JFC Budget: Voucher Advocates Win Big

The education spending package approved after midnight on Tuesday by GOP members of the Joint Finance Committee removes the overall enrollment cap on the statewide voucher program, changes the way voucher payments in the statewide and Racine voucher programs are funded, and increases the per pupil payments taxpayer-funded voucher schools would receive in the expanded statewide, Racine and Milwaukee voucher programs.

The plan also creates a statewide special needs voucher program under which students with disabilities could attend private schools at taxpayer expense if they have been denied transfer into a public school under the state’s public school open enrollment program, beginning in 2016-17. Participating private schools would receive $12,000 per student each year. (The creation of special need vouchers will be covered further in a separate post.)

The statewide voucher program was created two years ago and is currently limited to 1,000 students. It allows students who meet family income thresholds (i.e., below 185 percent of the federal poverty level ) to attend participating private schools anywhere in the state at taxpayer expense.

The JFC package removes the cap on statewide participation in the program, but limits the total number of pupils who can participate from each public school district to no more than 1 percent of the district’s prior year enrollment. That cap would increase by 1 percent each year for 10 years, and then the limit would be removed entirely.

The JFC plan calls for funding voucher expansion by using a “money follows the student” approach long sought by voucher advocates.  Per pupil voucher payments in the statewide and Racine programs are currently fully funded from a separate state appropriation. The change converts the voucher funding to a system modeled on public school open enrollment.

In the new system, pupils entering the statewide or Racine voucher program in 2015-16 or thereafter (so-called “incoming pupils”) would be counted in their district of residence for general aid and revenue limits purposes. Districts will likely have to keep a separate tally of “incoming voucher pupils” who reside within their districts for revenue limit calculation purposes as these students would be fully counted by their school district of residence under revenue limits in the first year they participate in the voucher program and would no longer be counted following their last year in the voucher program.

Public school districts with “incoming voucher pupils” in either the statewide or Racine voucher programs that reside within their boundaries would have their general aid reduced by the total amount paid to voucher schools in those two programs in each year. If a district’s general aid payment is insufficient to cover the aid reduction, the balance would be reduced from other state aid (e.g., categorical aid) received by the district. (If those other state aid payments are insufficient to cover the aid reduction attributable to voucher pupils, the balance would presumably come from the state appropriation for tuition payments, although the motion is silent on this subject and does not increase that appropriation.)

The combined expansion of the statewide and Racine voucher programs is expected to cost $48 million over two years, which will eat into the increase public schools would otherwise receive.

Adding more students into the general aid formula calculations will cause distributional impacts. Districts with increased student counts will appear to have less property wealth per pupil and will therefore be entitled to more state aid.

Because the general aid appropriation is frozen in the first year (i.e., no new money is added) the result is a zero–sum game where the amount of the gains in aid by some districts will equal the amount of the losses by others. The likely losers will be rural districts in the northern, western and southwestern areas of the state where few voucher schools are located. School boards in these districts will likely be faced with the prospect of raising property taxes to offset the loss of aid due to voucher expansion (no print outs are available at this time).

Converting the funding of per pupil voucher payments to an “open enrollment” model will have the following three effects:

1) It will likely not cost the state any additional state dollars since the aid appropriations for public schools provide sum-certain (i.e., fixed-dollar) amounts (whereas expanding voucher enrollment while keeping a separate state appropriation would have required additional state dollars to be put into that appropriation);

2) It will mask the true cost of the voucher program by “washing” the dollars through the aid formula for public schools; and

3) It will set up a system where a child leaving a public school for a voucher school will take with them significantly more dollars (over $7,200 at the K-8 level and over $7,850 at the high school level) than if they left to go to a non-resident public school district through public school open enrollment (about $6,600).

The JFC’s action likely means that that ALL of the 2,613 students who newly applied for vouchers under the statewide voucher program next year will receive them. (Only 526 of those were currently public school students.) The total number of private schools in the statewide program will nearly double (to 90). All are religiously affiliated schools.

The WASB opposes the use of federal and state tax monies to subsidize nonpublic schools or nonpublic students/parents through a voucher system and opposes any expansion of vouchers in Wisconsin.