School Choice & Charters

Report Offers Caution on Costs Of Operating Voucher Plans

By Olivia Doherty — November 05, 2003 3 min read

Voucher programs may cost more, and require more administrative work, than policymakers believe, a recent study concludes.

The report, “Administrative Costs of Education Voucher Programs,” is available online from the Center on Reinventing Public Education. A summary is also available. (Full report requires Adobe’s Acrobat Reader.)

Contrary to the notion that voucher systems could simply reallocate existing money, additional funding and staffing would be required to run such programs, says the report by the University of Washington’s Center on Reinventing Public Education.

The study, “Administrative Costs of Education Voucher Programs,” delves into the specific structural and financial changes that would be required to operate a voucher program authorized by state law and financed by state and local public money.

Given the complexities, the report questions the readiness of school districts to deal with the changes necessary to run voucher programs, which give families public aid to use toward tuition at private schools.

“A lot of communities really haven’t done a lot of things that have to be done,” said Paul T. Hill, the author of the report and the director of the center.

Mr. Hill estimated the financial costs that state and local education agencies would have to face by examining a hypothetical voucher system comparable to the system in place in Cleveland.

State government agencies, local education offices, special voucher-program offices, and private schools each hold responsibilities in implementing voucher programs, he said, and need to have sufficient administrative support in several areas.

But an area that many districts have difficulty with, Mr. Hill said, is in tracking student records. Primitive data-keeping systems, often found in large city school districts, pose serious hurdles in verifying the eligibility of student applicants and in transferring information between schools—functions crucial to making a voucher program work, the report says.

“Choice only makes it more evident they don’t have those competencies,” Mr. Hill said, “when they should have had them anyway.”

‘A Real Cost’

While various voucher programs may assign duties in different ways, the report says, the many functions that must be performed do not change. They include qualifying private schools for participation, conducting lotteries to select students, and evaluating achievement results.

In addition to requiring accurate and easily accessible records, a voucher program demands additional human resources and changes to existing district structures, the report says.

Unless districts prepare for real administrative changes, such as setting up a central voucher office, Mr. Hill said, costs will run high.

According to Mr. Hill’s estimates, with 2,000 students each receiving tuition vouchers averaging $4,000, and allocating $500 in categorical money for each student and $600 in transportation costs per student, state and local agencies would face more than $10 million in annual gross costs. That figure also includes management and evaluation expenses.

Even after considering possible reductions in public school spending brought about by shifts in enrollment to private schools, the net costs would come to $3.2 million, the report says.

“There is a real cost to local districts,” said Marc Egan, the director of the voucher strategy center at the National School Boards Association, which opposes publicly funded tuition vouchers. He said lawmakers should consider the effects a voucher program would have on public school funding.

But assessing the costs of a hypothetical voucher system might be harder than it seems, said Lawrence Patrick, the president of the Black Alliance for Educational Options, which supports vouchers. That is because of the wide variety of forms a voucher program could have, he said.

“Administrative costs are inextricably linked to how the voucher program works,” Mr. Patrick said. “It really does depend on the way it’s designed.”

Still, Mr. Hill said, the analysis could help states considering voucher programs to identify potential costs and their implications.

“With the exception of a couple places that have tried out programs for themselves, nobody has figured out what this implies for the school district budget and the state budget, and what new capacities have to be built,” he said. “So this was just an effort to get people thinking about it.”

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