The Edgewood voucher program: some preliminary findings.

• Author: Merrifield, John
• Position: Edgewood District of San Antonio, Texas; school voucher system

In 1998, a unique voucher program began in the Edgewood District of San Antonio, Texas. Unlike the other privately funded programs, the Children's Education Opportunity (CEO) Foundation will pay the full tuition of virtually every nearby private school. Unlike the other U.S. voucher programs, nearly every student is eligible. (1) As a result, the program could significantly raise private schools' market share. The stakes are high. Since nearly 80 percent of the school district's funding comes from the state on a per pupil basis, the Edgewood District suffers a large revenue loss per student departure; perhaps more than the cost reduction per student departure (Texas Education Agency). (2) In other words, the marginal cost avoided when a student uses a voucher to enroll in a private school may be less than the per pupil state funding. The unusually high stakes raise the probability that the voucher program will prompt changes in district policies, either because of competitive pressures or budget cuts.

Unlike other U.S. voucher programs, the Edgewood program establishes the nearly universal choice that is a key element of the genuine competition that virtually everyone agrees would significantly alter the K-12 education system. This article compares the Edgewood program to a competitive education system with low entry barriers, market-determined prices, and a critical mass of informed, mobile consumers, and to the other U.S. cities with prominent voucher programs. In addition, it identifies key issues for further research and tentatively assesses some of the program's early results.

Background

In 1955, and again, more prominently in 1962, Nobel Laureate Milton Friedman urged policymakers to allocate government funding of K-12 education through a universal voucher program. He argued that the profit motive and the resulting competition would invigorate schooling practices. With the surging civil rights movement and the 1957 launch of the Soviet Union's Sputnik satellite, which highlighted the woeful science and math skills of U.S. high school graduates. Friedman's reform proposal drew considerable attention. The strongly worded 1983 Nation at Risk report (National Commission 1983), and disappointment with previous reform efforts, provided an additional surge of interest. The voucher idea appealed to conservatives eager to scale back the size of government and "liberals" concerned about the especially serious plight of children from low-income families (Jencks 1966; Singal 1991; Viteritti 1999: 55). But it was not enough to prompt the implementation of even highly restrictive, distant cousins of Friedman's proposal until 1990 when Milwaukee offered vouchers to approximately 1,000 low-income families.

Additional distant cousins now exist in Cleveland, Florida, and Colorado, and in various cities through private funding. Because those programs cap participation at a tiny fraction of the student population, they can only transfer a few children among existing schools within a little changed school system. Commentators, including many academic scholars and prominent school choice advocates, frequently overlook that critical limitation and hype even modest escape-hatch programs as insightful experiments (Merrifield 2001: chap. 3).

Milwaukee and Cleveland have the oldest publicly funded voucher programs. Both programs limit participation to a small fraction of the city's low-income families. For example, starting with Milwaukee's 1998-99 program expansion, the maximum number of vouchers rose to 15 percent of enrollment, still far below the number of low-income families. The expansion added church-run schools to the eligible schools, but the demand for private school seats still exceeds the supply. The Milwaukee program contains other competition-killing rules. Private schools cannot cash vouchers unless they accept them as full payment. In other words, the law bans private co-payments. The effect is the equivalent of price controls. Since taxpayers support public school users at nearly twice the level of a voucher user, the co-payment ban also ensures that private schools must operate with a major funding disadvantage. In the 2002-03 school year, the Milwaukee Public Schools spent $10,228 per child, while vouchers were worth up to $5,783 (American Education Reform Council 2003). During the years the widely known studies were under way, schools could not start up just to serve voucher users. Each private school had to enroll mostly non-voucher students. Still, many prominent choice advocates said the alleged experiments would tell us whether any voucher program, even parental choice in general, would work. Such assertions mistakenly assume that even restriction-laden programs would unleash market forces, or that school choice programs would have the same general effects whether market forces were present or not (Peterson 1997; Shlaes 1998; Wall Street Journal 1998, 2000). The vast majority of remaining school choice advocates did not publicly object to the misleading rhetoric.

Those restriction-laden programs were vulnerable to criticism no matter what the test score data said about the voucher users. School choice opponents said parental choice was a "failed reform" whenever the voucher users did not appear to achieve test scores well above the scores of the unsuccessful voucher applicants. When voucher users did achieve statistically significant gains, choice opponents said it didn't matter because the programs only affected a fraction of the student population. (3)

Florida's program allows only low-income families to use vouchers, and only after their children endure a low-performing public school for at least two years. A public school earns the low-performing label by getting a failing grade in two of four consecutive years. Like the Milwaukee program, the Florida vouchers are worth about half the sum that supports each public school user, and private schools must accept them as full payment. In Florida, tax dollars support a preferred private alternative only after the government formally certifies its own failure and only if the private alternative seems likely to do better with only half the money spent at the failed public school.

The original Friedman proposal demonstrates that voucher programs are not necessarily limited to a fraction of the students (see Friedman 1955, 1962, 1998). But few, if any, analysts acknowledge that. Opposition to broader programs and school choice advocates' propensity to support restriction-laden programs are the reasons why so few students participate in the publicly funded voucher programs.

The Unique Edgewood Program

The Edgewood program makes that district's school system America's most competitive K-12 education market. Only low-income families are eligible, but there is no numerical cap. Nearly 100 percent of the district's residents qualify, so it is a nearly universal voucher program. However, there are still noteworthy limitations: possible program expiration in 2008 is a potentially significant entry barrier; low-income eligibility will probably limit product differentiation and price movement effects; and the public schools still have a large funding advantage.

In the year before the voucher program began (1997-98), taxpayers spent $5,820 per Edgewood public school child. In 1998, a voucher was worth up to $4,000. (4) In 2001-02, Edgewood spent $6,729 per child, and the largest voucher was worth $4,700. Private schools can charge voucher users more than the voucher amount. Unlike the private schools in Milwaukee and Florida, Edgewood private schools do not have to accept a voucher as full payment. But the low-income eligibility...