The controversial school-voucher initiative on the California ballot next month could save the fiscally pressed state billions of dollars, or cost it more than $1 billion a year, according to two reports released last week.
The inconclusive analyses by the RAND Corporation and Policy Analysis for California Education, two nonpartisan research centers, leave voters without any reliable way to gauge the proposal’s effects on state finances or public school expenditures.
The voucher program could increase the resources available for each public school pupil by 7 percent, the RAND report estimates, or cut those resources by 18 percent. “The bottom line is that no one knows,’' the study warns.
The wildly varying scenarios are the result of an inability to answer such central questions as how many parents would choose to switch their children from public to private schools, or how lawmakers in Sacramento would react to the new policy.
Such uncertainties highlight the difficulty states face in trying to assess the fiscal impact of any broad-based voucher scheme. The largest experiment to date, in Milwaukee, involves fewer than 1,000 students and does not include religious schools.
The California program, by contrast, would affect a vastly larger number of students--more than 10 percent of total enrollment nationwide--and would include both private and parochial schools.
“The initiative proposes radical change that has never been attempted on any significant scale in the United States,’' explained Michael W. Kirst, one of the directors of PACE. “Therefore, analysts have no precedents or even minor experiences that are relevant to work from in making these estimates.’'
How voters view the measure’s budgetary impact could determine its fate. Although Gov. Pete Wilson has not taken a position on the initiative, he expressed concern last week about its effect on the state budget and public school funding.
Mr. Kirst said public-opinion polling by PACE indicates that voters will oppose the initiative if they feel it hurts the public schools. So far, he added, they are skeptical that it would result in “big savings.’'
Weighing the Risks
Proposition 174 would provide parents with vouchers worth at least half the amount now spent on each public school student in the state, or about $2,500.
Parents could use the vouchers to help pay tuition at any “scholarship-redeeming school,’' including a private or parochial school or a public one that chose to convert its status.
Providing a subsidy to the approximately 540,000 students already in nonpublic schools would cost the state more than $1 billion a year, both reports agree.
The state could save money, though, depending on how many public school students transferred to scholarship schools, since the vouchers would cost much less than public education. The measure would also save an unknown amount on school construction.
PACE researchers estimate that 17 percent of public school students would have to shift--virtually tripling nonpublic-school enrollments over the next two years--to make up for the costs of extending vouchers to most of the existing nonpublic enrollment. Whether such a large shift would occur, analysts say, is impossible to predict.
Stephen J. Carroll, the project leader for the RAND analysis and a senior economist, said it raises a number of questions. “One, will that many parents want out?’' he asked. “And, two, will educational entrepreneurs create that many spaces for them, even if they do want out?’'
Avoiding a ‘Fiscal Crisis’
Voucher proponents have tried to sell the initiative as a way to avoid a budgetary crisis that is almost certain to occur if the state does not change its school-finance system.
California’s student population is expected to swell by 38 percent over the next decade. Under existing finance formulas, that would guarantee the schools 43 percent of state general revenues, up from 32 percent at present, RAND predicts.
“The bottom line is this state is facing a fiscal crisis,’' said Sean Walsh, a spokesman for the pro-voucher campaign. “Either the state implements our initiative ... or there is no plan.’'
The more students use vouchers, the more money the state would save. RAND estimates that if a third of public school students switched to private schools, state savings could amount to $7 billion or more. But if only 4 percent of students transferred out of the public system, the state could end up spending more money while serving fewer public school students, in order to hold per-pupil spending at current levels.
Guarantee Diluted
Under most scenarios, adopting Proposition 174 would reduce the guaranteed minimum funding for public education in the state, including the amount guaranteed per pupil.
That is because of the complicated ways in which the measure interacts with Proposition 98, a constitutional school-funding guarantee adopted by voters in 1989.
Although the legislature could choose to maintain per-pupil spending--particularly by plowing any savings from the initiative back into the public schools--education would be highly dependent on lawmakers’ political discretion. Legislators could also choose, for example, to spend any savings on other government services or tax relief.
In addition, the PACE analysis cautions that the measure would widen disparities in funding among school districts, because of wide variations in property wealth around the state.
Property-tax revenue stays with a local district and is not determined by its number of students. If large numbers of public school students leave a district for private schools, the property-tax revenue available for the remaining students goes up.
Under the state school-finance system, districts that generate enough property wealth per pupil no longer qualify for state equalization aid and are no longer subject to state spending limitations.
Mr. Kirst predicted that that could happen in at least 45 wealthy districts if enough pupils departed for nonpublic schools.
“There are some voters who are so fed up with the California education system that they are willing to risk a considerable amount of uncertainty in order to change the system significantly,’' Mr. Kirst observed.
“Voters are going to have to assess these risks and uncertainties for themselves,’' he added, “because we can’t narrow down the impact for them in a very close and definite manner.’'
