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ESA applicant income disparity not what it seems

Households from higher-income ZIP codes are applying for Nevada’s new Education Savings Accounts in greater numbers than families in low-income ZIP codes.

Which makes perfect sense at this point — but not for the reasons you might think.

In a story in today’s print edition of the Review-Journal (first published at reviewjournal.com late Thursday), Neal Morton and Adelaide Chen break down the roughly 3,100 applications for the state’s groundbreaking, nearly universal school choice initiative by ZIP code and household income.

It’s an important analysis because ESAs were structured to help all Nevadans exercise school choice, and the public needs to know how the program is working. Proponents of ESAs asserted during the 2015 Legislature that the program, far from being a private school subsidy for the rich, would help middle- and lower-income students escape chronically underperforming public schools. ESA opponents countered that the program primarily would benefit upper-middle to upper-class families because, unlike lower-income households, wealthier parents have the discretionary income to cover whatever private school costs ESAs can’t meet.

Morton and Chen found that early enrollment in ESAs is tilting more toward wealthier parts of town than poor neighborhoods. Half of the applications list an address in a ZIP code with a median household income among state’s top 40 percent of earners. Meanwhile, 10.7 percent of applications are from households with median incomes in the bottom 40 percent of earners.

ESA opponents pounced on the findings as a told-you-so lesson that ESAs, which allow parents to withdraw their children from public school and gain control of the roughly $5,000 in annual state funding that supported their enrollment, don’t benefit the middle and lower classes.

“It’s what we expected,” said Sylvia Lazos, policy director for Educate Nevada Now, an organization behind one of two lawsuits that seek to quash ESAs. “With every program of this nature, it’s just the reality that affluent and high-middle-income families are always in the best position to take advantage.”

The affluent and high-middle-income families are indeed in the best position to take advantage of ESAs — for right now. But that’s going to change in a few months.

As of today, not a single dollar has moved from the state treasury into an ESA. Final regulations won’t be approved until later this month. And the first distributions aren’t expected to be made until February at the soonest and April at the latest. A higher-income household is more likely to be able to afford to remove a child from public school now and immediately enroll in private school, distance learning or an alternative education program, then wait until late winter or spring for ESA subsidies to help pay the bill. A lower-income household is less likely to be able to afford any alternative educational program without an immediate subsidy.

Thousands of families are waiting until they can collect an immediate ESA distribution before applying for an account and exiting public schools. ESA enrollment will surge across the socioeconomic spectrum in the late spring and summer, once funds can be quickly obtained.

Regardless, a deeper dive into the early enrollment numbers shows already strong middle- to lower-class participation. The Review-Journal analysis found a majority of applicants have a household income of $64,908 or less. In a state with a median household income of slightly more than $51,000, that’s not rich by any definition. And 21 percent of ESA applicants reported earning less than 185 percent of the federal poverty level, qualifying them for a higher ESA subsidy. Those are amazing numbers.

It’s funny how ESA foes will argue that costly new public school initiatives need time to work. Expanded English Language Learner and early education programs in urban schools will be given years and years to show gains. But if ESAs aren’t delivering quite as advertised in their first months of existence? Kill them!

Nevadans need school choice. And school choice needs a chance.

— Glenn Cook (gcook@reviewjournal.com) is the Las Vegas Review-Journal’s senior editorial writer. Follow him on Twitter: @Glenn_CookNV. Listen to him Mondays at 10 a.m. on “Live and Local — Now!” with Kevin Wall on KBET 790 AM.

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