Published Online: November 15, 1995

PepsiCo Backs Off Voucher Plan in Jersey City

Facing criticism that their company was backing vouchers, officials of the soft-drink giant PepsiCo are pulling back from their pledge to help low-income students in Jersey City, N.J., pay for private school tuition.

Vandalism of Pepsi machines and the possibility of a teacher-led boycott of Pepsi products, which also include snack foods and the Taco Bell and Pizza Hut restaurant chains, persuaded company officials that little goodwill would come of their generosity. Some Pepsi machines in the city have been jammed to make them inoperable and plastered with signs critical of the company, said Edwin Glasspool, a market-development manager for Pepsi in New Jersey.

Private school vouchers are controversial in Jersey City, and Mayor Bret Schundler and the local teachers' union are at odds over Mr. Schundler's efforts to introduce school choice to the 30,000-student district.

"I can't put Pepsi in a position where we're going to be boycotted by either side," Mr. Glasspool said last week. "We're in a no-win situation."

Mr. Glasspool said Pepsi would go forward only if the community--including the union and school officials--agree on a scholarship plan. He added that he will seek approval for any new venture from the company's national executives.

A Company Retreat

Pepsi's retreat comes less than three weeks after company officials stood at a City Hall press conference with Mr. Schundler and announced they would use revenues from sales of their products in Jersey City to finance $1,000 private school scholarships for low-income students. The students could use the money to enroll in any private school, including religious ones.

Although the number of scholarships that Pepsi would finance was not yet clear, the deal was seen as a major victory for Mr. Schundler and other voucher supporters. Privately funded voucher programs operate in 22 metropolitan areas, but Pepsi would have been the first high-profile, national corporation to support such a voucher, according to Janet R. Beales, a policy analyst with the Reason Foundation, a Los Angeles-based think tank that promotes free-market ideas.

Pepsi's Mr. Glasspool said he was surprised, however, to see the company's offer of tuition aid touted as "vouchers" in the media. The company was only hoping to expand a program it operates in Newark that helps pay tuition for low-income college students.

"It's kind of come out as 'Pepsi supports vouchers,"' Mr. Glass-pool said. "That's not what we're about. We just wanted to finance scholarships for some urban kids."

Leaders of the Jersey City Education Association attacked the plan soon after it was announced.

"Three out of four kids in Jersey City go to public schools," said Thomas Favia, the union's president. "They drink Pepsi. Why would you earmark their money for parochial and private schools?"

`Bullying' Tactics?

Mr. Favia said he never told Pepsi officials that the union would boycott the company, but said he made it clear that the program would be discussed at an upcoming meeting of state delegates of the National Education Association. "I told them that I could not guarantee that there would not be a statewide boycott," Mr. Favia said last week.

Daniel J. Cassidy, Mr. Schund-ler's education adviser, said the mayor will continue to seek private backing for a voucher program. The union's "bullying" tactics, he said, would ultimately backfire.

"We will go ahead without Pepsi and probably have more money than we had ever expected," he said. "My phone's ringing off the hook."

Meanwhile, members of a commission appointed by Gov. Christine Todd Whitman to draft voucher legislation for Jersey City say it is doubtful their recommendations will be ready for legislative action before 1996.

Some political observers had speculated that Gov. Whitman might try to push a voucher bill in the lame-duck legislative session that will convene before newly elected state representatives take office in January.

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