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October 1, 1998
Vol. 56
No. 2

Vouchers and Voodoo Economics

The magic of the marketplace is not sufficient to guarantee the success of a school voucher program. Educators and policymakers must first address the down-to-earth issues of capacity and accountability.

The idea of using government-paid vouchers to improve educational services at the precollegiate level has gained popularity in political and academic circles. High-profile efforts appeared during the 1996 presidential election campaign and in ballot initiatives in Washington State, California, and, most recently, Colorado. Voucher proponents argue that this approach will set in motion market forces that will ultimately improve public schools. Opponents counter that the solutions proffered by voucher advocates hold little prospect for improving the education of U.S. children in any substantive way. The danger exists that at best, programs supported by vouchers will help the educational circumstance for a relatively small group of students; at worst, voucher programs will recast the national dialogue on improving low-performing schools into a rationalization for educational triage for poor children, that is, educating some and discarding the rest.
Extending special privilege and benefit to select groups is common political practice. After all, politics is the business of deciding who gets what. The various voucher proposals circulating today underscore this definition. But policymakers and political leaders who promote educational voucher programs must be held accountable for their claims that such a policy strategy will ultimately benefit all children, public schools, and society in general.

Market Forces

Some advocates claim that vouchers will transform public education by the magic of the marketplace. Through competition with private schools, the theory goes, public schools will become market-driven; they will be more efficient and will run like a business; they will more effectively fulfill their mission; they will be more accountable to their customers—parents, students, future employers, and taxpayers; they will become less bureaucratic and be free of union domination; and they will improve or close.
This economic rationale for education vouchers is a hypothesis that to date has little objective, supporting data. However, several parallel models offer some insight into the likelihood that a policy based on a competitive market theory will lead to improved public schools. These models are inter- and intradistrict choice, home schooling, magnet schools, the existing array of private schools, and charter schools. Although each approach has contributed to developing a competitive market for all schools, questions remain about their individual and collective impact on public schools.
Open enrollment. This policy allows families to select among public schools. Most school districts use a form of open enrollment or school choice; it is a well-established policy feature in many states. Overwhelmingly, families take advantage of the open-enrollment policy for personal convenience—for example, a school's proximity to child care or home—and not for an educational purpose (Iowa Department of Education, 1996).
Home schooling. This option is available in all 50 states. Despite the fears of its opponents, home schooling has developed into just another educational approach available to parents. Although it is difficult to establish precisely how many youngsters are involved in home education, the practice is common in most school districts across the country and is part of the education landscape.
Magnet schools. These schools were originally developed to promote racial integration. To pay for the special programs and services needed to attract students, magnet schools often receive resources in excess of the amounts sent to neighborhood schools. They are popular among parents whose children attend the schools. But teachers and parents of students in neighborhood schools often believe that their schools could do as well as magnet schools if they too had extra resources and selective enrollment.
Private schools. Approx-imately 26,000 private schools operate across the United States. In some metropolitan areas, these schools enroll tens of thousands of students. For example, in Chicago, which has a school-age population of approximately one-half million, 20 to 25 percent of the children attend private schools. It is difficult to gauge the effect that competition from private schools has on the Chicago public schools. Typically, these private schools do a very good job with their students. But is there a discernible benefit for youngsters in neighboring public schools?
Charter schools. This growing design for public schools is now available in more than half the states (Nathan, 1996). Charter schools, which across the country number more than 500, are too new for their impact on improving the public schools overall to be evaluated. However, experiences over the past 40 years with alternative schools are instructive. Many alternative schools are wonderful for the children who attend them, affording a good match between the student and the school. Charter schools may be the bright light that leads to expanded solutions for the public schools. But this positive effect will occur through cooperation, not competition, between regular public and charter schools.
How do we measure the benefit of the total impact of all available education options? How do these competing options improve the education of the students left behind in poorly performing schools? How are these market forces changing the current system of public schools? When we consider all the examples of competition that are currently in play, the competitive-market rationale for vouchers shows few signs of viability.
With the exception of charter schools, the prospect of expanding the market is very limited. Practical barriers exist to creating more private schools through vouchers. Few policymakers or political leaders are asking the fundamental question regarding the capacity of private schools to absorb new students with vouchers: Are seats available?

Facing the Capacity Question

According to estimates from the U.S. Department of Education, National Center for Educational Statistics (1997), in fall 1997, public elementary and secondary schools enrolled approximately 46.4 million students. Private schools enrolled about 5.9 million students, or about 11 percent of the total elementary and secondary school population of 52.3 million. These data quickly raise the following question about the voucher approach as a school improvement strategy: At what point will the loss of market share prompt the desired turnaround in the public schools—15 percent, 20 percent, 25 percent? No one knows.
Examples of market forces causing change in business and industry are common and may be enlightening as we examine the voucher topic. Consider the Detroit automakers, who by the 1970s had lost 30 percent of the U.S. domestic automobile market to foreign competition before they responded to market forces, started retooling, and built higher quality and more fuel-efficient automobiles. A comparable shift of 30 percent of the student population from public to private schools, around 16 million students, is not possible unless political leaders are also willing to pay for the physical plant and equipment needed to enlarge the capacity of private schools. A major shift of the market, driven by vouchers and sufficient to cause the predicted change in the public schools, will not occur until this capacity issue is addressed.

It Takes a Village?

It is unrealistic to expect students to depart the public schools in convenient grade-level groups of 25 and lots of 500. Shifting the existing physical assets from public to private schools along with the transferring students raises a whole new set of issues and may not be feasible because the current stock of public school buildings is in a desperate state of disrepair. The General Accounting Office (1995) reported that the United States will need $112 billion just to repair or upgrade existing facilities. Couple this information with the projected surge in elementary and secondary school enrollments, which are estimated to grow by several million students over the next five years, and we easily see the problem. The current stock of classroom space is inadequate, and expanded enrollments are on the horizon. Before lawmakers start handing out vouchers, they must consider the instructional space needs for elementary and secondary education—both public and private.
While political camps argue about whether "it takes a village to raise a child," no one can doubt that it takes a community of like-minded citizens willing to make a long-term financial commitment to build a schoolhouse. Even a small elementary school capable of serving 500 to 600 students costs millions of dollars. The Clark County School District in Nevada, which has opened a new school each month in 1998, estimates the cost for a new elementary school to be $10 million;a middle school, $25 million; and a high school, $50 million (Pipho, 1997). That is real money, even by Las Vegas standards, and they are not raising it with car washes and bake sales!
The physical assets of the public schools are worth an enormous sum. Local communities making long-term financial commitments have accumulated these assets over the past century and a half. Today, communities typically finance school construction and large-scale purchases through the sale of 20-year bonds in the financial market. This entire system of construction financing is based on the faith of bondholders in the promise that a community will meet its long-term commitments. In the United States, this finance system is part of the fabric of a community and its relationship to its public schools.
Do voucher proponents envision taxpayers also funding the construction of private schools? Perhaps the idea is to transfer or lease existing public school facilities to private entities. Anyone who has tried to pass a bond levy to build a new public school knows how difficult it is. Taxpayers resent paying for school facilities under their own control. Why would they pay for schools that are privately held and in which they have no voice? The prospect of getting a community to support such an idea is remote at best.

Where Is the Accountability?

Ironically, voucher advocates, who frequently criticize public schools for their lack of accountability, tend to ignore the lessons from higher education, which operates in a very competitive market. They often speak of the discipline of the marketplace as an ideal accountability mechanism, yet the history of the higher-education student loan program in the United States is full of examples of rogue schools that exploit both their students and the taxpayer for financial gain. Sorting out which colleges are eligible to receive government support through loans to their students is not easy, which is why so many states and the federal government grapple with schools like "Ben's Beauty College and Transmission Exchange" over standards, accreditation, graduation rates, and financial aid eligibility.
The recent discourse about vouchers has focused on saving the poor from failing schools. But here again, more questions arise. What about the poor, the working class, and the middle class who already have their children in private schools at great financial sacrifice? According to a recent newspaper editorial (Roberts & Roberts, 1998), 90 percent of families with children in parochial schools make less than $50,000 a year. Will they be able to get government support once the public gets used to the idea of vouchers? With 6 million students already in private precollegiate education, this price tag will be huge.
Additionally, how long will it take poor families to figure out the swindle being perpetrated on them in the name of better education for their children? Consider what they are being offered. Their children are in distressed, government-run schools. The government's solution is to give parents the option of finding their own school and to support the child's education with half the money needed to pay the tuition. Where is the accountability in this program? Only the biggest cynic can dole out vouchers in such a bait-and-switch scam with a clear conscience.
Political leaders who advocate the voucher solution should consider a recent study of parents seeking a quality education for their children conducted by the Association of Community Organizations for Reform Now (ACORN). It is a commentary on the distortion of market forces and their potential to destroy educational opportunity and quality. The report, Secret Apartheid (ACORN, 1996), "details evidence of institutional racism in the New York City Public Schools which prevents parents of color from making informed decisions about their children's education." It outlines the different treatment received by parents as they "shopped" for schools and education programs for their children. The significance of the report to the voucher debate is that it underscores the reality that some children are treated as less desirable than others despite their ability to generate the same amount of revenue. An open-market environment will not level the playing field for these children. Money, after all, does not guarantee access. If it did, we would not need the Fair Housing Act or public-accommodation laws. Equal access is yet another accountability question that political leaders who support a voucher solution for school improvement must address.

Back to the Future

Although the noise level around the education voucher issue has increased recently, the notion of using tax dollars to send school-age children to privately controlled schools is not new. As early as the colonial period, communities routinely used tax dollars to pay for the education of children in private religious schools (Johns, Morphet, & Alexander, 1983). Not until the early 19th century did the concept of publicly funded, government-controlled schools take hold. State after state and community after community moved to establish public schools, which they determined were the most efficacious means to achieve quality mass education. They saw public education as a key part of nation building. In other words, as a nation we tried the voucher approach and decided to move to state-supported schools.
Ultimately, vouchers are about politics, not about improving education. Vouchers will be an educational life preserver for a small percentage of poor students who are stuck on sinking educational ships. However, the current voucher strategy does nothing to address the needs of those youngsters who must stay behind. The economic theory of open-market competition as a justification for vouchers and as the solution to an ailing education system is voodoo economics.

Association of Community Organizations for Reform Now (ACORN). (1996). Secret apartheid: A report on racial discrimination against black and Latino parents in the New York City public schools. New York: Author.

General Accounting Office. (1995). School facilities: Condition of America's schools. Washington, DC: Author.

Iowa Department of Education. (1996). Open enrollment: Report for the 1994–95 school year submitted to the Iowa general assembly. Des Moines, IA: Author.

Johns, R. L., Morphet, E. L., & Alexander, K. (1983). The economics of financing education (4th ed.). Englewood Cliffs, NJ: Prentice-Hall.

Nathan, J. (1996). Charter schools: Creating hope and opportunity for American education. San Francisco: Jossey-Bass.

National Center for Educational Statistics. (1997). The digest of educational statistics. Washington, DC: Author.

Pipho, C. (1997). Stateline. Phi Delta Kappan 48(10), 737–738.

Roberts, C., & Roberts, S. V. (1998, April 26). Politicians prefer posturing to acting on our top priority. The Rocky Mountain News, 3b.

Al Ramirez has contributed to Educational Leadership.

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