Voucher Cost Report Provides Useful Starting Point
While report on Milwaukee program sheds light on vouchers' fiscal impact, it omits discussion of important factors
EAST LANSING, MI (April 29, 2009)—A recent report finds that the Milwaukee voucher program offers a net savings to taxpayers in the state of Wisconsin but places a disproportionate financial burden on taxpayers in the city of Milwaukee. A new review concludes that the report offers valuable insights on the fiscal impact of voucher programs. However, it also questions the fiscal benefits and notes that the report omits some important factors essential to a more complete analysis.
The report, The Fiscal Impact of the Milwaukee Parental Choice Program, was written by Robert Costrell for the School Choice Demonstration Project at the University of Arkansas. It was reviewed for the Think Twice think tank review project by Dr. Clive Belfield of Queens College/City University of New York. Dr. Belfield is also co-director of the Center for Benefit-Cost Studies in Education at Teachers College, Columbia University.
Costrell’s report is an update of earlier work examining the funding formula of the Milwaukee Parental Choice Program (MPCP), which provides vouchers to low-income families in the Milwaukee Public School system to attend private schools. Since its inception in 1990, MPCP has grown into the largest district voucher program in the U.S., enrolling upwards of 20,000 students in private secular and religious schools in the current academic year, at a cost to taxpayers of $6,607 per student in 2009.
By comparing that cost to the projected cost of teaching those students in public schools—$9,462 for 2009—the report estimates a net public-sector savings of $37 million a year from the program. But, as Belfield notes, “the report also concludes that this net fiscal benefit is not allocated evenly.” Milwaukee taxpayers lose $45 million a year, while other property taxpayers save $52 million and state taxpayers save $30 million. So, while the end result is calculated as a $37 million gain, there are big winners and losers. Recent attempts to rectify the disparity by refining the state’s formulas for aid to the city school district have failed, the report concludes.
The new report “is a useful guide to the financing of the MPCP,” Belfield writes in his review. “It makes clear how the funding systems in Milwaukee and Wisconsin operate and how they interact to yield a net resource transfer from the city to the state.” Despite this strength, Belfield writes in his review, the report falls short in some key areas.
Its calculation of net taxpayer savings from vouchers assumes, based on only minimal evidence, that 90 percent of voucher students would have attended public schools without the voucher. Change that to 80 percent, however, and the savings fall, and if only 70 percent of voucher students switch from public schools—an assumption that isn’t unreasonable, Belfield notes—there are no net savings whatsoever. Thus, the report offers the precise number of $37 million in savings, but the true figure could be very different.
Furthermore, Belfield writes, the Arkansas report does not take into account two other factors: 1) school districts costs incurred in the service of voucher students, such as transportation and administrative expenses, which would further reduce any voucher savings; and 2) the question of whether the education of voucher students costs less on average than that of the public school students who stay behind -- because, for example, the students who apply for vouchers are less likely to require special education services.
“It is to the credit of this report that it makes clear the importance of analyzing the funding formula for vouchers in Milwaukee,” Belfield concludes. “However, it does not consider many of the possible policy ramifications for efficient and equitable implementation of voucher programs.”
Find Clive Belfield’s review on the web at: http://www.greatlakescenter.org
About The Think Twice Project
The mission of the Great Lakes Center is to improve public education for all students in the Great Lakes region through the support and dissemination of high quality, academically sound research on education policy and practices.
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