Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 162
While economically comfortable families may be able to afford educational
opportunities hitherto beyond their means under a voucher program, it will be argued that
public resources should be devoted to equalizing educational opportunities for all
families, irrespective of means. It may be possible to design educational vouchers in the
form of a refundable tax credit that phases out above some income level, but this would
mean that wealthier families who are content to send their children to schools that do not
extra-bill would also be denied any benefit from the voucher. This would amount to
means-testing all voucher recipients and perhaps create additional incentives for
wealthier families to opt out of the publicly financed school system altogether and in so
doing undermine some of the values embodied in the citizenship model of education, as
well as perhaps attenuating the effectiveness of political voice in maintaining the value of
voucher entitlements. One solution to this problem would be to require all schools to
make a discontinuous election into or out of the voucher system with the former schools
accepting a no-extra-billing constraint 164 (in effect, a 100 percent tax on the voucher for
parents electing the latter option).
Even if we do not allow extra billing, one might still allow individuals to pay for an
education more to their liking entirely at their own cost (as we do at present). If we do
this, diversity and civic virtue considerations will be compromised to some extent.
However, if we ensure that these individuals continue to pay their fair share of the cost of
the publicly financed system, it does not undermine and may actually enhance our ability
to provide quality education to the rest of the society. We should keep in mind that it is
always, de facto, an option for those with sufficient means to go to a jurisdiction where
private education is available.
An interesting proposal by Sherry Glied 165 in the context of health care in the United
States might be adapted to extra billing in the primary and secondary school voucher
context. If we choose to allow extra billing or “topping up,” then we are apt to raise
concerns that the education afforded by a bare voucher will be substandard and that a
multi-tier education system may emerge. However, if we tax the “topping up” portion of
tuition fees at a significant rate, say 30 percent, and earmark the funds raised for publicly
financed education, then for every dollar paid over and above the voucher face value by
those who wish to improve the education provided to their children will lead to improved
benefits for the relatively worse off. Exit from a voucher scheme is best seen as being on
a continuum where marginal exit is represented by a small “topping up” payment, and
complete exit is represented by, for example, sending one’s child to a boarding school in
another country, where presumably any domestic voucher would be worthless. If we
force those who would like to exit the system to pay a proportion of their exit
expenditures to those who remain in the system, we can capture their dissatisfaction in
explicit tangible monetary terms as an alternative to benefiting directly from their
political “voice.” For example, rapidly expanding revenue from such a tax would indicate
that the value of the basic voucher entitlement should be expanded (and the revenue
collected would provide the means to do so). In addition, with the very introduction of
this proposal on the political agenda we might capture the voice of those who would
prefer to exit the system because, as with the imposition of any tax, there is likely to be
intense debate about the amount of tax levied upon extra billing and a recurrent discourse
about the face value of the basic voucher.