New Ways to Pay

On Tuesday, Californians will vote on Proposition 174, the Education Vouchers Initiative, a constitutional amendment that would provide parents of children in kindergarten through 12th grade with a voucher, a type of tuition credit, worth half of the amount of money the state spends per child per year for a public school education.

The voucher is estimated to be worth between $2,500 and $2,600 in the 1994-1995 school year and could be redeemed at a private or parochial school that participates in the program and to which a child is accepted.

Supporters say vouchers would expand parents’ choice of schools and create competition that would force public schools to improve or risk losing students. Voucher opponents say it will take money from public schools and allow unregulated private schools to proliferate.

Here is how the voucher system would work:

Qualifying for a Voucher

Any school-age child is eligible for a voucher if he or she enrolls in a school that has agreed to accept vouchers and meets other requirements.

Children already enrolled in private schools can qualify for a voucher. If a child enrolled in private school after Oct. 1, 1991, he or she would qualify for a voucher for the 1994-95 school year. If a child was enrolled in private school as of Oct. 1, 1991, he or she would be eligible to receive a voucher in the 1995-96 school year.

ENROLLMENT

Students in private schools (1992-93):

Religious schools: 82%

Secular schools: 18%

Total private school enrollment in 1992-93: 554,014

*

Number of private schools registered with the state:

Religious schools: 61%

Secular schools: 39%

Number of K-12 public schools: 7,666

Total public school enrollment in 1992-93: 5,195,777

School Requirements

Size. Schools must have at least 25 students to qualify to redeem vouchers, therefore people who teach their children at home cannot use a voucher to pay their expenses.

Number of private schools with 25 or more students (1992-93):

Religious schools: 70%

Secular schools: 30%

Admissions. Voucher-redeeming schools may set their own enrollment criteria. According to the wording of the Constitutional amendment, they may not discriminate on the basis of race, ethnicity, color or national origin. But they may refuse to admit students based on such criteria as gender, religion and academic qualifications.

Regulations. Private schools in California are subject to fewer regulations than are public schools. The state does not set educational standards for private school teachers or require that they follow the state-mandated public school curriculum. Under state law, private schools must offer instruction in various “areas of study,” including English, math, science and social sciences, but each school can devise its own curriculum in those areas and can set its own teacher qualifications.

Tuition. The initiative does not set tuition rates or limit tuition increases, so schools may charge more than the voucher will cover. Parents would pay the balance.

If a school charges less than the voucher value, the surplus would become a credit, held in a trust fund for the child by the state. The child could use it in future years or until his or her 26th birthday to cover tuition at a voucher-redeeming school or any of the state’s public or private colleges or universities. Any remaining amount would be transferred to the state treasury.

Average Annual Tuition by Type of School

Under $2,600

Catholic: 50%

Other religious: 41%

Secular: 9%

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$2600-$4999

Catholic: 15%

Other religious: 23%

Secular: 62%

*

$5000 or more

Catholic: 7%

Other religious: 15%

Secular: 78%

Private Schools Expected to Accept Vouchers

Number that charge more or less than $2,600 in annual tuition.

Less than $2,600: 550

$2,600-$2,999: 75

$3,000-$3,999: 123

$4,000-$4,999: 77

$5,000-$5,999: 46

$6,000-$6,999: 30

$7,000-$7,999: 14

$8,000-$8,999: 11

$9,000 or more: 30

Public School Choice

The initiative gives the Legislature until Nov. 2, 1994 to establish a process by which public schools could become independent voucher-redeeming schools, which would free them from regulations that currently govern public schools. This provision would expand parents’ ability to choose a public school outside their neighborhood or home district. State and federal requirements for desegregation would still apply.

Financing a Voucher System

Who gets the money. For each child enrolled in voucher-redeeming school, the state will pay the voucher directly to the school in monthly installments, to be applied to tuition charges.

Cost to the state. The measure could cost the state up to $1.6 billion more during the first two years to provide vouchers for all 540,000 children currently in private schools.

In 1994, 120,000 private school students would be eligible. 120,000 x $2,500 (approx worth of voucher) equals $300 million.

In 1995, an additional 416,000 eligible private school students would be eligible. 416,000 x $2,500 equals $1.04 billion.

Savings for the state. The more public school students who use vouchers to transfer to private schools, the more money the state saves. That is because the value of the voucher is half of what the state spends to educate a child in the public schools, and the difference will revert back to the state’s general fund. Analysts predict that it would take between 800,000 and 1 million public school transfers to offset voucher costs and save the state money.

What Happens to Education Dollars Under a Voucher System

Illustration: a check for $5000 (the state’s per pupil expenditure on public schools) with one line drawn out to another box that says general fund $2500 and another line going to a box that says voucher $2500. this would show how the $5000 spent per pupil by the state would be distributed: half to the voucher, and half reverting to state general fund NOT to public education coffers.

Impact on public school funding. The fiscal impact on public schools is difficult to predict. Most analysts expect it to cut into public school spending because the education budget will have to finance vouchers for students already attending private schools and will lose additional money each time a child transfers from a public school. Although the state general fund might gain money, individual schools could lose funding when students transfer. But if large numbers of public school students transfer, school systems may be able to recoup some losses because they will need to spend less on such things as employee salaries, school construction and classroom supplies.

California’s total education budget for 1992-93: $25.94 billion

Total expenditure per student: $4,569

California’s national ranking by per student expenditure, 1993-94: 40th

Sources of Public School Revenue

State: 60%

Local property taxes: 26%

Federal: 8%

Other: 6%

Special Issues for Parents

Can my child be dismissed from a voucher school? What then happens to the voucher?

The initiative allows voucher-redeeming schools to dismiss students for academic or disciplinary reasons, at the school’s discretion. Once the student is dismissed, monthly voucher payments to that school will stop. If the student enrolls in another private school to finish the school year, that school can receive the remainder of the student’s voucher payments.

How would a child with special education needs be affected by the voucher system?

The initiative does not require or provide for the expenditure of additional funds on behalf of children with special needs, but it does authorize the Legislature to decide whether to award supplemental grants to those students.

Public school students who lack English fluency: 21%

Percent who have physical or learning diabilities: 10%

Can I use a voucher to pay for transportation to school?

Vouchers can only be applied toward a school’s tuition charges and fees for books, supplies and other educational costs. They cannot be used to pay for transportation.

Would vouchers be taxable as income?

The initiative exempts vouchers from California state tax, but there has been no ruling by the Internal Revenue Service regarding federal taxes.

Has any other state implemented a voucher system like this?

There is no precedent in the United States for this initiative. A similar program in Milwaukee, Wis., includes only non-religious private schools and involves fewer than 1,000 students. By comparison, 5.8 million California students would be eligible to receive vouchers.

Can the voucher law be changed if problems arise?

The initiative would amend the state Constitution, so changes could only be made with approval by a majority of voters. The initiative also would limits any new regulation of private schools by requiring that three-fourths of the state Legislature approve any changes in state laws governing private schools.

Source: California Department of Education, Policy Analysis for California Education, Southwest Regional Laboratory