Edward Van Halen gave a fascinating interview at the Smithsonian Institution a few years before his death in a program, “What It Means to be an American.” Van Halen’s parents married in Indonesia when it was a Dutch colony; his father was a Dutch musician, and his mother was Indonesian. Immigrating to America after World War II, the Van Halens helped pay their boat fare to America by playing the piano for other passengers. Van Halen describes how he revolutionized guitar playing despite never learning to read music.
He explained that the instrument would not do what he wanted it to, so he had to change it through years of experimental instrument engineering, destroying many vintage guitars in the process. Van Halen earned three patents and developed a playing style that required a new form of musical notation (which Van Halen confessed to being unable to read more than standard musical notation). Van Halen was equally innovative with his playing techniques and revolutionized popular music with stuff like this. The interview is a window into the mind of a creative genius, and we could use more of this in school choice.
The first account-based choice program passed in 2011, debuting with approximately 150 Arizona students. Significant strides have been made in the number and inclusiveness of such programs, and many companies have entered the space to assist officials in program administration. The task of administering these programs is very complex and will need an Eddie Van Halen-level commitment to innovation to push them to their full potential.
The original hope of the Arizona Empowerment Scholarship Account creators had been to use debit cards and plug into a pre-existing system of vendor and product codes. Vendor codes prevent purchases at unapproved vendors (think Caesar’s Palace), and product codes prevent the purchase of prohibited items (think poker chips). The program administrators issued debit cards but have yet to be able to adopt product codes. A system of family receipt submission and review followed. As detailed by a first Arizona Auditor General review, it did not go entirely smoothly but had a far lower overall misuse of funds rate than other programs at around 1%.
Later, the Arizona authorities requested proposals for a digital vendor to facilitate account transparency and purchases but retained the debit card function as an option for families. Arizona ESA families have fought hard to keep the debit card as an option.
Arizona is currently the only ESA program with a debit card mechanism, and those cards have successfully implemented vendor codes. As detailed by the Arizona Auditor General’s Special Audit of the Empowerment Scholarship Program:
Our review of all 168,020 approved transactions identified in the Department’s Program account transaction data between October 31, 2018, and October 30, 2019, found only 1 successful marketing at an unapproved merchant totaling $30.
That 168,019 to 1 ratio represents a resounding success for vendor codes. We won’t know how well product codes work until someone tries them (preferably with anti-fraud chips common in credit cards but rare in SNAP). Arizona ESA debit cards have yet to be perfected, and yet no one in any other state has tried them. The instrument, in other words, is not yet quite doing what the player wants, and we require further innovation.
Debit cards with vendor and product codes are not mutually exclusive with online platforms, and these two mechanisms could be linked in a fashion like private debit cards and bank account websites. If linked platforms and optimized cards can be achieved, it would still be necessary for administrators to decide which products can and cannot be purchased. Administrators will read statutory language and make rulings on purchases regardless of the technologies used.
The Arizona Department of Education recently ruled on whether an Arizona ESA family could purchase an advanced bow to teach their student archery. Public schools have long included archery lessons in physical education classes. In consulting educators involved in archery, however, they determined that advanced bows were not used in teaching students. The Arizona Department of Education used this as a rational basis for denying the purchase of an advanced bow with an ESA.
We should greatly prefer a rational basis over an arbitrary basis for allowing or denying purchases. Hopefully, the broader universe of choice administrators is like Van Halen in his studio, going through trial and error to develop a more potent instrument.