February 8, 1993 | Lecture on Education
Clifford F. Tbies is a Bradley Resident Scholar at The Heritage Foundation, on lea ve from Shenandoah University where he is the Durell Professor of Money, Banking and Finance. He spoke at The Heritage Foundation on October 29, 1992. ISSN 0272-1155. 0 1993 by The Heritage Foundation.1 Editor's note: On November 3, 1992, the Colorado p arental choice initiative was defeated, as was a sales tax increase to finance public schools. Supporters of parental choice in that state plan to follow up in the legislature, or with a more carefully focused citizen initiative, with an emphasis on minim izing the potential cost to the taxpayer. The California parental choice initiativewill appear on the Spring 1994 ballot.
We are today in the second great campaign in the United States to gain parental choice in educa- tion. The first great campaign occu rred during the 1960s and early 1970s. Limited support of paren- tal choice was in fact obtained in several states. In New York, Pennsylvania, and Rhode Island, laws were passed providing financial support for private schooling, including per capita grant s and tax re- lieL Additional support included provision of textbooks, transportation and other services, such as the administration of state-mandated examinations. This first great campaign to gain parental choice in education was defeated by a series of U .S. Su- preme Court decisions that were desig !nIed to establish, in Jystice Hugo Black's words, a "high and impregnable, wall of separation between church and state. Toward the late 1970s, momentum gathered for a second great campaign to gain parental ch o ice. This is the campaign in which we are now engaged. Part of this second great campaign has been a reconfiguration of the Supreme Court. In 1983, the Court upheld, by a 5-4 vote, an income tax deduction allowed by the state of Minnesota for expendi- tur e s incurred for elementary and secondary education, including education at religious schools.3 The stated reasons for allowing the deduction were 1) that the expenditures qualified whether in- curred at public as well as private schools, thus evidencing th a t a public interest, as opposed to a pri- vate, religious interest was being served; and 2) that the financial assistance was given to parents, and not to religious schools directly, therefore not entangling church and state. We might also note that Presi d ent Reagan's initial appointees to the Court helped to form the one- vote majority for this particular decision. His subsequent appointees, and President Bush's ap- pointees, have since consolidated this new majority. Another contributing factor to thispe c ond great campaign has been the undermining of our public schools through their transformation from locally controlled and financed schools that reflected community values, to increasingly politicized, bureaucratized, and equalized schools. Our public sch o ols used to be schools of choice. There were some obvious exceptions. In the South, the dual school system assigned children to schools on the basis of skin color. In the North, majority control of public schools alienated the Catholic minority. But for w h ite Protestants, and be- cause of local control and finance, the decision of where to live involved an election of which schools your children would attend. Ironically, the same crusade against religion that defeated the first great campaign for private s chool choice also undermined popular support for public schools. The overwhelming majority of2 7he reference is to Everson v. Board ofEducation, 330 U.S. 1 (1947), which dealt with the provision of transportation services to children attending private kc hools in New Jersey. Although allowed, on a 54 vote, the majority argued that state aid to private schools could go no further. That is, the provision of other services offered children attending public students on a non-discriminatory basis to children a t tending private schools would be presumed to be, unconstitutional if these private, schools taught religion. In Lenton v. Kurtznwn and Earley v. DiCenso, 403 U.S. 602 (197 1), the Court declared Pennsylvania's and Rhode Island's financial support of priva t e schools unconstitutional, even though restricted to expenses incurred in the teaching of secular subjects, arguing that the restrictions would require continuing surveillance to insure against diversion of funds to the teaching of religion, and that suc h surveillance would excessively entangle church and state. In Conunitteefor Public Education and Religious Liberty v. Nyquist, 413 U.S. 756 (1973), the Court declared New York's tuition grants for poorer families and tax credits for wealthier unconstituti onal because the funds in both cases went to schools whose primary mission was religious education. 3 Mueller v. Allen, 103 S. CL 3062 (1983).
2parents want their children to be taught,religion. This desire was more or less adequately met by the teaching of a non-denominational form of Christianity in the public schools. But with Justice Black's "high and impregnable" wall of separation, all references to ma i nstream religious beliefs have been removed from the public schools, and have been replaced by what has been described as the "false neutrality" of the complete absence of religion. Not only is the complete absence of religion unsatisfactory to many paren t s, but a variety of be- liefs objectionable to many parents have made their way into public schools, such as sex education that seems to endorse promiscuity. As a result, parental choice in education is no longer a Catholic versus non-Catholic issue, but a religious versus non-religious issue, or perhaps I should say a tradi- tional, conservative values versus contemporary, liberal values issue. A generation ago, public schools were administered on a very decentralized basis. But school dis- trict consolid a tion, cross-town busing, state mandates and control of teachers, textbooks, and curric- ulum, and a variety of schemes to equalize funding, have effectively turned public schools into instruments of state, as opposed to local, government. This has made lo c al public schools less able to reflect community preferences. Let's examine school funding equaliiatiom, Through the 1960s, public schools were funded pri- marily by local property taxes. This meant that public schools in poorer districts-central cities a n d rural areas-were funded at low levels. To be sure, state aid to school districts effectively estab- lished a floor, or minimum level of financing, below which funding would not fall. But public schools in wealthier districts-i.e., the suburbs-were funde d at higher, often much higher levels. If you wanted your child to attend a good public school, you had a choice. Were you willing to re- locate to a political subdivision with good public schools? Were you willing to buy an expensive home in an exclusive s uburb, and pay the higher taxes needed to finance good public schools? Since the 1960s, however, states have implemented a variety of schemes to reduce the variation in the financing of public schools. In a number of states, state funds are distributed to school districts in order to offset variation in local property taxes. Texas just recently implemented an equalization scheme whereby wealthier school districts will have to share their tax revenues with poorer districts. As a result of equalization and o t her state controls of local public schools, the public school sys- tem can no longer be as responsive to variation in the demand for education. To be sure, this has not yet become a significant part of the cam aign for parental choice in education, but I believe that it has that potential. ts.p Popular Support for Parental Choice In Education In the last year, popular support for parental choice in education has increased dramatically. Dur- ing the 1980s, the Gallup Organization found that from 43 to 51 pe rcent of Americans supported vouchers that could be used at "any public, parochial or private school." While not always an out- right majority, support always exceeded opposition. But, this year, the Gallup Organization found that 70 percent favored vouch e rs, only 27 percent opposed. This finding is verified by a Business WeekHarris Poll that showed that 69 percent fa- vored vouchers, and by a survey of African Americans conducted for the Joint Center for Political and Economic Studies that found 88 percen t support. A survey conducted by Florida State University found that 63 percent supported parental choice, and a survey conducted for the Wisconsin Policy Research Institute found that 70 percent of Wiscon- sins supported parental choice.
3Consistentl y, parental choice in education is found to be most favored by the poor, by minorities, and by residents of central cities. At this point, I should comment on the poll recently released by the Carnegie Foundation. In this survey, people were asked if vouc h ers should be used to enable a child to attend "a private school at public expense." Let me ask for a show of hands. How many of you would support vouchers for all schools, pub- lic, private and religious. Okay, how many of you would support vouchers only for private schools? Is there any surprise that the Carnegie Foundation found that only 32 percent favored vouchers for only private schools? In fact, a number of surveys, including ones conducted by the Gallup Orga- nization, have demonstrated that while Ameticans support vouchers for all schools they oppose vouchers only for private schools. Americans believe that public money should benefit all children; not the few (those who attend private school) nor even the many (those who attend public schools), b u t all. And, in particular, that every child should have at least a decent education, including children in central cities where public schools not only fail their education function, but aren't even safe; and including children of parents whose deeply hel d religious views make secularized public schools an unacceptable choice.
Cost to the Taxpayer Both the Colorado and California parental choice proposals involve extending vouchers to parents whose children attend private or religious schools, or who are home-schooled, which would be worth up to half the cost of educating a child in the local public school district. If such a plan were to be implemented, what would be its cost? The education establishment has only looked at the cost of extending financial aid to children cur- rently in private or religious schools, or being home-schooled. They give no consideration to the fact that some children who would attend public school would switch to the private sector if finan- cial support were forthcoming. The p o tential savings from reduced public school enrollments are ig- nored. This a static, fixed-pie view of the world. What else would you expect from economists employed by the education establishment? In California, the Legislative Analyst Office forecasts t h at the cost of that state's parental choice proposal would be $1.7 billion on the assumption that all 650,000 students currently in private or re- ligious schools, or being home-schooled, would redeem the proposed voucher at a value of $2,600 each. Not on e student in a public school would switch to a private or religious school, or to home- schooling. In Colorado, the Office of State Planning and Budgeting forecasted a cost of $195 million, on the assumption that 65,000 students currently in private or rel i gious schools, or being home-schooled, would redeem the proposed vouchers at a value of $3,000 each. Again, not one student in a public school would switch to a private or religious school, or to home-schooling. Economic theory, the experience with pareri a l choice in other industrial democracies, the experi- ence in the United States in higher education, one after another survey of parents' willingness to switch upon being offered education vouchers, Wisconsin's demonstration project in Milwaukee, and priv a te demonstration projects in Indianapolis, Indiana, Atlanta, Georgia, and elsewhere, all argue that the assumption that not one student would switch is wrong. Some children will certainly switch to private and religious schools, and to home-schooling. The questions are how many, and how fast.4
But, for a moment, let's ignore the potential savings of parental choice in education. What if not one student were to switch? The forecasts of the education establishment say that public funding for education wou ld have to be increased by something like 4 percent. Would this be too high a price to pay for fairness in educational funding, so that parents with strongly held religious views need not be forced to pay twice for education, once in taxes, and again in t u ition? Would this be too high a price to pay to insure that every American child, including those in our central cities, would have access to a good school, a safe school, a school where teachers send their own students? When you think of it this way, eve n if parental choice in education were to increase public fund- ing for education by a small amount, it would be money well spent. But it's obvious that parental choice will save tax money, not increase the costs of education borne by the taxpayer. Let's r e view the world of evidence regarding the responsiveness of primary and secondary school enrollment to economic incentives. First, let's look at public-private choice in other industrial de- mocracies. International comparisons are difficult to make becaus e of differences in the meaning of "public schools," because some public schools teach religion and others don't, and because of varia- tion in the level of financial support given private and religious schools. At one extreme, there is The Netherlands whe r e over 70 percent of the children attend indepen- dent schools, most of them being either Protestant or Catholic. The reasons why the private sector is so large in this country are: 1) that public schools are secularized; and 2) full funding is provided s c hools in the private sector. Most comparable to the Colorado and California parental choice plans are Australia, France, and the United Kingdom. In these countries, the public schools are more or less secular, and only partial support is given to private a nd religious schools. The sizes of the private sectors of these countries are given in @T table on the following page as 22 percent, 15 percent, and 26 percent, for an average of 21 percent. This average suggests that, with their proposed parental plans, t he private sector would more than double in Colorado and California. Therefore, the cost of extending financial aid to children in pri- vate and religious schools, and being home-schooled, would be more than offset by the savings that would accrue from th e transfer of children from the public sector to the private sector. Next, let's look at survey data. Parents of public school children indicate that, if they are given vouchers, transfers to the private sector may bi much higher. A 1982 survey conducted f o r the U.S. Department of Education found that from 23.5 percent to 44.6 percent of parents of public school children would be "very likely" or "somewhat likely" to transfer them to private and religious schools, depending on the size of the voucher. A 198 6 Gallup Organization survey found that a modest voucher would induce 27 percent of par- ents of public school children to transfer their children to private and religious schools. A recent poll conducted by the Reason Foundation of parents of public schoo l students in the Los Angeles school district found that 52 percent would take advantage of that state's proposed voucher. In Wisconsin, up to 53.4 percent would send their children to private or religious schools if it didn't cost them anything extra. Eve n the Carnegie Foundation survey, which must be considered4 In recent years the private sectors have grown in these countries, so the current average would be lager.
5suspect, found that 19 Parental Choice in Education in Selected Countries percent of parents of public school children Status of Religion Support for Students would transfer them to In Private Attending Plvate private schools. Public Schools Schools Schools These surveys indicate Australia Secular Partial 22% that the private sector Belgi u m Christian Full 51% /2 would at least double, Canada Varies Varies 50. and more probably triple France Secular Partial 15% in size with the im- plementation of a Colo- Oermany:. Christian Varies 1%,49/6 rado or California-type Ireland Christian Full 20%, 5 00/, voucher plan. Instead of Japan Secular -3 1%,280/c increasing the taxes re- Netherlands Secular Full 71% quired for primary and secondary education, United Kingdom Secular Partial 200/64 these proposals would United States Secular None 9% more Probab l y reduce I If two numbers, students in primary then secondary schools. the taxes required, and 2 Plus additonal students in "separate" public schools. certainly would not in 3 Partial support for senior high schools only. - 4 Plus 6 percent in non-support e d private schools. crease the taxes required. Source: 1988 World Education Encyclopedia. And, yet, while the cost of education borne by the taxpayer would probably go down, the total amount spent on educa- tion-public money plus private tuition-would cert a inly go up. This is because, with more variety, quality in the eyes of the customer will go up. With higher quality, people's willingness to spend on education will go up. To quantify the potential impact of parental choice in education, I developed a sim u lation model in which parents of varying incomes, and with varying preferences for private and religious educa- tion, with varying qualities of local public schools, and with versus without vouchers, choose be- tween public and private schools. I tried to make the parameters of the simulation model realistic, but of course there's no guarantee that the forecasts of the model will prove to be precise. The model's purpose is to illustrate what could happen with parental choice. With vouchers equal to half th e money spent per student in local public schools, my simulation model predicts that the cost of education borne by the taxpayer, including the cost of public schools and of the vouchers redeemed by those attending private and religious schools, will decre a se by 14 percent; and that the total spent on education, including public money and private tuition, will go up by 7 percent. These results reflect the responsiveness of private and religious school choice due to the change in economic incentives effected by the introduction of vouchers. How will these changes in enrollment come about? Will there be a massive and disruptive re-reg- istration of students currently enrolled in public schools? In some particularly awful public school districts this might happ e n. But if public schools are so bad that parents would-after their children have already begun their education-withdraw them from public schools and re-register them in private and religious schools, then it's about time that happens. But, by and large, p u blic schools are not so bad that parents would disrupt the education of their children that have already begun their education. Besides, unless the education establishment were to embrace the concept of re-chartering public schools, there are physical lim itations to quick expan- 6
sion of the private sector. The shift to private and religious schools will basically occur slowly over time, and in the absorption of growth by the private sector. This, in fact, has been the experience, in other countries. I n Holland, initial, partial support of par- ental choice in education was obtaine@d in 1889; and full support was obtained in 1920. These changes coincided with long-term, year-by-year growth of the private sector. From 1890 to 1920, enrollment in private schools in the primary grades increased from about 30 percent to about 40 percent. Then, from 1920 to 1940, enrollment in private schools in the primary grades further increased to about 70 percent. In the secondary grades, the shift to the private sector took longer, reaching about 70 percent in 1960. For a more recent example, in British Columbia, Canada, partial support of parental choice was begun in 1978. This support consists of per capita grants to qualifying private and religious schools amounting t o 30 percent of the per-pupil cost of public school instruction. Since then, private school enrollment has increased from about 4 percent to about 7 percent. In British Columbia, it took about four years for the cost of extending aid to students already i n private and religious schools to be offset by savings due to the increase -in the private sector. Since the private sector has continued to grow, implementation of parental support nowadays saves the taxpayers money. The charter school idea explicitly in c orporated into the California parental choice initiative, and which could be legislatively added to the Colorado initiative, has the potential of dramatically, and non-disruptively accelerating the switch of students from the public to the private sector. However, because this idea is so innovative, its impact would be impossible to forecast. That the United States Constitution has no explicit reference to the responsible freedom of parents to direct the education of their children reflects the innocence o f our nation, in this matter, at its founding. We had not yet eaten of the tree of the knowledge of state education. Until recently our public schools were locally controlled and financed, and incorporated the val- ues of the community. But, today, they ar e heavily bureaucratic, extensions of state as opposed to local government, and instruments of would-be social engineers. Other countries have constitutional-level protection of the family because they went through the essentially religious war we have onl y recently entered into, a struggle to determine to whom God has entrusted our children: to their parents, or to the state. From the attack on church schools conducted by the Third Republic in France, as well as by Bismarck's Kulturkampf in Germany,..to th e nationalization of schools by various socialist regimes in this century, to Hitler's dictum "this Reich will hand over its children to no one," those who wor- ship the state envy the authority of parents over children. But, as Moses said unto Pharaoh, af ter that king would have allowed the men of Israel to leave, "We will go with our young and with our old,. with our sons and with our daughters, with our flocks and with our herds will we go; for we must hold a feast unto the Lord."7