Who Says Vouchers Wouldn't Work?

Vermont's been using them for years, but the debate goes on.

Tracy and Jesse Torregrossa are the children of a pharmacist in Dorset, Vermont, located in the southeastern part of the state. This fall, Tracy started her senior year at Proctor School in New Hampshire, and Jesse began his third year of high school at Hebron Academy in Maine. Meanwhile, in the northeast corner of Vermont, Anna McClaughry is reading Shakespeare in the fifth grade at Riverside School, located in an old farmhouse near Lyndonville.

Proctor School, Hebron Academy, and Riverside School are all private institutions. There's nothing unusual about that. What is unusual about the education of these three children is that their families live in Vermont school districts that in effect offer tuition vouchers to some or all of their pupils. The Dorset School District pays about a third of the private-school costs for the Torregrossas, and the town school district of Kirby pays the entire $1,750 annual tuition for Anna McClaughry's schooling.

This is extremely unusual in the United States, and it's more than a little ironic. Washington bureaucrats, Chicago free market economists, Harvard sociologists, and teachers-union officials from New York to California have argued for years over the idea of education vouchers, even seeing a much-ballyhooed but ill-fated "voucher experiment" come and go in the 1970s. Meanwhile, students in almost 100 Vermont towns have quietly received education vouchers from their local school districts, just as their parents and grandparents did before them.

Now Vermonters have never used the word voucher to describe what happens there, and some state officials were kind of skittish about a reporter coming around and asking questions. Nevertheless, long before the rest of the country had ever heard of the idea, many Vermonters were benefiting from a system whereby the local government uses tax monies to pay for education rather than to provide it.

Early Vermonters, like all New Englanders, placed great value on the education of their children. Vermont's 1777 constitution—the oldest state constitution still in force—provided that "a competent number of schools ought to be maintained in each town unless the General Assembly permits other provisions for the convenient instruction of youth." Citizens then undertook to found private academies to educate their sons and daughters. People's Academy in Morrisville, Bellows Free Academy in Fairfax, and Burr and Burton Seminary in Manchester are typical survivors from this early era.

As the idea of universal taxpayer-supported education took hold in the first part of the 19th century, the future of these local academies was questioned. Should the local school district finance a new public high school, thus dooming the local private academy? Or should the district simply pay tuition to the private academy, which would serve the purposes of a local public high school?

Since the prominent civic leaders of most Vermont communities had themselves graduated from local private academies, they usually exerted their influence against putting the school out of business by creating a new public high school. Taxpayers also were generally averse to the idea, since it was obviously cheaper for the school district to pay tuition for their children than to assume the capital costs of creating a whole new school. And so it became a tradition in many Vermont towns simply to have the taxpayers pay for the town's children to attend the local private academy. Where there was no private academy, the local school district created and supported a public high school or joined with nearby towns to create union districts. In a few cases, like Townshend's old Leland and Gray Academy, the private school was converted into a public high school.

Vermont's experience was not unique. Headmaster James Steenstra of the Gilbert School in Connecticut says that, beginning in the early 1800s, local governments throughout New England financed the education of school children at private academies. Today, vestiges of the system remain in three towns in rural Connecticut (Norwich, Winsted, and Woodstock) and at least three towns in Maine (Lee, Blue Hill, and Dover-Foxcroft).

Today 95 of Vermont's 246 towns have no public high school and do not belong to any of the state's 27 union high school districts. State law authorizes the school boards of these towns to designate a high school and to pay the full tuition for any local student to attend it. If a school district does not designate a high school, it must pay on behalf of any town pupil, to any approved high school in or out of the state, a tuition amount equal to the average Vermont union high school tuition ($2,675.67 in the 1983–84 school year). If tuition at the chosen high school exceeds that amount, the school district may choose to pay the full amount, but because of taxpayer pressure this is rarely done. The parents must chip in the difference.

Even if the local school district designates the local private academy as the town's high school, it may still be possible for parents to enroll their children elsewhere with voucher support. The town of, Lyndon has a strict policy. It has designated Lyndon Institute as its high school and stoutly resists parents' request to send their children elsewhere. The reason cannot be economic, for the Lyndon Institute tuition is slightly above the state union average. The school board seems to believe that all local students simply should attend the local high school. On occasion, presented with a very strong argument, it has relented, but more commonly it will deny appeals. The state Board of Education has upheld the denials.

St. Johnsbury, nine miles from Lyndon, has the opposite policy. Rather than designating St. Johnsbury Academy as the official high school, the authorities allow parents to choose any approved school. But of the 419 high-school-age students in the district last year, 401 did attend St. Johnsbury Academy. Seventeen chose other nearby schools; only one student attended private school away from the area (in Connecticut). Since St. Johnsbury Academy's tuition is $465 above the state union average and the district chooses to pay the entire tuition, one would think that taxpayer pressure would encourage parents to select alternative schools—but this does not seem to be the case. St. Johnsbury Academy, with an excellent scholastic and athletic reputation, has long been the preferred choice of local parents. It also has a boarding department for approximately 40 additional students from elsewhere.

The Manchester-Dorset area, where the Torregrossas live, has a relatively high-income, well-educated population, famous for expensive summer homes and country clubs. According to state records, the two towns together had 344 high school pupils last year. Of these, 299 attended Burr and Burton Seminary, a nonsectarian private academy located in Manchester. Three attended public high schools in Vermont or nearby New York. Seventeen chose private schools elsewhere in Vermont. The remaining 15 attended out-of-state private schools from Phillips Exeter to Lawrenceville to Miss Porter's School. One of them ranged as far afield as Ketchum School in Idaho. To each school the Manchester or Dorset school district supplied a check for $2,480.20, the state-designated average for 1982–83. This covered 25–35 percent of the tuition, room, and board costs for such high-class private academies. Parents, of course, made up the difference.

Barre Town, a blue-collar rural area surrounding industrial Barre City and Vermont's famous granite quarries, presents an entirely different picture. Of the 594 high school pupils in Barre Town last year, 521 attended public high school in Barre City. Another 72 went to public high schools in nearby towns, presumably for geographical reasons. Only one went to a private secondary school in a nearby town.

There is an important limitation on the voucher system. Payments can be made only to nonsectarian private schools approved by Vermont's Department of Education. This at once leaves out the state's three Catholic high schools and one fundamentalist Christian school. The department maintains a list of approved schools, which includes most of the established private academies in New York and New England. When parents propose to send a child to a school not on the list, the department will investigate. For well-established schools, a call to the department of education in the other state may suffice. In some cases the Vermont department will dispatch a field investigator. According to department officials, in one recent case the school was not approved, and the parents, informed of the reasons, chose another private school. Ordinarily, there is some presumption that parents who can ante up $5,000 above the value of a voucher should have some idea of what they are buying.

My own town of Kirby, population 285, is one of about 25 Vermont towns that has a voucher system for all grades, not just for high school. Kirby, which reached its peak population of about 500 in the late 19th century, once had six separate school districts. In living memory there have been five operating one-room schools in the town. In 1978 the townspeople voted to close its last school, which had only 11 pupils in grades one through six. (Although there are enough children in the town to support a one-room school, their geographical distribution means that there is no convenient place to locate such a school.)

So, since 1978, taxpayers have paid the full tuition for Kirby's grade-school children to attend school in adjacent towns (and at least the state union average for high-school pupils). The town continues to pay for two school buses to transport most of its pupils to the schools of their choice, although some must arrange their own transportation.

Among the available schools is Anna McClaughry's. Three years ago a private grade school in Newark, 18 miles from Kirby, closed its doors when the proprietor decided to take a sabbatical. Some of the suddenly unemployed teachers and the parents of the pupils founded Riverside School, located on the Kirby side of nearby Lyndon. The school offers instruction in grades 5–8, emphasizing literacy, the mastery of traditional subject matter ("social studies" has been banned), French and Latin, environmental appreciation, and computer knowledge. In contrast with most public middle schools, three of its six teachers hold degrees from Yale, Harvard, and the Sorbonne.

Five of the "orphan" Kirby pupils are attending Riverside, their full tuition of $1,750 paid by the taxpayers via the Kirby school board. (Parents of the remaining 21 pupils, who come from towns that maintain public grade schools, must pay the tuition themselves.) Headmaster Richard Koehne told REASON that he is very pleased to have the Kirby pupils, noting that the town's voucher system creates more potential customers for his school. "We especially like having kids come from Kirby on the voucher plan because it broadens our student body mix," he says. "Otherwise, we would have only children of parents who could afford the tuition on top of the property taxes they pay to support the public schools."

While Vermonters, unbeknownst to the rest of America, have been carrying on their voucher-like tradition, a debate about vouchers has been part of a growing movement in the country to change public policy so that more parents will have a meaningful choice about their children's education. The reason for this movement, as Harvard law professor Charles Fried aptly summarized recently in the New Republic, is that "many individuals are deeply dissatisfied with the public education system and the network of union and political alliances that make it particularly hard to change."

Parents have traditionally had the option, of course, of sending their children to private schools. This option was threatened in Oregon early in this century when the state legislature passed a law requiring attendance at government-operated schools. Fortunately, that law was struck down by the US Supreme Court in 1925. Justice James McReynolds, speaking for a unanimous Court in Pierce v. Society of Sisters, declared that "the fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the state to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the state; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations."

The Pierce case ended the legal threat to the existence of private schools, but parents who desired private education for their children have still faced the problem of cost. There is no exemption or rebate from the various taxes used to support public education. And thus nonpublic education has been the province either of the affluent, who can afford to pay both bills, or of parents whose church—notably the Roman Catholic and Lutheran—has managed to offer parochial schooling at less than its true cost.

The double burden is not insignificant. The Census Bureau figures that total expenditures for elementary and secondary schools in the 1980–81 school year had to be funded by $444 in taxes per man, woman, and child in the United States. So a couple with two children was paying $1,776 in taxes to support the public school system that year, regardless of whether their children were actually attending government schools. If a family chose to send their children to private schools, they would pay, in addition, around $400 a year for church-affiliated elementary schools and $1,500 for other private elementary schools; private high schools cost even more.

In the late 1940s, the hierarchy of the Catholic Church made a serious push in Congress for government aid to parochial schools, triggering a spirited church-state controversy that ended in the proposal's defeat. Over the next 20 years, however, a new proposal emerged from three quite different quarters. Called the "tuition voucher," it provided for government grants directly to parents, who could then use the proceeds to purchase education for their children from the school of their choice, whether public or private.

An early and eloquent advocate of tuition vouchers was free-market economist Milton Friedman. In 1962, in his influential Capitalism and Freedom, Friedman stood the time-honored argument for public education on its head. Do public schools produce a healthy mix of rich and poor, black and white, etc.? Perhaps in the days of the small town with only one school, but not with the rise of populous urban and suburban areas that are economically and racially stratified. A poor black urban family, Friedman pointed out, could possibly save its money and buy the same fancy car owned by a well-to-do white suburbanite, without also buying a fancy house in the suburb. But it was highly unlikely that the black family could afford to send its children to first-class schools located far away from the lower-income black neighborhood. (And a recent study by the National Institute of Education suggests that, after two decades of efforts at integration, minority parents are in the same position today.)

How could a system widely regarded as incompetent, over-costly, and perhaps unjust be most improved? Some people favor an end to all state involvement in education, but that is "outside the range of political feasibility today," Friedman wrote in a 1973 New York Times Magazine article. In an essay published in 1955, however, Friedman first wrote of vouchers, saying that they would "give competition and free enterprise greater scope" and "pave the way for the gradual replacement of public schools by private schools."

For most of America this was a startling new idea, but Friedman's proposal was close to the system already in place in some Vermont districts. He would have local school boards provide parents of every school-age child a voucher for an amount equal to the average cost of educating a child in the local government schools. The parents would "be free to spend the voucher and any additional sum they themselves provided on purchasing educational services from an 'approved' institution of their choice," Friedman explained a few years later in Capitalism and Freedom. "The role of government would then be limited to insuring that the schools met certain minimum standards, such as the inclusion of a minimum common content in their programs."

Friedman emphasizes that parents should be able to use their vouchers in both private and government schools, whether in the school district or not, if the schools are willing to accept the children. This, he argues, would give parents real freedom of choice, encourage healthy competition among schools, and inject a market standard for teachers' salaries.

Nothing came of Friedman's proposal at the time, but others began to think along the same lines. Christopher Jencks, a liberal professor of education at Harvard University (now at Northwestern University), advocated a voucher system as early as 1966. In 1970 he argued that vouchers could meliorate the plight of black children in underfunded and ineffective ghetto schools. Since despite a decade of civil rights agitation and progress, it did not appear that black schools in white-dominated cities would ever be brought up to the level of the better white schools, Jencks favored vouchers to allow blacks to attend the white schools instead of the schools nearest their homes.

Meanwhile, a few Catholic educators were warming up to the voucher idea. Unlike the earlier proposal to divert tax monies directly to parochial schools, the voucher plan ostensibly subsidized parents, just as the post–World War II GI Bill had subsidized students. It would then be immaterial whether the parents cashed their vouchers with parochial schools or nonsectarian private schools or public schools. Inasmuch as the earlier GI Bill had stimulated a wave of trade schools created expressly to relieve veterans of their GI Bill dollars, this contention was somewhat transparent; but the movement still grew.

During this period, however, the opposition was far from asleep. Advocates of public schools saw that a movement toward vouchers would threaten their effective government monopoly over education. Local school boards and superintendents didn't like the proposal. Teachers unions particularly opposed the idea, it being easier to organize a relatively small number of large public-school systems than a large number of small private schools. In addition, as Friedman had argued, the teachers recognized that a real marketplace for education would mean competitive pressure to hold down their salaries. So the National Education Association and the American Federation of Teachers began to allocate substantial resources to heading off the voucher scheme.

Indeed, vouchers probably have no more passionate enemy than Albert Shanker, president of the American Federation of Teachers. For years, Shanker has written a column published as a paid advertisement in the New York Times, and several have been devoted to lambasting vouchers.

In 1971, Shanker wrote, "The greater the free choice granted by a voucher plan, the more will the educational interests of poor, black and difficult children suffer." (Never mind that "poor, black and difficult children" under the current system are ordinarily the ones with the least possibility of affording private alternatives to inferior government schools.)

"Our public schools…are designed to keep our society together," he opined in 1979. "Vouchers are designed to use tax money to pull our society apart." (Never mind that the all-important purpose of schools is educational, not social, and that in this purpose they have by wide agreement failed miserably.)

And in a 1980 column: "There would be competition among schools in much the same way as there is now competition among toothpaste companies, auto manufacturers and department stores. Some enterprising schools might offer gifts to newly enrolling students in much the same way that savings banks offer such gifts to new depositors. Or…students might be offered rewards for enrolling their friends!" (Never mind that precisely such competition has resulted in largely satisfied toothpaste, auto, and department store customers.)

Shanker and his teachers union colleagues were first mobilized by a voucher study conducted in the late '60s under Christopher Jencks's direction at the Center for the Study of Public Policy in Cambridge, Massachusetts. The authors of the study endorsed education vouchers; but unlike the simple Friedman plan, theirs included a number of special restrictions on the vouchers. For example, they recommended that local government agencies be given a mandate to:

—establish higher voucher payments for poor and mentally handicapped students;

—regulate schools' admissions and expulsions policies ("one critical notion in our report was that a voucher school should admit nearly everyone who wanted to attend, space permitting," Jencks recently told REASON); and,

—forbid parents to pay any tuition out of their own pockets to supplement their children's vouchers.

The Nixon administration's Office of Economic Opportunity (OEO), still populated with a number of Great Society bureaucrats, had supported this study. Bolstered by rhetorical support from Friedmanite libertarians, OEO began in 1970 to look for a test site for a voucher experiment. But when they broached the idea in Seattle, San Francisco, and Rochester, they ran into a buzzsaw of opposition.

Those who favored racial integration opposed vouchers because they saw in them a way out for white students, not a way in for blacks. The more OEO tried to contend with their objections, the more the anti-integration forces shied away from the idea. Church-state separationists were put off when Catholics supported the plan. Local superintendents and board members began to view the whole scheme as causing far more trouble than it could possibly be worth, especially in view of the continuing necessity for taking in enough revenues to meet long-term fixed costs for school plants. Teachers unions, as usual, were strongly and actively opposed.

Vouchers' best chance came in New Hampshire, which had no racial-integration problem and a governor and state board of education chairman who were ardent free-marketeers. They prevailed on the Nixon administration to offer New Hampshire a "free market voucher," considerably less restrictive than the "regulated compensatory voucher" urged by Jencks and the OEO liberals. Fortified with ever-increasing federal funding, OEO and the state finally got five school districts to plan for a test—until the teachers' unions let loose their adamant opposition, and all five districts backed down.

Finally OEO found a test site, Alum Rock School District, a largely lower-middle-class and lower-class area in San Jose, California, with one of the lowest assessed property valuations per student in the state. After lengthy negotiations between the agency and school district officials, a three-year demonstration project was established in 1972.

It was set up to include 6 of the district's 24 public schools. Under the plan, 22 "minischools" were formed at the six participating schools. Eleven of the minischools emphasized general basic academic skills, while various others emphasized reading, math and science, fine arts, cross-cultural learning, and learning basic academic skills through practical everyday activities.

In the spring, each school would plan its minischool programs for the next year, and descriptions of all the district's minischools were compiled and sent to parents along with voucher forms. For each child, parents indicated on the voucher form their first three choices of programs and of schools where the programs were being offered. Each student had a spot guaranteed at his or her neighborhood school ("squatter's rights"). When there were not enough spaces in a minischool to accommodate all the applicants from outside the neighborhood, the available spaces were rationed out by lottery.

A "compensatory voucher" allotment addressed a worry of Jencks and his colleagues that in a voucher system, teachers and schools would want to teach middle-class and wealthy children while ignoring poorer children. To create a greater incentive for minischools to teach poor children, the voucher amount for Alum Rock students who were eligible for the federal school-lunch program was 30 percent higher.

"Alum Rock can show the way," the Los Angeles Times announced in 1973. They spoke a bit too soon. On the whole, the Alum Rock experiment proved to be a fiasco. A Rand Corporation study in 1974 found that in every voucher school, in all grades but one, students fell behind in achievement while students at Alum Rock's nonvoucher schools essentially held their own. Robert Klitgaard of Rand called it "one of the starkest downward effects I've ever seen."

But the Alum Rock project was hardly a test of the voucher idea. From the start, the experiment's design was far removed from an authentic voucher plan. For one thing, private schools were effectively excluded. They were technically eligible for vouchers but had to comply with a host of district regulations concerning teacher certification, curriculum standards, student discipline, and more. For that reason, no private school ever actually received a voucher.

Also, the minischools' admissions and expulsion procedures were heavily regulated, so they had none of the freedom that private schools have to enforce strict educational and conduct requirements. Moreover, schools were given enrollment ceilings. Thus, the schools that offered the best programs, by parents' lights, could not expand to accommodate more students, and the schools in lesser demand inevitably enrolled the overflow from the more sought-after schools. Moreover, in stark contrast to a competitive market situation, teachers who garnered few students were guaranteed a salary on the OEO payroll, while good teachers whose reputation or teaching competence attracted more students would not be rewarded with higher salaries.

Mercifully, the entire Alum Rock experiment ended in 1975. Not a single school district in the country followed its example.

As dismayed voucher advocates examined the results of Alum Rock, many were worried that this bad imitation of vouchers would be taken to reflect on vouchers generally. Certainly, confirmed voucher opponents seized on Alum Rock to try to discredit vouchers. Voucher arch-enemy Albert Shanker crowed in the aftermath, "The washout serves to remind us that panaceas sold to the public rarely work in practice."

But Shanker and company were not entirely successful. An infrastructure of intellectual and academic support for vouchers continued through the 1970s and into the '80s. The idea today is kept alive partly by the efforts of the Education Voucher Institute (EVI), a think tank in Ann Arbor, Michigan, whose executive director is University of Michigan professor William Coats.

As in the beginning with free-marketeer Milton Friedman and liberal Christopher Jencks, support for vouchers over the years has come from across the political spectrum. On the right, William F. Buckley argued for vouchers in his book Four Reforms; sociologist Edward Banfield endorsed them; and in the past, the Young Americans for Freedom has made vouchers a high priority.

On the left, liberal and radical advocates of education reform such as John Holt, Nat Hentoff, and Jonathan Kozol—and, less enthusiastically, politicians like Sen. Daniel Patrick Moynihan (D–N.Y.)—have come out in favor of vouchers.

Nat Hentoff, columnist for the Village Voice and the Progressive, is typical. In a 1972 magazine article, he wrote about choosing schools for his own children. "I did visit our local public school," he recalled. "The children there were being treated like automobile parts on an assembly line. So my four children are in four different private schools, because each learns in a different way."

He continued, "If I were not able to afford those four tuitions, my children would be compressed into the single mold the public school chooses for all children, and at least two of them might well have dropped out by now.…Why not allow for some real democratic pluralism in public education by ending that monopoly through making public independent education also possible? Consider the range of choice that would then be available to parents now restricted to the monopoly system."

Hentoff recently told REASON that he still supports vouchers if they are given to schools that do not discriminate on grounds of race, sex, etc., and if they are not given to church-related schools.

Politicians have generally been skittish about the issue of vouchers. Few doubt that it has a lot to do with the political pull of the two big teachers' unions, the National Education Association and the American Federation of Teachers.

Vouchers found a desultory champion in Ronald Reagan. While governor of California, Reagan called for vouchers in his 1972 "state of the state" message. Voucher legislation was introduced, but disappointed supporters in the legislature complained to the Los Angeles Times that Reagan "gave the measure little support," and it died in committee.

Last spring, the Reagan administration proposed giving local school districts the option of converting their federally funded Title I program (billed as supplemental education services for educationally disadvantaged children) to a voucher system. A bill was drafted by the administration and sponsored by Rep. John Erlenborn (R–Ill.), but history may be repeating itself. After a single day of House subcommittee hearings, the legislation faded away, and the administration has reportedly done little to promote it.

There is one state government where vouchers may be getting a fair hearing. Rep. John Brandi (D) has introduced a bill in the Minnesota legislature to provide vouchers worth $1,475 per pupil for low-income families. The vouchers would be good at any school. Minnesota's Democratic governor, Rudy Perpich, is reportedly "committed to the market-based system" in education but has not yet endorsed the legislation (see Trends, Aug. 1983). Minnesota has already instituted a tax deduction for education expenses, and the measure survived a legal challenge on church-state grounds when the Supreme Court recently upheld its constitutionality.

Elsewhere, voucher advocates who have not met with success in state legislatures have turned in some instances to the ballot referendum. The first major campaign of this sort was in 1978 in Michigan, which lost by 59–41 percent.

Perhaps the most ambitious campaign came in California two years later. John Coons and Stephen Sugarman, two liberal Berkeley law professors, drafted a ballot initiative that would have set up a two-part voucher—a base amount allocated for all students no matter what their family income and a supplementary amount proportional to their family income.

Coons and Sugarman's "Family Choice Initiative," as it was called, was hotly debated in late 1979 and early 1980. As could have been predicted, the state's educational establishment was bitterly opposed. Wilson Riles, then the state superintendent of public instruction, stormed, "The idea is crazy.…I see chaos [if it passes]." In the face of this opposition, the initiative was unable to gather sufficient signatures for ballot status.

An interesting coalition of liberal and conservative Californians believe the time may now be ripe for another attempt at the ballot box. Roger Magyar, a Republican Party activist and state official during Reagan's administration in Sacramento, and Leroy Chatfield, a former United Farm Workers organizer and the manager of Jerry Brown's 1976 presidential campaign, have put together an organization called Parents Choose Quality Education. Their voucher plan has won the endorsement of Milton Friedman, and they hope to win sufficient signatures for placement on the June '84 primary ballot.

There has been a dramatic increase in popular support for vouchers in the last few years. Indeed, 1983 was the first year in which a majority of Americans in a national survey expressed support for education vouchers. A Gallup Poll conducted last June indicated that 51 percent of Americans would like to see a voucher system adopted in this country; 38 percent would not, and 11 percent had no opinion. The favorable responses were up from 43 percent in 1981 and 38 percent in 1971.

The youngest group surveyed—people 18–29 years old—were most in favor of vouchers (60 percent for, 29 percent against, 11 percent no opinion). And blacks at the grassroots level are even stronger in their support (64 percent for, 23 percent against, 13 percent no opinion). Yet many veteran civil rights leaders are adamantly hostile, because a variant of vouchers was briefly used in the South by local school boards and state governments during the 1950s to try to stave off school integration.

Likewise, despite the strong support among Catholics for vouchers (63 percent for, 29 percent against, 8 percent no opinion)—not to mention the fact that some 3 million youngsters are attending Catholic schools in 1983–84—the US Catholic Conference has never taken a public stand for vouchers. Individual priests and bishops have supported the idea, but they have no solid institutional backing.

Roger Magyar told REASON that in California, church officials are apprehensive that a voucher system might exclude parochial schools, either from the beginning or later at the behest of a court ruling. Meanwhile, the American Civil Liberties Union is against vouchers for the opposite reason: it's worried that a voucher system would include parochial schools. Burt Neuborne, legal director of the ACLU, told REASON that the organization is opposed to vouchers on Establishment Clause grounds (the constitutional provision that "Congress shall make no law respecting an establishment of religion").

The irony here is that civil libertarians should be a natural constituency for vouchers. After all, government-run schools routinely trample on the civil liberties of families who disagree with the way their children are educated.

Clearly, the popular support for vouchers in this country has survived and prospered without nurturing by the political establishment. One can only conclude that parents' alienation from the current state monopoly in education is very strong indeed. So while economists propose and teachers unions dispose, the mass of parents out there may well come to consider education vouchers as natural as generations of smalltown Vermonters have found them.

John McClaughry, formerly a senior policy advisor in the Reagan White House, went home to Vermont in 1982, where he runs the Institute for Liberty and Community "way back in the woods." This article is a project of the Reason Foundation Investigative Journalism Fund.

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Lessons from Abroad

The principle behind vouchers—privatizing decisions on where and how children are educated—is firmly established to varying degrees in several countries. Estelle James, chair of the economics department at the State University of New York at Stony Brook, told REASON that in a number of countries, including France, Great Britain, Norway, and India, governments finance part or all of children's education in nongovernmental schools. However, no other systems are as close to the voucher idea as in the Netherlands and in British Columbia.

James did a study of the Dutch system for the Institution for Social and Policy Studies at Yale. She observed that the Dutch arrangement, in existence since the late 19th century and codified in the nation's 1917 constitution, is "much like a voucher system, with strings attached."

Each family gets a voucher that is equivalent in value to the per capita cost in the local public school. It must be spent on education. The school that receives the voucher is then entitled to funding to cover specified amounts of teachers' salaries and other expenses.

It is not exactly a free market. The private schools' right to raise and spend funds as they see fit is limited. According to James, schools have some discretion to charge parents ancillary fees in addition to the voucher, usually between $100 and $200 a year. A new law took effect last year saying that parents' failure to pay ancillary fees cannot be grounds for excluding a child from a private school—but this is expected to have little effect, since most schools traditionally waived ancillary fees for low-income families.

There are other state regulations. For example, the central government pays all teachers' salaries directly, and these salaries are determined by fixed schedules based on education and experience. Schools may not supplement these salaries.

Such intrusions may be substantial, but James observed that private schools in the Netherlands still have wide latitude to operate very differently from government-run schools. And some 70 percent of Dutch parents send their children to private schools, indicating that private schools are preferred by consumers.

In discussions with parents and educators, James discovered a widely held belief that private schools:

—"are more personal [than public schools] and responsive to parental wishes,"

—"spend funds more effectively and use their fees to secure better facilities," and,

—"label their ideology ahead of time, so parents know what they will be getting, in contrast to public schools which ostensibly have no ideology except that which the individual teacher adopts."

Secular private schools certainly exist in Holland, but about 95 percent of voucher-eligible schools are church-related, most commonly with the Dutch Reformed, Calvinist, or Catholic churches. It is relatively easy to start a voucher-eligible private school in Holland. The 1920 Law on Education requires only that parents of a specified number of students join together in a formal organization and request a school with a specific religious or pedagogical philosophy. Currently, the minimum number of participating families varies from 50 in the smallest municipalities to 125 in the largest.

In British Columbia, a voucher-like system has been in place since the 1977–78 school year. Only six years old, it is less extensive than the Dutch system but is considerably closer to free-market principles.

As in the Netherlands, there is no voucher form per se. At the end of each school year, British Columbia's independent (private) schools that qualify receive aid directly proportional to the number of students they have enrolled. But unlike the Netherlands, there is no government regulation of teachers' salaries nor of participating schools' right to charge parents additional tuition and to solicit contributions.

There are two groups of independent schools eligible for support. A school in the first group needs to meet relatively lenient standards: adequate facilities, three years in operation as a nonprofit society (equivalent to a nonprofit corporation in the United States), and no programs that "promote or foster doctrines of racial or ethnic superiority, religious intolerance or persecution, or social change through violent actions."

A school in this group receives, for each of its pupils, an amount equal to 9 percent of the average operating costs per pupil in the public schools. The independent school can then use these funds for "peripheral services" such as student transportation and textbooks.

The second group of schools must comply with more stringent regulations governing curriculum, pupil testing, program assessment, and teacher certification, in addition to the first group's qualifications. However, it receives, for each pupil, 30 percent of the average operating costs per public-school pupil (that 30 percent was $954 in 1982–83).

The provincial government is very straightforward about the rationale for the aid program. Education Minister Jack Heinrich wrote in an open letter last September that it "relieves taxpayers of costs far in excess of the subsidy [the schools] receive."

The current student population in British Columbia is 487,000, according to a ministry official. Of these, 23,500 are attending the province's 140 independent schools that receive aid (another 6,000–7,000 are in independent schools that don't qualify for aid—mainly fundamentalist Christian schools).

The aid plan's enabling legislation in 1977 sparked considerable controversy. The relatively conservative ruling party, the Social Credit Party, was supportive, while the socialist New Democratic Party was generally opposed. Now, however, a ministry official notes that "people are treating it as permanent." Even the New Democrats, who are out of power, have pledged to retain the program if they win office.

Statistics indicate that the aid program is working quite well. As might be expected, learning assessments comparing the independent schools to the public schools consistently indicate the independent schools' superiority. But it's also interesting that the average family income of independent-school students is slightly lower than the provincial average, probably because of the heavy representation of urban working-class Catholics. This has been somewhat embarrassing for early critics of the aid program who claimed that it smacked of elitism.

Another interesting phenomenon: Stephen Easton of Simon Fraser University, an expert on aid to private education, told REASON that although hard figures aren't available, he has observed a migration of teachers from the public school system since the voucher law was passed. Apparently they're turning entrepreneur and setting up independent schools despite the lower level of government funding there.

"When people in the United States talk about vouchers," Easton told REASON, "they're thinking of Alum Rock. If they want to see a real experiment with vouchers, all they have to do is to look right across the border."

—Paul Gordon

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Vouchers or Credits?

One of the strongest advocates of education vouchers, Milton Friedman, argues that they will "pave the way for the gradual replacement of public schools by private schools." But many other supporters of free-market education disagree. Worrying that a voucher system might foster even greater intrusion on individual liberty than the present system does, they argue instead for education tax credits as a better way to move in the direction of privatizing education.

While some advocates of the voucher say it would reduce government control over education and foster diversity in schools, tax-credit advocates suggest that a voucher system could in fact have the opposite effect. They reason that to be eligible for voucher reimbursement from the government, private schools that are now virtually free of regulation would probably have to submit to a number of new governmental strictures.

Even some of the most modest regulatory schemes in proposed voucher systems would exclude parochial schools and racially discriminatory schools. But other, more ambitious voucher plans contemplate government regulation of private schools' admission and expulsion policies (some would deny private schools much latitude to reject or expel students), tuition schedules, curriculum, teacher qualifications, and faculty salaries.

Tax-credit advocates argue that under any voucher plan, there would be immense political pressure from school boards and teachers' unions to make schools satisfy a long list of requirements to be eligible for vouchers. To the extent that those would-be regulators were successful, a reform aimed at reducing state power in education would ironically extend it to private schools where it has been minimal or nonexistent.

Supporters of tax credits also note that with a voucher system, some taxpayers would still be forced to subsidize the education of other people's children, even more so than now. Indeed, the tax burden would probably be increased, since costs would be incurred for families of private-school students who are now paying their own way. And, as with the present system, small families and single people would bear a relatively large share of the tax burden compared to benefits received.

Thus, short of complete government withdrawal from the education industry, tax credits are often seen as a reform with greater potential than vouchers. There have been several versions of such credits, but the one that would offer the most freedom from government would be patterned on two recent initiative proposals in Washington, D.C., and California. These versions have three features that make them distinct from a proposal currently favored by the Reagan administration.

First, government authorities would be explicitly prohibited from imposing rules and regulations on schools in the name of tax credits.

Second, a credit would be allowed for paying the educational expenses of any student, whether related to the taxpayer or not. The credit would thus be available both to individuals and to corporations. Any taxpayer could easily help finance the education of a friend or some needy youngster who would otherwise have no opportunity to elect to attend a private school. This plan also opens up new opportunities for corporate giving as well as for employee benefits.

Finally, to avoid snags arising from First Amendment issues of church-state separation, credits would be allowed for payment of students' educational expenses at either private or government-run schools. With this feature, a carefully drafted tax-credit measure would be likely to survive challenges in court, under the authority of a 1983 Supreme Court decision upholding a Minnesota statute providing for state income-tax deductions for educational expenses at any school.

A credit could have other significant advantages over vouchers. It would implicitly recognize that taxpayers' money is their own, to be spent when and where they see fit. It would not require a coerced governmental transfer payment, as a voucher does. And practically, there would be far less rationale for government's policing schools that receive private contributions as opposed to government reimbursement.

Free-market defenders of tax credits usually agree that a voucher system would be an improvement over the status quo. They do contend, however, that an educational tax credit would be less vulnerable to statist depredations. In a free society, education should ultimately be provided on a fully privatized basis. A well-designed tax credit seems to them best calculated to move us in that direction.

—Manuel S. Klausner