Could education savings accounts be in North Carolina's future?

Jan. 03, 2013 @ 05:00 AM


We've discussed here before potential public school reforms coming to North Carolina during the coming legislative session. The newly elected governor, lieutenant governor and the state’s house majority leader have indicated that this is going to happen.

The new governor, Pat McCrory, will have an opportunity to appoint six new members to the state Board of Education by March 31. Dan Forest, who becomes the lieutenant governor, also has a seat on this board. Thus, it appears Republicans will occupy seven of the 13 seats. Further, the governor will appoint the chairman of the board.

It is not difficult to predict, therefore, that reforms in the pre-K-12 school system will occur. Just what those reforms will entail is much less predictable.

The hot-burner issue of providing more school choices will, undoubtedly, be on the legislative agenda. There are various avenues lawmakers can take to accomplish their goals. One of the ideas being floated is to introduce education savings accounts (ESAs) in North Carolina.

North Carolina's House Majority Leader, Paul “Skip” Stam (R-Wake County) has reportedly said that among other approaches, he is exploring potential legislation to make ESAs available to parents of students in the state. This is familiar territory for Stam; he led the effort to pass legislation last year that gave tax relief to parents of students with special needs.

Families can use ESAs in the same way health savings accounts are applied to medical needs. The funds are used to open a limited-use debit account the family controls. The state opens the account by using 90 percent of the money that the school district would receive to educate a child.

In addition to the savings for taxpayers, those supporting ESAs have pointed out significant advantages over other approaches to school choice. One of the major benefits is that ESAs allow parents to customize their children's education in ways that are not possible under other programs. Education vouchers or tax credit programs permit parents to choose a private school over a public school for their children. The flexibility of ESAs would likely be welcomed by many North Carolina families.

Under a typical ESA, a family can use some of the funds to send a child to a private school while using part of the money to purchase textbooks or pay for tutoring, virtual and online courses, etc. Also, any funds remaining in the account at the end of the school year can be rolled over to the next year or be placed in a college savings account for the student. Of course, these features will exist only if the legislation and rules are written accordingly.

Without doubt, there will be heavy-duty opposition by the public school establishment to ESAs, just as there has been to other education reform efforts. Gov. McCrory, Lt. Governor Forest and Rep. Stam will have to show strong leadership and determination in order to incorporate ESAs as a mechanism to provide more educational options.

The school choice movement has picked up steam in the state. We will watch with interest to see if lawmakers step on the accelerator and swiftly include ESAs as part of the reforms or coast into changes that might be less challenging.