Proposition 38 Makes Promises It Cannot Keep

by
Luis Huerta

Center for Education Research, Analysis, and Innovation
School of Education
University of Wisconsin-Milwaukee
PO Box 413
Milwaukee WI 53201
414-229-2716

December 19, 2000

CERAI-00-27

Proposition 38 Makes Promises It CannotKeep

by Luis Huerta

California’sProposition 38 would generously award tax dollars -- at least $3 billion inportable vouchers -- to parents who send their children to private schools.

The seductive simplicity ofthe voucher idea has attracted an odd set of bedfellows. Wealthy parents, whoalready use private schools, are eager to reap this hefty sum in tax relief,and some Latino and black leaders see vouchers as liberating for parents whofeel trapped in mediocre public schools.

Yet it's the unexpectedcoalition that opposes Prop. 38 that is most surprising: the conservative HowardJarvis Taxpayers Association, local Catholic leaders who see it as welfare forthe well-off, teacher groups and pro-voucher advocates who prefer targetingvouchers on low-income parents.

These opponents realizethat the $4,000 voucher provided in Prop. 38 would be a weak incentive forprivate schools to expand. The initiative's author, Silicon Valley investor TimDraper, believes deeply in the magic of markets: that a voucher worth onlyone-half the actual cost of educating a child each year would spark thecreation of new private school classrooms and a panoply of new schools.

But a serious look at theprivate-school landscape in California suggests otherwise. Private schoolscurrently serve about 650,000 of California's 6 million students, with nearly 80percent of private-school students attending religious schools. With only a$4,000 voucher in hand, parents choosing to exit public schools could onlyafford lower-cost Catholic schools, where yearly tuition averages $2,200 forelementary and $4,000 for high schools.

But would school choice onthe cheap really spur private schools to more than double their enrollments, tothe tipping point where the state would save more money from this parentalexodus from public schools than it would pay to those already using privateschools? A recent UC Berkeley-Stanford study concluded that the voucher wouldnot pack a sufficient economic punch to increase the number of spaces inprivate schools, since $4,000 would fall short of actual per-pupil costs.Tuitions are low at parochial schools because they are subsidized by localdioceses, parishioners and endless fund-raising efforts on the part ofcommitted parents.

Private schools alreadyface cruel market forces. Despite their fund-raising efforts, they can onlyafford to pay teachers two-thirds the average earnings of public-schoolteachers. How will they double their teaching staffs to expand, givenCalifornia's severe teacher shortage? Next, consider recent findings from theCalifornia Catholic Conference revealing only 32,000 empty desks among thestate's 4,200 private schools. This means that fewer than 0.5 percent ofCalifornia's students could initially participate in the Prop. 38 voucherprogram.

Robert Teegarden, policyadviser to the state's Catholic bishops, argues that the prospects of buildingnew private schools to meet further demand are dim. "Although it would bepossible to shift current tuition subsidies toward new construction, a $4,000voucher would still be insufficient to provide for both capital and educationalcosts," according to Teegarden.

If private schools wereunable to more than double their enrollments, Prop. 38 would become the mostexpensive school reform ever attempted in California. Sacramento's LegislativeAnalyst Office estimates that even if private schools could create 300,000additional student spaces, a whopping 50 percent expansion, taxpayers wouldstill pay out $2 billion in vouchers to mainly affluent parents who already useprivate schools, a hefty price tax for little expansion of school choices.

In short, Prop. 38 is ahuge crapshoot. No one questions the need to widen school choice, as withcreating publicly accountable charter schools, especially for poor andblue-collar parents who can't afford to exit their neighborhood school. ButProp. 38 would immediately reward the rich. Beyond this, the initiative offersonly false hopes for other families and a costly economic gamble for privateschools.

Luis Huerta is a researchassociate at the Graduate School of Education at UC Berkeley.