Financing the Milwaukee School Voucher Program.

School vouchers have recently become a hot topic of discussion amongst politicians and pundits seeking to overhaul the public school system. But what is often left out of the debate is any discussion of the financing necessary to send students to private schools. This article highlights how Milwaukee funds its voucher program and the mechanics of the system there.

Editor's note: The Government Finance Officers Association, the publisher of Government Finance Review, takes no position on school vouchers. This article is intended to be informational for readers and should not he construed as an endorsement of the program.

Since the 1990-91 school year, the state of Wisconsin has provided state tax dollars in the form of vouchers to low-income parents in the City of Milwaukee to send their children to participating private schools in the city at no tuition charge. The Milwaukee Parental Choice Program (MPCP), as the voucher program is referred to in state law, has grown from seven private schools, 300 FTE voucher students and $0.7 million in 1990-91 to 103 private schools, an estimated 9,200 FTE students and an estimated $49 million in the 2000-01 school year as shown in Exhibit 1. The table also shows that the maximum voucher amount has increased from $2,446 per student in 1990-91 to $5,326 per student in 2000-01. It should be noted that FTE equals full-time equivalent and is a smaller number than the headcount of students in the program; for example, there were 9,638 students enrolled in September 2000 compared to 9,123.4 FTE students. Voucher students enrolled in four-year-old kindergarten programs are counted as 0.5 FTE and voucher students in five-year-old kindergarten programs are counted from 0.5 FTE to 1.0 FTE depending on the length of the program. Voucher students in grades 1-12 are all generally 1.0 FTE students.

When it was enacted in 1990, the MPCP was the first publicly funded voucher program in the nation. Since then, the state of Ohio in 1995 established a voucher program in the City of Cleveland and the state of Florida in 1999 established a statewide voucher program that allows students in failing public schools to take vouchers to any school that accepts them. However, the Milwaukee program continues to be by far the largest of the three programs in the number of participating schools and students and the maximum amount of the voucher at its current $5,326 per student. The Milwaukee program is on the most solid legal ground of the three programs due to the fact that the Wisconsin State Supreme Court upheld the current program in June 1998 and the United States Supreme Court did not take the case on appeal. In Cleveland, there were 3,761 students receiving vouchers up to $2,500 to offset tuition at private schools in 1999-2000 and an unknown number in 2000-01 before a federal appeals court ruled the use of pub lic funds to send children to parochial schools violated the First Amendment. In 1999-2000, 96 percent of the voucher students in Cleveland were enrolled in sectarian schools. That decision is being appealed to the U.S. Supreme Court, while the current students are allowed to continue in the program for the remainder of this school year. If the high court were to rule the Cleveland program unconstitutional, that decision would likely apply to the Milwaukee program as they are similar programs in many respects. Meanwhile, in the 1999-2000 and 2000-01 school years the Florida program provided vouchers for 57 students from two failing public schools to attend private sectarian or non-sectarian schools at state expense.

Background: Milwaukee Education

It is important to understand Milwaukee and its education system in the late 1980s to understand the dynamics that led to the establishment of the voucher program. This discussion relies in part on John Witte's book on the Milwaukee program entitled The Market Approach to Education: An Analysis of America's First Voucher Program and published in 2000.

While the noted economist Milton Friedman first described the modern idea of educational vouchers in 1955 and a brief federal experiment with public school vouchers occurred in the Alum Rock, California, school district in the 1970s (Bridge, 1978), as of the late 1980s, there had not been a publicly funded voucher program for private schools implemented anywhere. Meanwhile, Milwaukee was changing dramatically in economic, racial, and educational terms, which set the stage for the grass roots support for the idea of a voucher program in the late 1980s. Some figures reflecting those changes are as follows: