigned district school is unable to meet his or her needs, so the ESA enables his or her parents to seek out alternatives. In Arizona, a 2013 survey found that parents of students with special needs were unanimously satisfied with the education they were able to purchase for their children with an ESA.”

Bedrick says this model is the future of education in Mississippi and other states.

“In Arizona, the ESA program was originally limited to students with special needs, as in Mississippi,” said Bedrick. “However, the legislature has subsequently expanded program eligibility several times. It now also includes students assigned to district schools with a ‘D’ or  ‘F’ letter grade according to the state accountability system; children of active-duty military members; youth adopted from the state’s foster care system; and students living on Native American reservations. I expect that we will see states such as Mississippi, Florida, and Tennessee expand their eligibility criteria over time as well.”

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Number of Homeschoolers Increases Nationally

Parents choosing to home school their kids remain part of a growing movement across the country. According to a recent report in the National Catholic Register, the number of families now practicing some type of home education grew by 62 percent between 2003 and 2012. The report cites U.S. Department of Education statistics, highlighting the swell of homeschoolers as well as their reasons for seeking an alternative to traditional schools.

Parents are choosing this course of action based on a variety of motives, which also look different today from years past. Fewer today choose home schooling for religious reasons, while more feel the quality of their child’s education will be better because of home schooling as compared to traditional schooling, according to the report.

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State's Largest Teachers Union Fails to Disclose 30 Percent of Its Income

The Michigan Education Association, the state's largest teachers union, routinely submits financially reports to the federal government, as it is legally required. But the reports can leave outsiders wondering about the source of the roughly 30 percent of its income that is categorized under the heading of “All Other Receipts.”

That’s the only description the Michigan Education Association provides to account for more than $30 million of its annual income. Specifically, on its 2014 LM-2 disclosure form, the MEA reported over $38 million in receipts from unspecified sources under the "All Other Receipts” heading.

“This is something that isn’t commonly seen on a union disclosure report," said Nathan Paul Mehrens, president of the Americans for Limited Government Foundation. "It begs the question: Where did this money come from?”

Mehrens served in the U.S. Department of Labor under George W. Bush, where his job included designing union disclosure forms. “The LM-2 disclosure form, like most balance sheets, has various line items, such as ‘dues and fees,’ that describe the sources of the funds,” he said.

According to Mehrens, the mystery revenue raises several questions. "This line is for sources that don’t fit into any of the specified descriptions," he said. "However, a union is allowed to report money it received in the ‘All Other Receipts’ category only if it received the money in individual amounts of less than $5,000.”

“In order to reach $38 million with payments that fall below the $5,000 threshold, the sheer volume involved seems problematic,” Mehrens continued. “Even if we assume that the $38 million MEA listed under ‘All Other Receipts’ came in amounts of $4,999, that would represent 7,667 transactions.”

During February 2014 testimony before Julia C. Stern, an administrative law judge who was hearing a labor case involving members quitting the union, MEA Executive Director Gretchen Dziadosz was asked about the $33 million that MEA reported on its 2013 report under "All Other Receipts."

“I didn’t prepare on this, I couldn’t tell you without my accounting staff,” said Dziadosz, whose name appears on the LM-2 forms as the union's contact. “They are the ones who helped prepare this. I do not have personal knowledge of that.”

Michigan Capitol Confidential left a telephone voice message for MEA spokeswoman Nancy Knight requesting comment on the funds. So far, the call has not been returned.

The mystery money may be related to the union’s health insurance division, the Michigan Education Special Services Association, which long ago was described as the money machine that subsidizes the union's other work, including political activism. MESSA administers school employee health insurance benefits underwritten by Blue Cross Blue Shield.

Mehrens was asked if MESSA could be the source of the $30 million-plus figures MEA reports as “All Other Receipts.”

“That’s a possibility,” he said. “But back in 1959 when these disclosure regulations were put in place, the report of the committee that originally passed them said their purpose was to allow union members a full accounting of their union’s financial transactions.”

“At the very least, MEA should provide something that reveals the source of these millions of dollars,” Mehrens added. “With any reporting system there are weaknesses, but based on what I’ve seen, the way this union is reporting contradicts the whole notion of financial disclosure. Union members are entitled to a full accounting of MEA’s transactions.”

By contrast, other unions typically report less than one percent of their annual incomes on the “All Other Receipts” line. The United Auto Workers reported approximately $1.1 million, or less than 0.5 percent of its total income of $219 million. The Service Employees International Union reported less than $200,000, while its total income was $321 million. The Teamsters reported just over $291,000, with roughly $182 million in total income. The National Education Association, the parent organization of the MEA, reported approximately $421,000 in "All Other Receipts," with over $385 million in total income.

The MEA had the highest total receipts of all NEA state affiliates that filed LM-2s, with the Pennsylvania NEA affiliate finishing second. It had nearly $95 million in total receipts, and just over $630,000 for other receipts.

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