September 5, 2004

Ixne School Vouchers

By: AFF Editors

For many on the Right, support for school vouchers has become sacrosanct. The idea of letting poor parents send their children to private schools is obviously very appealing, as is the promise of vouchers to transfer money and resources from left-leaning teachers’ unions to right-leaning religious groups. But in addition to helping a few students and delivering partisan gratification, vouchers are intended to improve the public education system. Is this in fact what they are doing?

The basic logic behind vouchers, which originated with Nobel Laureate Milton Friedman, has a persuasive ring: Market competition and parental empowerment will relentlessly discipline underperforming schools. And in recent years, supporters have won a number of battles. The Supreme Court’s June 2002 Zelman v. Harris decision found that voucher programs could include religious schools. Existing programs in Cleveland, Albany, and Milwaukee have political support and have raised test scores. While it remains stymied in the courts, Colorado has even passed an ambitious statewide voucher proposal. The District of Columbia, likewise, has established a near-universal $7,500 voucher, the most generous ever launched in a major city.

So far, however, a sizeable gap exists between the promise of vouchers and their reality. The market of public opinion has rejected vouchers. No major voucher program has ever passed a popular vote: Over 70 percent of voters rejected efforts in Michigan (2000) and California (1996). And the District of Columbia’s voucher program remains undersubscribed. Existing voucher programs are only a modest success. Students leaving public schools using vouchers do only marginally better than those who remain behind. The public schools where over 90 percent of students remain, however, get better or worse at roughly the same rate as schools elsewhere in the nation.

Milwaukee, which has the largest and longest-running urban voucher program, offers the best example of vouchers’ effect on a school system. Since vouchers were introduced almost 15 years ago, reading scores have improved citywide faster than they have nation-wide, but math scores have actually lagged behind those in the rest of the country. Also, a large portion of the increase in test scores comes from the system’s modest success in retaining middle-class students rather than from lifting the test scores of poor students.

American Enterprise Institute fellow Frederick Hess, who has written a book on Milwaukee’s experiment, concedes that it’s impossible to figure out how much vouchers have to do with the city’s progress. Harvard’s Caroline Hoxby, who took a quantitative look at the Milwaukee program, concluded that it improved educational “productivity” (test score improvement per dollar spent), but moved the scores themselves only modestly. She did not attempt to separate the effect of vouchers from that of a simultaneous charter school effort. Summing up the evidence from all voucher programs (public and private) in the American Prospect, Richard Rothstein found almost no net evidence that they have worked. The opposite of a Friedmanite, Rothstein believes, however, that this is because markets don’t work.

Markets work fine, but the schools that are supposed to be experiencing market discipline have proven them-selves unresponsive to market forces. And the type of education the market provides in place of a public school education is rarely comparable to a public school education.

The market forces that vouchers supposedly unleash have already failed to improve urban public schools. These schools already get paid on the basis of their enrollments. Poorer school districts, particularly in urban areas, lose much more money than their suburban counterparts when students leave. This happens because wealthy suburban schools get almost their entire budgets from property taxes that have no direct relationship to enrollment. Most state aid programs and all major federal aid programs, on the other hand, disperse moneys on a per-student basis.

In Maryland’s Montgomery County public school system, generally considered the best large school district in the country, less than 7 percent of the budget comes from federal and state grants. In the Milwaukee public school system, considered one of the worst in the country, about 70 percent of the budget comes from federal and state sources. Schools in the very poorest areas (mostly public housing projects) get nearly 100 percent of their money on a per-student basis. One would expect this reality to discipline the Milwaukee, Cleveland, and Chicago public schools that saw their enrollments drop by nearly a quarter in recent decades as middle-class whites and blacks left the city. Instead of reform and improving test scores, these and other cities saw achievement and standards decline.

Another reason schools don’t respond to market forces is that unionized teachers get to keep their jobs no matter what happens. And aid per-student actually tends to increase when school enrollments fall. So the loss of students does not significantly affect the school’s budget. Religious schools–which educate 98 percent of the voucher students in Cleveland’s voucher program and 95 percent in Milwaukee’s–prove an imperfect substitute for private schools. Even in Milwaukee, where vouchers are ubiquitous and a majority of residents subscribe to the Catholic faith, less than a quarter of all school-age students in the city attend Catholic schools.

Religious schools, in any case, will likely never meet the needs of most parents. Even among those who can easily afford it, most parents do not want to send their children to religious schools. Many parents have justifiable concerns about schools run by churches to which they do not belong, and few religious schools provide educations based on technology, vocational skills, foreign language, or the arts. Many clerics, likewise, see running schools with general curriculums as a distraction: Overwhelmingly African-American Methodist and Pentecostal denominations have shown almost no interest in school-keeping even when vouchers have become available.

The market forces implicit in vouchers do not improve public schools because a totally free market for education does not exist. Outside of a tiny libertarian fringe, nearly everyone agrees that markets produce much less education than should be consumed in a highly developed society like ours. Paying for vouchers and public schools at the same time acknowledges this fact. Encouraging a reasonably small number of parents to leave public schools for religious ones won’t improve public schools. The public school faculties and staffs remain too insulated from market forces.

The best way to open public schools to market forces, therefore, is to force them to compete with each other.

There are two good ways to do this–one well known, the other less so–and both offer far more promise than vouchers.

Charter schools–public schools freed from bureaucratic constraints–have spread to 48 states and the District of Columbia. Particularly in large cities, they often grow on the ashes of failed public schools, taking over buildings and hiring the best teachers. Politically, charter schools are very popular–unlike vouchers. No matter how one phrases the question, a huge majority of parents say they want charter schools.

In Arizona, the state with the country’s most liberal charter school law, nearly 8 percent of students attend over 500 charter schools. In a series of studies, Arizona’s Goldwater Institute has found that charter schools coupled with allowances that give parents more freedom in choosing among public schools have improved just about every aspect of the state education system. Scores in both reading and math have improved, and much more quickly than those in the nation as a whole. Chicago, which started district-sup-ported “small schools” (a precursor to charter schools) in the early 1980s, remains a troubled school district in many ways but has seen test scores improve and its ranks of high-achieving students expand. Unlike vouchers, charter schools help do away with failing public schools and replace them with something better. Nearly all of D.C.’s charter schools are located in “surplus” buildings of failed schools.

Controlled choice programs offer similar competitive mechanisms for all of a district’s schools. Under con-trolled choice plans (implemented in Wake County/Raleigh, North Carolina, and Cambridge, Massachusetts, among other places), parents, at least in theory, can select any school in a district. The only restrictions are intended to keep schools integrated by class and to reserve spaces for local children. Where controlled choice plans have been implemented, math and reading scores have risen faster than elsewhere in the country. Even better, the students from the poorest families have seen the largest test-score improvement. Controlled choice is usually limited to a single school district, but states might follow the example of Montana, Wyoming, and Idaho, and allow parents to send their children to any public school in the state. By allowing urban parents to send their children to suburban public schools, the state puts underperforming urban schools on notice to improve or die. The final result is more choice and more competition than vouchers could ever deliver.

The way to expose public schools to market forces is to force them to compete with other public schools. Vouchers may help improve some schools or provide tactical victories for conservative forces. On their own, however, they will do little to improve public education.

Eli Lehrer is an associate fellow of the Sagamore Institute.