The New Economic Development Program: School Choice

Spend any time around a state capitol and you’ll hear the phrase “economic development” about once every 10 minutes. It’s logic. Every program that politicians want to institute must be funded by taxes. Taxes are paid because of economic activity. More economic activity, more taxes. More taxes, more programs. More programs, happier politicians.

Aside from the thorny issues surrounding politicians’ handling of taxpayers’ money, economic development also benefits almost everyone. Strong communities are built on a foundation of economic activity, and good jobs can attract people to a city, state, or even country.

Politicians are constantly looking for new programs to promote economic development. They often make terrible decisions in this quest.

My hometown of Kansas City straddles the Missouri-Kansas border. For decades, politicians on either side of the state line poached businesses on the other side with tax incentive deals and other forms of corporate welfare whose costs were clear and whose the benefits were often illusory. Even though there were benefits, they were almost immediately nullified by politicians across the state line doing the same for someone else.

Is there a better way to try to attract businesses and the jobs they create? Politicians should consider school choice.

Imagine this pitch:

If you locate your business in our state, your employees will be able to choose from a wide variety of public and private schools. In fact, we have a program that lets you put your child’s education funding into a flexible-use spending account that you can spend with hundreds of eligible providers. (Why yes, it’s a lot like the health savings account you offer your employees as part of an attractive salary package.) But it’s not just that. We have a thriving network of microschools, small schools that offer a level of personalization and community almost impossible at a large school. We have amazing charter schools that focus on everything from STEM to classical education. We are open and have a vibrant home schooling community. And, our public school system has an open enrollment program that allows your child to attend any public school in the area, even if you don’t live in that school’s attendance zone.

Compare this to other alternatives:

We’d love for you to locate your headquarters here, but your employees will likely want to relocate to live within the borders of the top-performing school district. Yes, property prices are 25% higher than anywhere else and any of you who try to move there will only go up, but that’s the only way to get into these schools. You can always pay them more (nervous laughter).

Or

We’d love for you to set up your offices here, but the local district only has a few magnet schools and limits the number of charter schools, so they’re already oversubscribed and your employees will have to try their luck in the lottery. If they lose, they might want to move to one of the better performing neighborhoods, but that might mean a 30-45 minute drive to the office. And there are always the private schools (nervous laughter).

Or

Yes, we realize that other states you are considering moving your headquarters to have strong school choice policies that provide families with many schooling options. We keep trying to get them adopted in our state, but we have powerful teachers’ unions here, and, well, you know how it goes. Maybe if you move here, you can help us lobby for them (nervous laughter)!

If I were mayor or governor, I think I would rather take the first step than any of the others. Oh, and by the way, these programs are popular, and private school choice programs save money. What else is there to want?

Bartley Danielson, a professor at the North Carolina State University School of Business, has tracked the impact of school choice on economic development and says that “in areas where there is no no restrictions on family participation [in school choice programs], we see that these areas are becoming more coveted and bringing more economic vitality to these communities. This should not surprise us.

As businesses adapt to a post-COVID economy and change the calculus of where they want to operate to take into account everything from housing markets to tax rates to weather, thinking about the educational options that their employees would have should become increasingly important.

As politicians consider the opportunity presented by large employers moving from less desirable locations, they should think about using school choice as a magnet to attract business to their state.

Ryan H. Bowman