Cashing in on Kids: Corporate Lobbying Powerhouse ALEC Pushed 172 School Privatization Bills Last Year

Despite widespread public opposition to the corporate-driven education privatization agenda, at least 172 measures reflecting American Legislative Exchange Council (ALEC) model bills were introduced in 42 states in 2015, according to an analysis by the Center for Media and Democracy, publishers of ALECexposed.org and PRWatch.org. (A PDF version of this report may be downloaded here.)

One of ALEC's biggest funders is Koch Industries and the Koch brothers' fortune. The Kochs have had a seat at the table — where the private sector votes as equals with legislators — on ALEC's education task force via their "grassroots" group Americans for Prosperity and their Freedom Partners group, which was described as the Kochs' "secret bank."

The Kochs also have a voice on ALEC's Education Task Force through multiple state-based think tanks of the State Policy Network, ALEC's sister organization, which is funded by many of the same corporations and foundations and donor entities.

ALEC's Education Task Force is also funded by the billionaire DeVos family, which bankrolls a privatization operation called "American Federation of Children," and by for-profit corporations like K12 Inc., which was founded by junk-bond king Michael Milliken.

ALEC's education task force has pushed legislation for decades to privatize public schools, weaken teacher's unions, and lower teaching standards.

ALEC's agenda would transform public education from a public and accountable institution that serves the public into one that serves private, for-profit interests. ALEC model bills divert taxpayer money from public to private schools through a variety of "voucher" and "tuition tax credit" programs. They promote unaccountable charter schools and shift power away from democratically elected local school boards.

Until recently, ALEC boasted on the "history" section of its website that it first started promoting "such 'radical' ideas as a [educational] voucher system" in 1983, taking up ideas first articulated decades earlier by ALEC ally, Milton Friedman, who was an economist with the University of Chicago.

Although ALEC and other school privatizers today frame "vouchers" — taxpayer-funded tuition for private, and often religious, schools — in terms of "opportunity" for low-income students and giving parents the "choice" to send their children to public or private schools, the group was less judicious in its earlier years.

The commentary to ALEC's original 1984 voucher bill states that its purpose is "to introduce normal market forces" into education, and to "dismantle the control and power of" teachers' unions by directing money from public institutions to private ones that were less likely to be unionized.

Friedman was more explicit when addressing ALEC's 2006 meeting. He explained that vouchers are really a step towards "abolishing the public school system."

"How do we get from where we are to where we want to be?" Friedman asked the ALEC crowd.

"Of course, the ideal way would be to abolish the public school system and eliminate all the taxes that pay for it. Then parents would have enough money to pay for private schools, but you're not gonna do that."

Instead, Friedman said, the politically feasible way of moving towards an entirely private educational system is through vouchers:

So you have to ask, what are politically feasible ways of solving the problem. The answer, in my opinion, is choice, that you have to change the way government money is directed. Instead of it being used to finance schools and buildings, you should decide how much money you are willing to spend on each child and give that money, provide that money in the form of a voucher to the parents of the children so the parents can choose a school that they regard as best for their child.

Thanks to the work of the Koch-funded ALEC, David Koch's Americans for Prosperity, and the DeVos-funded American Federation for Children, thirteen states and the District of Columbia have adopted a basic voucher scheme.

Many voters are repelled by the idea of taxpayer dollars flowing to private or religious entities. 70 percent of Americans oppose funneling taxpayer money to private schools via vouchers.

Even traditionally conservative groups like the Farmers Union worry that a statewide voucher program will harm rural schools as public funds have been siphoned off to private operators. Promises of improved educational outcomes and closing achievement gaps have largely failed to materialize in cities such as Milwaukee.

So, ALEC has cooked up a variety of means of gaining ground on school privatization, many of which moved through state legislatures in 2015.

A handful of ALEC bills claim to offer "scholarships" for sympathetic populations — like students with disabilities or foster kids — but are actually targeted voucher programs that act as the proverbial "camel's nose under the tent" to advance a privatization agenda.

One ALEC bill, the Special Needs Scholarship Program Act, carves out vouchers for students with special needs, regardless of family income. Nine states — Arkansas, Florida, Georgia, Missouri, Mississippi, North Carolina, New York, Oklahoma, and Rhode Island — considered similar legislation in 2015, or expanded existing laws. This bill uses taxpayer funds to send vulnerable children to for-profit schools not bound by federal and state legal requirements to meet a student's special needs that public schools must follow.

Another ALEC bill, The Foster Child Scholarship Program Act, would create a voucher program specifically for children in foster care, and was introduced in Missouri.

"Opportunity Scholarships," introduced in four states — Illinois, Missouri, New Jersey, and New Mexico — earmark vouchers for students in schools deemed "failing."

The similar Smart Start Scholarship Program, introduced in four states — Missouri, New Jersey, New Mexico, and Tennessee — offers vouchers for pre-school and kindergarten on a sliding scale starting with families eligible for reduced price school lunches. The strategy with these bills is to use the notion of helping poor families as a first step towards expanding taxpayer-funded, private "scholarships" to any family, regardless of their ability to afford private school.

ALEC and its allies have additionally sought to move away from the term "vouchers" and towards "education savings accounts," even though the impact is ultimately the same: to shift taxpayer funds from public schools to private or religious institutions.

Versions of the ALEC Education Savings Account Act were introduced in seven states — Iowa, Illinois, Nevada, Oklahoma, Tennessee, Texas, and Virginia — in 2015. The bill subtracts funds directly from state school aid and deposits these funds into savings accounts for low-income students that can be used to pay private school expenses.

In 2015, developments in Wisconsin illustrate that the ultimate goal of all these measures is not a small voucher program, but a universal system that funds middle and upper income families, and leaves community schools in the dust.

When first proposed for Milwaukee in 1990, vouchers were pitched as social mobility tickets, a means of offering the city's low-income students of color access to private education. The initial voucher program, which was restricted to students from families earning less than 175 percent of the federal poverty level, gained support from some African-American leaders and was supported by State Representative Polly Williams, a Milwaukee Democrat, along with then-Governor Tommy Thompson, an ALEC alum.

Yet, privatization proponents — many funded by the Milwaukee-based Bradley Foundation — soon sought to expand vouchers beyond the limited scope of the early program. First, voucher proponents achieved a major expansion to religious schools in the 1990s under Republican Governor Tommy Thompson. More recently, under another ALEC alum, Governor Scott Walker, they have expanded Milwaukee's program to reach statewide and to include families with higher incomes.

"They have hijacked the program," Polly Williams said in 2013, a few years before she passed away. "As soon as the doors open for the low income children, they're trampled by the high income," she said. "Now the upper crust has taken over."

Under Walker, the income requirement for Milwaukee has been upped to 300 percent of the poverty level. A married couple with two children can currently earn $78,637 — far more than the median U.S. family income of $52,250 — and still send them to private schools at the public's expense.

Early data from the statewide program indicates that Wisconsin is subsidizing many families who were already paying to send their kids to private schools.

According to the Department of Public Instruction (DPI), nearly eighty percent of students participating in a recent statewide expansion of the voucher program were not previously in public schools, and nearly seventy five percent were already attending a private school.

What happened in Wisconsin is far from unique.

Other states have introduced vouchers as "civil rights" measures only to expand the programs to higher-income white families. The voucher-like corporate tax credit program in Georgia was originally billed as a way of helping African-American and Latino families, but most scholarships have been awarded to "white students from upper income families," the Southern Education Foundation wrote in a scathing report.

Education experts agree that Milton Friedman's vision of universal vouchers could lead to the destruction of the public school system, the abandonment of impoverished community schools and increased segregation.

Notably, in 1955, the year after Brown v. Board of Education, Friedman called for free market schools to allow people to choose "exclusively white schools, exclusively colored schools, and mixed schools."

In some states, the state Constitution bars the creation or expansion of vouchers, especially for religious schools, and advocates have also opposed the use of taxpayer money to effectively subsidizing religious education under First Amendment principles. So, ALEC has worked to achieve the same diversion of public funds to private institutions in other ways.

The ALEC Great Schools Tax Credit Act seeks to bypass this separation of church-and-state issue by offering a form of private school tuition tax credits that indirectly funnel taxpayer dollars to these institutions.

In contrast with basic vouchers, where the state directly reimburses a private or religious school for tuition costs, these "tuition tax credit" proposals — sometimes called neo-vouchers — instead offer tax credits to individuals and corporations who donate to a nonprofit "school tuition organization." The nonprofit then pays for a student's tuition.

The "donation" is really just a way for individuals and corporations to bypass state legislatures and the state budgeting process and reroute tax revenue relied upon by the state to private schools.

The Great Schools Tax Credit Act was by far the most popular ALEC bill in 2015: seventeen bills in thirteen states — Alabama, Arkansas, Arizona, Colorado, Illinois, Maryland, Mississippi, Montana, New Mexico, Nevada, New York, South Dakota, and Texas — introduced or expanded tuition tax credit legislation.

Following a tradition of incrementally ratcheting up its school privatization schemes, ALEC amended the model Great Schools Tax Credit legislation in 2015 to allow corporate taxpayers to receive a tax credit for up to 100 percent of their tax liability, up from 50 percent in previous iterations.

ALEC's own endnotes to the amended model bill warn that, "Allowing taxpayers to claim a tax credit for more than 50 percent of their liability opens the program up to charges that money is being diverted from non-education programs to support private schools." Indeed, that is precisely what is happening.

ALEC based this change in corporate tax credit on states such as Arizona, Florida, and Georgia that had already implemented the 100 percent liability tax credit, giving corporations in those states the choice to divert their taxes away from public institutions, and towards private schools.

In 2015, Nevada enacted a similar bill allowing for a 100 percent liability tax credit, and Alabama expanded their 100 percent liability corporate tax credit to non-corporate taxpayers.

In addition to directing money away from public schools to private and non-union institutions, ALEC's efforts also make running those schools a lot cheaper for the corporations and private entities involved. ALEC has been engaged in a relentless attack on teachers, their credentials, and the organized voice of teachers–unions.

Versions of ALEC's Alternative Certification Act were introduced in four states — Michigan, New Mexico, Wisconsin, and West Virginia.

These bills offer teaching credentials to individuals with subject-matter experience but not the appropriate education background. In Wisconsin, an amendment that would allow people without a college degree or even a high school degree teach certain subjects was slipped into the budget with no public warning and largely beaten back after a public outcry.

ALEC's direct assault on unions also accelerated in 2015.

As many of the groups pushing this agenda in the states are also involved in campaigns and elections, such as the Kochs' Americans for Prosperity and the DeVos' American Federation for Children, the assault on unions is clearly a strategy to weaken institutions that often back Democrats in an election cycle.

ALEC "Right-to-Work" bills — which make it hard to organize and sustain unions by making fair share fees optional — passed in Wisconsin in 2015 and in West Virginia in 2016 affecting private-sector workers only.

Both bills contained language nearly verbatim to the ALEC "model." Similar bills were introduced in eleven other states in 2015 — Colorado, Connecticut, Illinois, Kentucky, Maryland, Maine, Missouri, New Hampshire, New Mexico, Pennsylvania, and Washington.

A version of ALEC's Public Employees Freedom Act, which prohibits payroll deductions for union dues, was passed in Oklahoma and became law in 2015. The Oklahoma bill (HB 1749) specifically targets teachers unions and was modeled on Wisconsin Act 10, which ended collective bargaining for almost all public employees in 2011.

(The Oklahoma Education Association and the American Federation of Teachers Oklahoma filed a lawsuit in Augusts 2015 challenging the law as unconstitutional and discriminatory. That suit is still pending.)

Five other states also introduced versions of this ALEC bill — Iowa, Maine, Missouri, New Mexico, and Oregon.

Along with its bills supporting minimum wage repeal, living wage repeal, prevailing wage repeal, the "alternative certification" bill and ALEC's union-busting portfolio can be viewed as part of ALEC's ongoing effort to undermine an educated and well-paid workforce and promote a race to the bottom in wages and benefits for American workers.

Other ALEC-influenced bills introduced in 2015 include legislation to:

• Promote the creation of taxpayer-subsidized charter schools through the Next Generation Charter Schools Act, introduced in three states — Maryland, Utah, and West Virginia — which exempts charter schools from complying with the legal requirements that govern traditional public schools, such as teacher qualification standards. This legislation also creates an appointed, state-level charter school authorizing board, safeguarding charter schools from local accountability.
• Shield charter schools from democratic accountability through bills such as The Innovation Schools and School District Act, introduced in three states — Connecticut, Mississippi, and Texas. This legislation removes local accountability by giving state-level officials — rather than elected local school boards — chartering authority for schools that do not follow the legal obligations of public schools, including possibly waiving provisions of teacher collective bargaining agreements.
• Send taxpayer dollars to unaccountable, for-profit online school providers through the Virtual Schools Act, introduced in five states (Alabama, Illinois, Minnesota, Missouri, and Virginia), the Statewide Online Education Act, introduced in three states (Mississippi, South Carolina, and Virginia), and the Course Choice Program Act, introduced in five states (Alabama, Missouri, Oklahoma, Texas, and Wisconsin). These bills promote an education model where a single teacher remotely teaches a "class" of hundreds of isolated students working from home. The low overhead for virtual schools certainly raises company profits, but it is a model few educators think is appropriate for young children. Even the Walton Family Foundation, no friend to public schools, has documented the failure of online schools in 2015.
• Allow schools to revoke tenure for teachers through the Great Teachers and Leaders Act, introduced in three states — New Mexico, New York, and Oklahoma. This bill allows these schools to let go of teachers, despite seniority or contracted tenure, and purports to base these decisions on "performance," mostly measured through "student growth."
• Limit teacher tenure through the Career Ladder Opportunities Act, a version of which was enacted in Idaho, which modifies teaching contracts and pay scales to base them upon teaching "performance," potentially demonstrated in part by student test scores.
• Create mandated curriculum supporting ALEC's rhetoric about "federalism" in the Founding Principles Act, introduced or expanded in six states — Arkansas, Georgia, Michigan, New York, South Carolina, and Texas. This bill requires the teaching of a semester-long course on the "philosophical understandings" of America's founders that appears geared toward indoctrinating children with conservative views.
• Require the government to facilitate and fund sending students to any school in the state through The Open Enrollment Act, introduced or expanded in three states — Arkansas, Florida, and Rhode Island. These "open enrollment" programs are an alternative to voucher programs and have a similar fiscal impact on state education budgets.

Some of the interests funding ALEC and driving the effort to undermine universal public education include:

The Kochs' Americans for Prosperity (AFP) group. AFP has long been a member and funder of ALEC's education committee and has been active in promoting ALEC policies in the states, lobbying in favor of measures like vouchers in Wisconsin and holding rallies in Oklahoma to support the Special Needs Scholarship Act. AFP has also launched "issue ads" to support ALEC modeled school reforms.

Members of the State Policy Network (SPN) are also key drivers of the ALEC agenda in the states. SPN is a network of state-based "mini-Heritage Foundations" that provide academic cover and the appearance of local grassroots support for ALEC policies — even though the groups are working in a coordinated fashion. For example, SPN affiliates like Colorado's Independence Institute, Arizona's Goldwater Institute, Florida's James Madison Institute, and others are part of the ALEC Education Task Force. SPN was created to help ALEC's national agenda look local, as CMD has documented.

K12 Inc., the nation's largest provider of online charter schools, in which low-paid teachers manage as many as 250 students at a time and communicate with their pupils electronically. The corporation, co-founded by famed Wall Street junk bond king Michael Milliken, is on the ALEC Education Task Force and its lobbyist Lisa Gillis has Chaired ALEC's Special Needs Subcommittee. On top of other studies showing that full-time virtual schools are not appropriate for most children, the conservative Walton Family Foundation commissioned a study from Stanford University in 2015 which found that, over the course of a school year, students in virtual charters learned the equivalent of 180 fewer days in math and 72 fewer days in reading than their peers in traditional charter schools, on average.

The 501(c)(4) American Federation for Children and its 501(c)(3) wing the Alliance for School Choice are key drivers of the school privatization agenda in ALEC. The groups were organized and are funded by the billionaire DeVos family (heirs to the Amway fortune); Richard DeVos has received the ALEC "Adam Smith Free Enterprise Award" and Betsy DeVos chairs AFC. AFC's top lobbyist at ALEC is disgraced former Wisconsin Assembly Speaker Scott Jensen, who was convicted of three felonies for misuse of his office for political purposes and banned from the state Capitol for five years (though the charges were later reversed and dropped as part of a plea deal).

The Milwaukee-based Bradley Foundation, one of the top school privatization funders in the country, has spent more than $31 million promoting "school choice" nationwide between 2001 and 2012. For decades, Bradley has also been a major ALEC funder bankrolling ALEC operations and key reports. The foundation has over $800 million in assets and has been headed for many years by Michael Grebe, Governor Scott Walker's longtime campaign co-chair (he is retiring in mid-2016).