When Public Money Becomes Private

When justice and accountability are sidelined in the name of profit, everyone loses

Since the 1980s, the push to privatize public services has been touted by both liberals and conservatives as a way to address issues with everything from garbage collection to schools and child care.

The fight isn’t a new one. But this year, in states like New Jersey, Oregon, New Hampshire Iowa, Missouri, Utah, and Texas, the move to push voucher programs has gained new momentum. Last year, the Supreme Court issued a ruling allowing public money to be spent on private school tuition. This, combined with backlash over pandemic school shutdowns and mask mandates, has energized the far right to shift money from public to private schools.

Yesterday, Iowa Gov. Kim Reynolds signed into law a sweeping voucher program that is estimated to cost $345 million annually once fully implemented. The program will create “educational savings accounts,” which conservatives sometimes call “scholarships,” that offer over $7,000 per child for parents to spend on the school of their choice. 

Supporters argue that it will put public money back into the hands of the public. But this rebranded voucher program will redirect public money to private schools without any oversight or restrictions. As Iowa State Auditor Rob Sand pointed out, “...this bill provides no rules for how private [schools] use these funds. After a private school gets public dollars as tuition, they could buy a teacher or teachers brand new Ford Mustang convertibles in the name of incentive pay. The public may not find out at all, and if they did, there may be no recourse for taxpayers.”

And Sand’s warnings aren’t just conjecture. A similar program in Arizona has been plagued with abuse by parents, who have spent the ESA money on beauty products, clothes, and cash withdrawals. 

The money comes with no requirements for private schools to follow federal law protecting students' rights. A 2018 legal analysis of voucher programs published in the American University Law Review concluded, “By giving up these protections, children with disabilities are left at the mercy of private schools that have no legal obligation to provide them with an appropriate education, and, in the vast majority of cases, are not legally prohibited from discriminating against them on the basis of their disability.”

Consider the track record of some private schools in states that are considering similar programs. This year, a Baptist-run school for troubled boys in Stockton, Mo., is closing after allegations of rampant abuse. In Iowa, the director of a private school was sentenced to nine years in prison for assault with intent to commit sexual abuse, sexual exploitation of a child by a counselor, and child endangerment.

In a 2018 article tracing the history of school privatization in America, author Joanne Barkan describes voucher programs as state-funded scam. “Funds pass through a private entity and arrive at a religious school scrubbed clean of their taxpayer origin,” Barkan writes. “Education spending accounts,” she notes, “give families government-funded debit cards to use for various private education expenses in addition to tuition.”

Free-market cheerleaders argue that “school choice” will mean the elimination of bad schools, or the incentive for them to get better. There is a problem with public education in America. But the problem isn’t that public schools aren’t trying hard enough. The problem is that they have been cut off at the knees and asked to stand up taller. 

In a 2017 essay on the history of public schools, New York Times columnist and Pulitzer Prize winner Nikole Hannah Jones writes of the Detroit voucher plan, “Even when they fail, the guiding values of public institutions, of the public good, are equality and justice. The guiding value of the free market is profit. The for-profit charters [then-Education Secretary Betsy] DeVos helped expand have not provided an appreciably better education for Detroit’s children, yet they’ve continued to expand because they are profitable…”

The reality of the free-market system is that people without means will take what they can get. You give an ESA to a hungry family that has had their SNAP benefits cut  — perhaps in a rural district with no private schools anyway — ? and what do you expect them to do with the money?

The move to privatize formerly public services gained traction in the 1980s under Regan-era conservatism, which sought to shrink the size of the government. Since then, governments all over the world have stepped away from the energy industry, prisons, health care and more.. In 1991, Harvard Business Review published a comprehensive analysis of the privatization trend. The article is balanced, perhaps even in favor of privatization. But it was interesting to research some of the success stories they touted, such as Chicago’s trash program, only to find that the program was rife with corruption. Even a later effort by Rahm Emmanuel to privatize Chicago’s recycling was poorly run and shady. Years of outcomes have shown that private companies will always put profit above lesser concerns such as  justice and accessibility.

While public services are not always well run, they do have a legal obligation to provide transparency and to follow the Equal Protection Clause. Private entities have no such mandates.

In an analysis of the privatization of public services, Princeton University Professor of Sociology and Public Affairs Paul Starr argues that privatization is not always the best way to run public services, writing, “ ‘Best’ cannot mean only the cheapest or most efficient, for a reasonable appraisal of alternatives needs to weigh concerns of justice, security, and citizenship.”

Private schools have long been a way for parents to dodge issues of equality. In 1958, private school enrollment in the American South dramatically increased when schools were desegregated. Additionally, a 2009 study shows a correlation between homeschooling and school integration. Vouchers and ESAs are state-funded white flight.

When the public becomes private, it is the most vulnerable who suffer. When the public becomes private, the inequality gap grows. When the public becomes private, discrimination becomes legal.

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Further Reading:

Garrett Bucks argues that public schools have never been given the chance to succeed. Nikole Hannah Jones has written frequently about public schools in her essays, “Have We Lost Sight of the Promise of Public Schools?”,  “It Was Never About Busing”, and “The Resegregation of Jefferson County.”