Delaware Lawmakers to Debate Broad ESA measure

This blogpost first appeared the week of June 9, 2014, on the website This is a guest post by Matthew Ladner Senior Advisor for Policy and Research at the Foundation for Excellence in Education. This is in reaction to the hearing on HB353, the Parent Empowerment Education Savings Account Act (PEESAA), which was heard on June 11, 2014 in Legislative Hall.

Delaware lawmakers are set to debate a broad ESA measure with a sliding scale by income.  The proposal has activated the anti-bodies of the public school establishment, and the sponsors acknowledge in the article that they do not expect the measure to pass this year. NAEP indicates that Delaware has done a good job in improving the public school system in recent years, and it seems likely that parental choice is playing an unsung role in Delaware’s improving scores.

Delaware has the second highest private school attendance rate in the nation (behind only Hawaii) at 20% of students. Note that this percentage dwarfs that in states like Arizona and Florida, whose private choice programs are essentially trying to play catch-up to the old-fashioned checkbook choice widely exercised in states like Delaware. Delaware charter schools have been heading towards a 10% of the market as well, and many Delaware charter schools have waiting lists.

The question for Delaware lawmakers to consider therefore is not whether they should have parental choice.  They already have parental choice.  The question to face: who should be exercise parental choice?  Currently Delaware’s answer to that question is: the wealthy, with others getting a less-diverse form of choice in the form of charter schools or their wait lists.

People prize stability in life, and it is clear that many in Delaware feel acute discomfort from the mere advent of charter schools. Education spending ought however to be the entitlement of the child, not of any system of education. Moreover, the Census Bureau forecasts a 90% increase in Delaware’s elderly population between 2010 and 2030, foretelling a deep battle between health care and education spending in the state. It would be wise for the state to experiment in making parents the voluntary offer of less spending in return for greater control and flexibility. Simply maintaining the status-quo does not represent a viable option even in the medium term. Our experience from other private choice programs demonstrate that there will not be a mass exodus from the public school system.

The Delaware proposal is admirable in giving the most to the children starting with the least. I look forward to the conversation.

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Why Education Savings Accounts are important.

A bill to allow poor families the financial assistance to improve their children’s education is being met with stiff resistance by both the left and the right.


The left opposes choice because many are strong advocates of the public schools (debate is not even on government paying for schools-debate is over whether government should actually be running the schools). They believe that you should be made to send your child or grandchild to the local school chosen solely on your zip code because “they believe in public education” and that’s that. Some even benefit greatly from the generous perks one can receive by teaching in a public school. While it is true that almost no one chooses to become a teacher in order to get rich, and just about all (if not all) are motivated by the genuine desire to help young people, the fact is that public school teachers and their union reps do get generous benefits such as: 12 week summer vacation (some in-service hours during the summer are still less than the typical worker putting in a 40 hour week in the summer), a reasonable salary, a generous pension plan, dues for the reps, etc. Some are threatened by the recent arrival of charter schools and a greater demand for private schools and homeschooling, since our model for funding traditional public schools is based on counting kids who attend the schools and receiving funding per student. They believe “charters and choice” will destroy public schools, and for many they may believe this will take away their jobs or lower salaries. The response is this: why do some parents want the schools? For one, it is the parent’s/guardian’s/grandparents (grand)child or (grand)children. They do not belong to the community as some might want you to believe. If the parent truly feels that a religious education, a cyber school education, a charter education, or even a traditional public school education is best, then that’s their right. If the public school defenders dislike charters and choice, they ought to ask WHY there is even a movement in the first place (and no, it is not an astroturf movement funded by the Koch Brothers or ALEC). The problem is NOT that we spend too much money. Delaware spends over $12,000 a year on public education, close to $17,000 a year if capital improvements and expenses are included (such as building new schools or upgrading a cafeteria or electrical outlets in a building). Many good private schools charge less than that per year, so cost is not the issue.


Many on the right appear to be opposed to ESA’s as well. Many look at this from a purely tax and spend perspective and conclude that this is just “welfare” for poor people. That all this is is more big government. That assertion is incorrect. The state regulates and oversees the ESA programs, within reason, to cut down on any fraud and abuse which might occur. the ESA’s are given to parents based on income and need, and must be renewed every year by the state. Guardians found to be irresponsible with the money will have their privileges revoked, to the tragic and great detriment of the children who need it most. The cost of one ESA is ALWAYS equal to or less than the lost of a traditional education, and 10% of the ESA money goes to the public school to begin with. Spending $7,500 to help a parent to send her intelligent child to a school like Tatnall is a far better deal than spending $12,000 on the current model is a better deal for taxpayers. A long-term study by the Annie E. Casey Foundation found that 88% of those currently incarcerated all had one (of several) things in common: they could not read even at a basic proficiency by the time they completed 3rd grade and went to 4th grade. Most young people who are not engaged in the classroom and who come from “bad” areas such as parts of Wilmington are likely to drop out of high school and end up on the streets, where they will not have the knowledge or skills to find a good paying job and many will sadly end up in prison or receiving government assistance. Given the severity of the situation, and the fact that Delaware’s education system is mediocre (proof: look at IRS data and see how many more families move to other states such as right across the border into PA) we should be doing everything we can to improve education. Just because a government program is created does not automatically make it bad; yes there will be issues but they pale in comparison to the issues we have now. Creating a government program which reduces spending by another is a positive achievement.

Try being told what grocery store you will use, what movie theater you can go to, what doctor or dentist you must see, what restaurants you are allowed to eat at based purely on your home or apartment address.

The bill, HB353, will be heard on Wednesday the 11th at 2:30 PM. If you agree that something must be done to offer poor parents and special needs students a real choice in education, one where parents are not assigned to a school purely based on address, then please read the bill on the Legislative website and see what you can do to improve the quality of Delaware’s K-12 education.

As always, please feel free to comment.

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Now Is the Best Time to Expand into Captive Insurance Solutions with an Agency Captive

Currently, insurance brokers are experiencing a soft market, meaning competition between brokerages is fierce. This market actually provides an excellent opportunity for expansion into captive insurance services with the aid of an agency captive. Any brokerages that have previously considered expansion should re-evaluate their position, because the market is unlikely to become more favorable. Now is the time to expand because:


  • Market Growth – Despite heavy insurance competition, captive insurance is growing rapidly as it gains publicity. More businesses than ever recognize the benefits of captive insurance, and they need brokers.


  • Increased Revenue – Insurance companies that expand during soft markets increase their potential for short- and long-term revenue growth. Added services give brokerages the opportunity for new clients. As the market hardens again, these new clients become increasingly loyal.


  • Ease of Expansion – During soft markets, agency captive carriers offer better rates, with fewer volume requirements than exist during hard markets. With fewer volume requirements, brokerages have the opportunity to expand with less pressure while they wait for their captive insurance solution demand to increase.


Take Advantage of the Soft Market


While most brokerages hunker down and wait for the market to harden, opportunist brokerages take the initiative to grow during soft markets by expansion into captive insurance services. Expansion does more than lead to an increase in the number of clients and overall revenue. It also allows brokerages to take advantage of the fact that agency captive carriers offer great opportunities during soft markets.