The New Economic Development Programme: School Choice

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Spend some time near a state capital and you will hear the phrase “economic development” about once every 10 minutes. This makes sense. Any program that politicians want to set up must be financed by taxes. Taxes are paid as a result of economic activity. More economic activity, more taxes. More taxes, more programs. More programs, happier politicians.

Aside from the thorny issues of politicians’ management of those tax dollars, economic development is good for just about everyone else. Strong communities are built on a foundation of economic activity, and good jobs can draw 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, Kansas City, is on the Missouri-Kansas border. For decades, politicians on both sides of the state line have looted businesses from the other side with tax incentive deals and other forms of corporate welfare whose costs were obvious and whose benefits were often illusory. Even if there were benefits, they were almost immediately nullified by the politicians on the other side of the state line doing the same for someone else.

What better way to attract businesses and the jobs they create? Politicians need to think about school choice.

Imagine this pitch:

If you locate your business in our state, your employees can choose from a wide variety of public and private schools. We even have a program that allows you to deposit your child’s student grants into a flexible use account that you can spend on hundreds of eligible providers. (Yes, that indeed sounds a lot like the health savings account you offer your employees as part of an attractive salary package.) But it’s not all. We have a thriving network of microschools, small schools that offer a level of personalization and community that is nearly impossible in a large school. We have some great charter schools that focus on everything from STEM to classical education. We are open to and have a vibrant homeschooling community. And our public school system has an open enrollment program that allows your child to attend any nearby public school, even if you don’t live in that school’s attendance zone.

Compare that to other alternatives:

We’d love for you to establish your headquarters here, but your employees will likely want to relocate to live within the confines of the top-performing school district. Yes, house prices are 25% higher than everywhere else and you trying to move there will only drive that higher, but that’s the only way to get into those schools. You can always pay them more (nervous laughter).

Or

We’d love to see you set up your offices here, but the local district only has a few magnet schools and puts a limit on the number of charter schools, so they’re already oversubscribed and your employees will have to take a chance on the lottery. If they lose, they may want to move to one of the better performing districts, but that could mean a 30-45 minute commute to the office. And there are always the private schools (nervous laughter).

Or

Yes, we are aware that the other states you are considering relocating your headquarters to have robust school choice policies that provide many education options for families. We keep trying to get it hired in our state, but we’ve got some powerful teacher unions here, and, well, you know how that goes. Maybe if you move here you can help us lobby for them (nervous laughter)!

If I was mayor or governor, I think I’d rather make the first roll than any of the others. Oh, and by the way, these programs are popular and the private school elective programs save money. What else is there to want?

Bartley Danielson, a professor of business administration at North Carolina State University, has monitored the impact of school choice on economic development, stating, “in the areas where there are no restrictions for families to participate [in school choice programs], we see those areas becoming more coveted and bringing greater economic vitality to those communities.” That should not surprise us.

As companies adapt to a post-COVID economy and change the calculation of where they want to operate to account for everything from housing markets to tax rates to the weather, it must become increasingly important to think about the educational options their employees would have.

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

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