Although parents are charged with the responsibility of making critical, even life and death, decisions concerning their children’s welfare, most Virginia parents are unable to make a true choice with respect to one vital aspect of their children’s lives. Their children are sent to a government-mandated, government- assigned, government-controlled educational institution. It was not always this way. Until fairly recently parents had much more control over the schools that their children attended. Their concerns were not filtered through layers of bureaucracy. However, the history of the public school system in American is one of centralization, consolidation, and standardization. It is perhaps not surprising that parents are searching for a way to regain control of their children’s education.

     School choice proposals in the form of charter schools, vouchers, scholarships, and tuition tax credits have sprung up all over the country. Charter school legislation has been passed in 34 states. Milwaukee has a long running voucher program in place. Cleveland and New York City also have voucher programs. Florida has just initiated a voucher program for schools that fail to meet stipulated educational guidelines. Tuition tax credit programs are in various stages of implementation in Arizona, Illinois, and Minnesota. The Children’s Scholarship Fund has made 40,000 scholarships available to low income students to attend the schools of their choice. In Virginia, charter school legislation was enacted in 1998, and tuition tax credit legislation was introduced in 1998 and 1999.

     But most Virginia parents are forced to take a passive role in their children’s education. The current near-monopoly school system has little incentive to satisfy parents because the only effective protest the parents can make is to withdraw their children from the system. Unlike almost any other business, this has virtually no effect because they leave their tax money behind. According to Albert Shanker, former President of the American Federation of Teachers, “It’s time to admit that public education operates like a planned economy, a bureaucratic system in which everybody’s role is spelled out in advance, and there are few incentives for innovation and productivity. It’s no surprise that our school system doesn’t improve. It more resembles the communist economy than our own market economy.”¹ Typically, it is only wealthy parents who can afford to pay twice for education, once in their taxes and again for tuition for private school.

The Universal Tuition Tax Credit (UTTC) proposal addresses all these concerns. Under the UTTC, parents would receive a dollar for dollar reduction in their Virginia State Income Tax liability for every dollar spent on tuition, up to a limit of one-half of the per pupil expenditure in the public school system, or 80 percent of the private school tuition, whichever is smaller. However, not just parents get this benefit. Individuals who pay others’ tuition would get the same tax credit. Corporations would receive a 100 percent tax credit for money donated to fund scholarships. Thus, students whose families are too poor to pay a significant amount of state income tax and who therefore could not take advantage of a tax credit, could nevertheless receive a scholarship funded by the UTTC.

Usually, it is only the well-to-do who can afford to buy houses in the neighborhoods with the best public schools. Only with the advent of school choice programs have ordinary parents been given the same options currently available to the rich.      Studies show that students who are allowed to choose their schools do better. A Harvard study of the Milwaukee voucher program showed that students in schools of their choice had significantly higher reading and math scores than the students who were eligible for vouchers but were randomly rejected because of space limitations. Similar results were found for the New York City voucher program.      A common criticism of school choice reflects a fear of “skimming” or “creaming” where only the best students move away, leaving behind the poorest performing and most difficult to teach children. Evidence from the Milwaukee Choice Program disputes this contention. Evaluation of the program revealed that many students who were performing poorly in the public school program found alternative educational opportunities where they were welcomed. The alternative schools apparently did not refuse to accept poorly performing students. It is possible that some of the students who are performing poorly in the public school today might flourish in the school of their choice. According to The New York Times, “A study of the longest-running experiment in Milwaukee suggests that vouchers can improve the prospects of the poorest and least prepared students.” 2      Vouchers and tuition tax credits are two ways to increase school choice. Under a voucher system, all students would receive vouchers for a specified amount of money good at any school, public or private. The school admitting the student would redeem the voucher for payment. Depending on the amount of the voucher, the student’s tuition bill would be partially or completely paid by the government. This system expands school choice in a simple and straightforward manner. However, vouchers suffer from the likelihood that governmental regulation will follow governmental expenditures. Also, parents receiving vouchers might be less interested in keeping costs down and taking part in the daily life of the school than parents who have to pay directly for their children’s education.

     The Universal Tuition Tax Credit (UTTC) proposal addresses all these concerns. Under the UTTC, parents would receive a dollar for dollar reduction in their Virginia State Income Tax liability for every dollar spent on tuition, up to a limit of one-half of the per pupil expenditure in the public school system, or 80 percent of the private school tuition, whichever is smaller. However, not just parents get this benefit. Individuals who pay others’ tuition would get the same tax credit. Corporations would receive a 100 percent tax credit for money donated to fund scholarships. Thus, students whose families are too poor to pay a significant amount of state income tax and who therefore could not take advantage of a tax credit, could nevertheless receive a scholarship funded by the UTTC.

     Our analysis indicates that the public school system in Virginia will lose not more than 10 percent of its students through migration to private schools and home schooling. This actually saves the Commonwealth an average of $6194 per student. Since the tuition tax credit is limited to half this amount, even if the state implemented the plan so that it was “fiscally neutral” (that is, with no net effect on the state budget), per pupil spending would increase. Also, this proposal has no effect on the local property tax. Thus, the amount of resources spent on education increases with no necessary increase in any government’s budget.

     This proposal obviously benefits those parents and students who take advantage of the tax credit to attend private school or home school. However, the students who remain in the public school system also benefit in three ways. They enjoy smaller class sizes and higher spending per pupil. Teachers benefit from having more independent schools bidding for their services. Also, there is evidence that the schools that lose students will make efforts to improve. When two new charter schools drained 745 students from the Lansing, Michigan school district, the district added a sixth grade to one of its best elementary schools and plans to pilot several new schools. Thus we expect that the public schools will respond to the competition and become more innovative and more concerned with customer satisfaction. The result is that all of Virginia’s parents and children will have more choices among more and better schools.

     The family is the fundamental unit for protecting children. Each day parents make critical decisions, even life and death decisions, concerning their children’s welfare. They choose what foods their children will eat and what vitamins they will take. They approve what medical procedures will be performed on their children. They decide with whom their children will play, how much television they will watch, and who will care for them in their absence. As their children grow, parents will help them decide which clubs to join, which sports to play, and which course of study to pursue. Eventually, the parents will help choose the right college or vocation.

     In spite of the fact that parents are entrusted with the power to make vital decisions in nearly every area of their children’s lives, most Virginia parents are unable to make a true choice with respect to one critical aspect of their children’s lives. Their children are sent to a government-mandated, government-assigned, government-controlled, educational institution.

     However, parental choice in education is appearing under a variety of plans. Charter school legislation has been passed in 34 states, in addition to the District of Columbia, allowing independent public schools of choice for parents. Other school choice initiatives have surfaced in 32 states.⁴ The U.S. Supreme Court has rejected consideration of a challenge to Milwaukee’s school choice program, which includes religious schools. The Arizona Supreme Court recently upheld the state income tax credit for contributions to private scholarship programs. The Illinois State House has passed tax credit legislation allowing parents to take a credit on state income taxes for 25 percent of tuition and other educational expenses, up to a maximum of $500. In Minnesota, families with an income of $33,500 and below are eligible for a refundable tax credit.

     In June, Florida Governor Jeb Bush signed into law the A+ Education Plan, containing the first statewide voucher program in the nation’s history. Opportunity scholarships worth roughly $4,000 will be offered to every student in a “failing” school. This year there are only four such schools in the state, but next year that number is expected to be over 150 due to tougher standards. ⁵ The Children’s Scholarship Fund has made available 40,000 four-year partial scholarships totaling $170 million to allow low-income students to attend their schools of choice. At the federal level, tax-free educational savings accounts have been proposed by Senators Paul Coverdell (R-GA) and Robert Torricelli (D-NJ).

     In Virginia, school choice initiatives have been matters of public interest for several years. In 1991, a study commissioned by the State Board of Education found broad support for the general concept of school choice for parents, especially when religious schools were included. In 1994, bills were introduced to provide grants to low-income families and to study vouchers, tax credits, and scholarships. Governor George Allen appointed a “Blue Ribbon Strike Force” in 1994, which recommended allowing parents the “maximum choice possible in the determination of the education of their children.”⁶ Virginia’s Commission on Champion Schools called for school choice in the form of charter schools, educational opportunity grants, tuition tax credits, and vouchers for students whose schools lose accreditation under Standards of Accreditation. Charter schools, proposed in 1994, were studied in 1995, debated in 1996, studied again in 1997, and finally approved in 1998.

     In 1997, the State Board of Education entertained presentations by groups supporting tuition tax credits in Loudoun and Rappahannock Counties. In 1998, State Delegate Jay Katzen (R-31) introduced a bill proposing a feasibility study of state or local tax credits for private school tuition. The Children’s Educational Opportunity Act of 1999 (H.B. 1740) was introduced in the House, with companion bill S.B. 866 in the Senate. This bill proposed tax credits for individuals paying childrens’ tuition or businesses making donations to organizations providing scholarships for private, parochial, or home-schooled children.⁷

     School choice has come to the forefront of the public interest debate concerning primary and secondary education. Across the nation, families are taking advantage of charter schools, voucher systems, scholarships, tuition tax credit plans, and other innovations providing for public and private school choice alter-natives to traditional government schools.

     Despite the lack of public schools, a majority of the population received at least some schooling. Educational historians note that literacy rates in the U.S. at this time were quite high in comparison with most other countries.8

     In the early part of the nineteenth century, the dual system of separate schools for the rich and poor came into conflict with the notion of equality of all citizens. This led to the growth of “common schools” where children of all the classes were taught. It came to be accepted that the common schools should be free and tax supported. By 1850, 45 percent of all children attended school, and half of all states had established school systems.⁹ The Civil War temporarily disrupted the growth of common schools in the North and severely slowed the development in the South, where very little tax money was available for public schools until the twentieth century.

     The post-Civil War period was also characterized by a dramatic growth in immigration. This influx of Irish and southern European immigrants caused a huge increase in the Catholic population. Although most of these immigrants were poor or working class, the Catholic Church initiated major school-building campaigns in response to concerns over the perceived Protestant and nativist bias of the emerging urban public schools.¹⁰ Eventually, each parish was required to provide schools for Catholic youth.¹¹ By 1884, there were 3000 Catholic parochial schools, and by 1910 there were more than 300 Catholic high schools in the United States.¹² In 1912, interviews with Catholic families living in Chicago’s stockyard district revealed that 90 percent of them sent their children to parish schools.¹³

     During the 1800’s, most rural elementary education was provided by locally run one-room schoolhouses, located so children could walk from home. Parents typically assumed that the school was theirs to control, despite state regulations, and not the property of the professional educator. In fact, if not in law, local school committees selected teachers who were subordinate to the community. Whatever authority the instructor had came from his or her personal characteristics, not from the position he or she held.¹⁴ Secondary education was provided primarily by private academies, which served the majority of students until late in the 1800’s, but were often subsidized in the form of scholarships or other aid from local governments.

     Community control of schools became a target in the late 1800’s of reformers who opposed non-graded primary education, instruction of younger children by older children, flexible scheduling, voluntary attendance, haphazard and capricious selection of teachers, and direct control of teachers by parents. The real problem, according to the reformers, was that people wanted to run their own schools, but did not know what was good for them.¹⁵ The National Education Association proposed the following remedies: consolidation of schools, transportation of pupils, professional superintendents of schools, separation of the school system from political oversight (“taking the schools out of politics”), and professionally trained and certified teachers supported by a bureaucracy that served as a buffer between teachers and parents. Interestingly, the impetus for reform rarely came from the community itself. It was exceedingly rare to find a local group advocating consolidation of local schools.¹⁶

     The goal of the reformers was a standardized, modernized school system run by professionals, and insulated from politics. It would be the “one best system” that would serve all students. Directives would come down from the professionally trained superintendent, while reports would be generated in the schools and move upward through the bureaucracy. Duties would be prescribed in detailed rules and regulations. Attendance would be compulsory. Students would be graded and promoted through a uniform course of study with standard examinations. Since grades and promotion depended on examination scores, which in turn depended on the curriculum, everything had to be structured and coordinated. According to John Philbrick, Principal of Quincy School in Massachusetts, “A good program for one city would be, in its substance . . . a good program for every other city.”¹⁷ In 1910, 70 percent of all school buildings were one-room schools. Between 1910 and 1960 the number of one-room schools fell from 200,000 to 20,000. At the same time, local financing of public schools fell from more than 80 percent to 50 percent. The decrease in local funding reflects a corresponding loss of local control.¹⁸

Direct control by parents became political control by local school districts and eventually remote control by professional educators isolated from parents by layers of bureaucracy.

It became important to the reformers that urban school boards, which had hitherto been large and politically determined, should be made smaller and more politically insulated. School boards should consist of a few “successful men,” similar to the board of directors of a corporation. In the 28 largest cities in 1893, there were 603 school board members, an average of 22 per board. By 1913, the number of school board members had shrunk to 263, for an average of ten per board. By 1923, the median size of a school board was down to seven.19

     The goal was to replace direct control of schools by the people with control by experts. Local public school boards, which were necessarily “political” and permeated with lay influence, were to be replaced with a corporate-style board of directors and a professional superintendent supported by a professional staff. In this way parental control was filtered through the bureaucracy. One way to encourage standardization and to reduce direct control by the local community was to increase the power of the state at the expense of the locality. The history of public schools in the twentieth century is the history of success of the reformers’ plans for public schools.

     The latter half of the twentieth century saw an increasing role of the state and even the federal government, further isolating public schools from direct control of the parents. By the middle of the twentieth century the battle over local control of elementary schools had been won by the reformers, who then turned their attention to the rural high schools. State authorities pointed out that many local high schools were poorly maintained, antiquated, and devoid of the amenities offered by larger urban schools. Unified and consolidated school districts would lead to larger, more educationally efficient high schools.

Local high schools were characterized as short sighted and unprogressive. However, from the point of view of the residents, the local high school was a focus of community life. Residents attended debates, listened to speeches, cheered the sports teams, and attended the graduation ceremonies. According to E.B. White, “The State Board of Education withholds its blessing from high schools that enroll fewer than three hundred students. Under mounting pressure from the state, the town organized a school administration district, usually referred to as a SAD. Sad is the word for it.... The closing of our high school caused an acute pain in the hearts of most of the townsfolk, to whom the building was a symbol of their own cultural life and a place where one’s loyalty was real, lasting, and sustaining.”20      The history of public education in America can be viewed as a continuous movement away from direct parental control. The school system evolved from wholly private schools to community based common schools playing a role very similar to private schools today and eventually to a system of governmentally mandated, governmentally assigned schools. Taxes collected by local, state, and federal governments are funneled back to the local schools through a political and bureaucratic maze. Direct control by parents became political control by local school districts and eventually remote control by professional educators isolated from parents by layers of bureaucracy. The public school system has become urban and professional. Individual and community influence has declined as state and national influence grew. Given this history of centralization, consolidation, and standardization, it is perhaps not surprising that at the end of the twentieth century parents are searching for a way to regain control of their children’s education.

Parents who are unhappy, for one reason or another, with the school to which their children are assigned have little power to effect change. The only truly effective alternative is to withdraw the student from the school system, since it is usually impossible to simply request that your child attend a different school in the same district. Should the parent choose to leave the school system, they must continue to subsidize the offending school through the tax system. There is little incentive to satisfy each parent.

     Parents who are unhappy, for one reason or another, with the school to which their children are assigned have little power to effect change. The only truly effective alternative is to withdraw the student from the school system, since it is usually impossible to simply request that your child attend a different school in the same district. Should the parent choose to leave the school system, they must continue to subsidize the offending school through the tax system. There is little incentive to satisfy each parent.

     Contrast this state of affairs with a private school, or almost any other business. If the customer is unsatisfied, he or she can take their business elsewhere. This is a powerful incentive for the business in question to do the best job possible. Imagine that some other product was provided in the same way as public education. For example, suppose there was a government fast food service called Public Burger, financed by taxpayers, and each neighborhood was assigned to a burger district. If you want a hamburger, you can get one at no cost at the local Public Burger. However, if you don’t like the service there, you must pay at McDonalds or some other franchise. The incentive for Public Burger is to provide hamburgers that are just good enough to avoid a large-scale voter rebellion. Individual consumers are powerless because the threat to take your business elsewhere is empty since you leave your tax money behind.

     Thus, parents are forced into a relatively passive role in the choice of their children’s education. If they want to send their children to a school other than the assigned school they must pay twice. Often it is only wealthier parents who are able to afford to provide a private education that is better than the assigned public school might provide. The only other way to choose your child’s school is to choose where to live. Home buyers with children frequently list the local school district as a primary consideration in deciding where to purchase a home. Again, wealthier parents are the ones most likely to take advantage of these opportunities because property values tend to be higher in the better school districts. Only with the advent of school choice programs have ordinary parents been given the options currently available to the wealthy.

     People make choices every day. They match the attributes of the products they consume with the cost of consuming those items. If a product is too expensive for the consumer’s appreciation of its characteristics, the consumer simply refuses to buy it. If enough consumers feel this way, the product disappears from the shelves. In this way inferior products are eliminated and superior products thrive. It is the primary reason that the quality of consumer products increases over time. Nearly all consumer products are better than they were ten or twenty years ago. Computers, VCR’s, televisions, and many other products get better and cheaper at the same time. Competition, reflecting consumer choice, is the force behind increasing product quality and cost reduction.

     On the other hand, if the decision making power is decentralized so that parents can choose the schools that their children attend, then schools will have to compete for support. Parents and students would choose the schools that best fit their needs. The schools that are left behind will be forced to improve. Each school will strive to satisfy its students and their parents. The competitive system provides the impetus for improvement. Schools, like any other business, will specialize in delivering the product for which they are best suited. The result is specialization as different schools satisfy different segments of the market, just as different manufacturers offer a variety of products to satisfy various segments of the market for consumer goods. Thus instead of a single system trying to satisfy everybody, parents will face a variety and diversity of schools that is difficult to even imagine under current conditions. The result is a better selection of better schools.

     Contrast the current state of affairs in elementary and secondary education with that of higher education. High school seniors face a wide array of colleges and universities from which to choose: public, private, secular, religious, technical, engineering, liberal arts, business, and many more. Financial circumstances, the student’s interests and background, his or her high school achievements, and many other considerations all play a part in determining the choice of higher education. The variety of institutions and programs reflects the variety of interests and abilities. No single governmental system could effectively weigh all these factors and be expected to satisfy all these students. Yet this is what the government does for children in primary and secondary schools.

     Government funding is available to aid students at public and private colleges and universities, even private religious colleges. Government subsidized loans and grants, as well as direct government aid, is available to schools of higher education. These subsidies all help students, especially poor students, make advantageous educational choices. At the same time, government prevents choice for the parents of elementary and secondary students.

     The public school system in America has served as a cohesive force in a heterogeneous society. It has a long and storied history as one of the fundamental forces fusing American society in the “melting pot.” It educates children not only in reading, writing, and arithmetic, but also in citizenship and civics. However, its successes do not necessarily imply that the only way to provide primary and secondary education is through a governmentally provided monopoly school system. Schools were private or community based during the nineteenth century. The public school system as we know it did not exist when much of American society was created by the melting pot.

     Another concern expressed by opponents to school choice is that such choice will discriminate against minorities and economically disadvantaged families. Experiments with school choice show that these fears are groundless. In the first four years of the Milwaukee Choice Program, 92 percent of all children using vouchers were African-American or Hispanic.²⁶ A survey of almost 4800 charter schools in the United States revealed that 63 percent of all students were minorities.²⁷ The attitude of minorities toward school choice might be gauged by the response of one mainstream black religious denomination. The 4-million member National Baptist Convention of America recently endorsed a Michigan school choice proposal.²⁸

Another concern expressed by opponents to school choice is that such choice will discriminate against minorities and economically disadvantaged families. Experiments with school choice show that these fears are groundless. In the first four years of the Milwaukee Choice Program, 92 percent of all children using vouchers were African-American or Hispanic. A survey of almost 4800 charter schools in the United States revealed that 63 percent of all students were minorities.

A study of New York’s School Choice Scholarships Founda-tion (SCSF) by Harvard University and Mathematica Policy Research, Inc., found that 4th and 5th grade students in the program scored significantly higher than a control group in reading and math. Because the SCSF scholarships were awarded by lottery, evaluators were able to conduct a natural experiment in which students were allocated randomly to the scholarship and control groups—thus controlling as much as possible for parental involvement and natural ability. The study also revealed that parents of scholarship recipients were more satisfied with the schools their children were attending than were parents in the control group.29      During the 1996-97 school year, the Cleveland Scholarship and Tutoring Program (CSTP) gave 1,996 students from low-income families scholarships to be used at any participating Cleveland private school, secular or religious. The scholarship covered up to 90 percent of a school’s tuition, up to a maximum of $2250, the balance coming from the child’s family or another private source. The maximum amount provided was little more than a third the per pupil cost of Cleveland public schools, which in 1997 was reported to be $6507. An evaluation of the program by the Program on Education Policy and Governance at Harvard’s John F. Kennedy School of Government finds that two-thirds of the parents of students attending schools of their choice are “very satisfied” with the academic quality of their school, compared to less than 30 percent of the parents of students who applied for a scholarship but remained in public schools. The evaluation also found that students who were enrolled in schools of choice had improved test scores.30

     Another Harvard study compared students in the Milwaukee school choice program with a matched control group of students who applied for admission to the program but were randomly rejected because of space limitations. By their third or fourth year in the program, voucher-school students had significantly higher reading and math scores than their counterparts still attending Milwaukee public schools. These results were achieved despite the fact that the vouchers were worth less than half the per-pupil costs of Milwaukee’s public schools, parents could not add their own money, and they could not be used at parochial schools. Consequently, most of the voucher students attended private schools which had limited facilities, poorly paid teachers, falling enrollments, fiscal difficulties, and no more than modest reputations. Despite these drawbacks, student achievement rose dramatically. The authors conclude, that if these results were replicated nationally, they “would close the gap between white and minority test scores by at least a third, possibly by more than a half.”³¹

This is not a question for me about Democrats or Republicans. It is really a question about whether or not we are going to continue to let every child die, arguing that, if we begin to do vouchers, if we do charter schools, what we in fact are doing is taking away from the public system. We say, let them all stay there. Let them all die. It is like saying there has been a plane crash. But because we cannot save every child, we are not going to save any of our children; we let them all die.36 The New York Times offers a similar observation: Democrats who had made careers as champions of the poor opposed the [school choice] plan, arguing that a solution that did not save every child was unacceptable. The Democrats got the worst of the exchange. They seemed more interested in preserving the public school monopoly than in saving at least some children’s lives [through vouchers.]37

The skimming argument is also logically flawed in that it requires the individual to forgo his or her own betterment for the good of the “system.” The argument would be considered absurd in any other context. For example, suppose the medical establishment objected to you sending your child to another doctor because doing so might endanger the funding of the local hospital?

     Opponents of school choice often argue that the best way to improve the existing school system is to simply spend more money on it. However, according to a recent study of education in Michigan, William Allen and Eugenia Toma find that spending more money, by itself, will not improve quality measured by graduation rates and dropout rates because neither are significantly affected by public expenditures per student.³⁸ In fact, most scholarly studies find that resources spent on schooling have no necessary relationship to student achievement; the school’s organization and management, not the amount of money spent, is the thing that really affects results. Therefore, as with many public issues, simply throwing money at the problem is unlikely to make it go away.

Studies show more inputs do not improve student performance
Input measure	# of studies	Studies showing positive effect	Studies showing negative or no effect
Teacher-pupil ratio	277	15%	85%
Teacher education	171	9%	91%
Teacher salary	119	20%	80%
Expenditure per pupil	163	27%	73%
Source: Eric Hanushek, "Assessing the Effects of School Resources on Student Performance: An Update," Educational Evaluation and Policy Analysts 19(2), Summer 1997, pp. 141-164.

How are teachers affected by school choice? More independent schools mean that teachers benefit from an increase in employment opportunities. Today, teachers face just a few school districts in their region. If they feel underpaid, overworked, or otherwise not appreciated, there are few alternative schools that might bid for their services. With greater choice for students among independent schools comes greater choice for teachers with respect to teaching opportunities. This can only rebound to the benefit of teachers who will face a diversity of potential employers, all of whom will be bidding for their services.      According to Arthur Levine, President of Columbia University Teachers College, “Throughout my career, I have been an opponent of school voucher programs. . . . However, after much soul-searching, I have reluctantly concluded that a limited school voucher program is now essential for the poorest Americans attending the worst public schools. . . . Today, to force children into inadequate schools is to deny them any chance of success. To do so simply on the basis of their parent’s income is a sin.”39

This is not a question for me about Democrats or Republicans. It is really a question about whether or not we are going to continue to let every child die, arguing that, if we begin to do vouchers, if we do charter schools, what we in fact are doing is taking away from the public system. We say, let them all stay there. Let them all die. It is like saying there has been a plane crash. But because we cannot save every child, we are not going to save any of our children; we let them all die. –Rev. Floyd H. Flake

     Finally, Patrick L. Anderson and his co-authors conclude, “The problems of our existing public education system - the increase of violence in the schools, the breakdown of communication between students’ homes and the school, the inconsistent level of graduating students’ basic skills - all point to an enervated, overburdened system that needs more than increased funding, administrative tinkering, or pedagogical experimentation. It needs wholesale change in which students and their parents can become an integral part of a new system -a dynamo of improvement.”⁴⁰

     While these proposals increase school choice, they ignore the wide variety of private schools that currently serve the educational needs of parents and students. Private schools are often noted for their efficiency and scholastic success. While not all private schools are better than all public schools, private schools located in urban areas are often islands of excellence in a sea of poorly performing and dangerous public schools. Why should parents be discouraged from choosing the best school for their children, even when that choice is a private school?

     Vouchers and tuition tax credits are two methods of increasing opportunities for parents who wish to choose an alternative school for their children without having to pay twice.

     Under a voucher system, all students would receive vouchers for a specified amount of money good at any school, public or private. The school admitting the student would redeem the voucher for payment. Depending on the amount of the voucher, the student’s tuition bill would be partially or completely paid by the government. This system expands school choice in a simple and straightforward manner.

     Opponents of vouchers raise several concerns. Critics argue that vouchers will drain resources from the public school system. Also, if some of the private schools are religious schools, then the separation of church and state is in question because the government would be making payments directly to religious schools.

     State regulation would almost certainly follow the expenditure of state funds in an attempt to ensure that taxpayer money is spent wisely. Such regulation is subject to political pressure and the public school interest groups may press the state to enforce regulations that interfere with the operation of the private school in question.⁴¹ Some private schools may object to the regulation and drop out of the system, thereby reducing the amount of choice that would otherwise be available. Finally, parents receiving vouchers will have little incentive to try to keep school costs down and may take less interest in the schools their children attend than parents who pay tuition.

     Traditional tuition tax credits address several of these concerns. Under this system, parents who home school their children or send them to alternative schools can deduct a portion of the tuition, dollar for dollar, from their individual state income tax. The parents themselves pay the school. The benefit is that they can reduce their state income tax bill by an amount, depending on the amount of the credit and the amount of their income tax bill, up to the full amount of tuition. A tax credit is not a deduction. For example, if a family owes $2000 on its state income tax and receives a $1000 tuition tax credit, then it only owes the state $1000 in income taxes. A tax credit reduces the tax bill dollar for dollar.

     Under a tuition tax credit, the state makes no direct payments to any alternative school. As the Arizona Supreme Court recently recognized, this means that there is no violation of the separation of church and state.⁴² Also, there is less pressure for regulation in that no state money is directly expended on the schools. There is much more incentive on the part of parents to force schools to keep costs low because it is the parents who pay for their children’s education. They are much more likely to insist on value for dollar than if the money went directly from the state to the school. They are also more likely to take an active role in their children’s education because they are paying the bills. The drawback to traditional tax credits is that such credits are not available to low and middle income parents whose state income tax liabilities are relatively small. This difficulty can be addressed by allowing businesses or individuals to receive an income tax credit by providing scholarships for poor students. In this way income tax credits benefit all parents of school age children, regardless of income.

     The universal tuition tax credit proposal is very simple. Any taxpayer, individual, proprietorship, partnership, or corporation, who pay the tuition for a Virginia child to attend an alternative school may claim a portion of the tuition paid as a credit against any state income tax liability. Only taxpayers who owe taxes can receive a credit. The credit is not refundable. That is, taxpayers who owe no taxes or who owe less in state income taxes than the allowable credit cannot receive a refund.

     The amount of the credit is limited in three ways. First, the maximum credit is limited to 50 percent of the average per-child expenditures in the public school system. In the 1997-1998 school year, the state average per pupil expenditure in Virginia was $6194. ⁴³ Thus, the maximum tax credit that would have been allowed in 1997-1998 is $3097. The tax credit is never to exceed half of the amount received per child by the public school system. Second, the tax credit is limited to a portion of the tuition paid. Third, the tax credit is limited by the taxpayer’s tax liability.

     To minimize transition costs, the UTTC plan will be phased in over three years. The amount of the credit allowed in the first year is 20 percent of the tuition paid (or home schooling costs incurred), rising to 50 percent in the second year, and topping out at 80 percent in the third year. If the student’s family falls below the federal poverty level, the full amount of the tuition is allowable up to the maximum of 50 percent of public school expenditures. Requiring parents to pay 20 percent of the tuition gives them a stake in their children’s education and they can be expected to put pressure on the schools to keep costs down.

     Individuals and businesses will be allowed the option to make tax credited payments to a nonprofit organization or foundation which would review scholarship applications and make disbursements. The existence of scholarship foundations saves businesses and individuals the administrative costs of providing scholarships to many children at several different schools.

     Counties and cities will not have their revenue reduced because the tax credit is applicable only to state taxes, which accrue to the Commonwealth of Virginia, not to local jurisdictions. The authority for localities to levy property taxes for schools will not be affected.

     • A single mother whose income is below the federal poverty level lives in the inner city. She would like to send her two children, who are performing poorly in the local public schools, to a nearby Catholic school that emphasizes academics and discipline. Under the universal tuition tax credit plan, a local business has established a scholarship plan for just such inner city kids. The company pays the tuition for both children to attend the school (at $2000 each) and takes a $4000 credit from its Virginia State Income Tax.

     • A couple would like to send their son to a public elementary school in a nearby school district which has an excellent Gifted and Talented program. However, the alternative school district requires an annual payment of $500 for out of district students. They pay the tuition and take an $400 tax credit from their Virginia Income Tax liability of $1200, paying only $800 in state income taxes.

     • Another family sends its two children to a Christian elementary school, with an annual tuition of $3000 each, for a total cost of $6000 per year. Their Virginia Income Tax liability is $2200. Their maximum tax credit is 80 percent of $3000, or $2400. Since they have two children in school, they may take a credit of up to $4800. However, since their tax bill is only $2200, they take a tax credit of $2200, and their after-tax tuition bill falls from $6000 to $3800.

     • A wealthy family sends its only child, Buffy, to the Briarfield Academy, a private school, with an annual tuition of $12,000. Since 80 percent of $12,000 exceeds the maximum allowable deduction of $3097, the family gets a tax credit of $3097, which reduces the annual tuition bill to $8903.

     • A software engineer with a new M.S. from Virginia Tech has several attractive job offers from high-tech firms in California, Massachusetts, and Northern Virginia. But due to the UTTC, the Northern Virginia firm can also afford to offer employees a scholarship program that will let her send her two children to the school of her choice. Her decision to remain in Virginia (and contribute to the Virginia tax base) benefits all concerned.

     Critics of school choice often claim that it will “destroy” the public education system. By this they might mean that large numbers of students will leave the public system and opt for private schools if they could afford them. This is not a vote of confidence in the existing public education system, but it is also almost certainly not true. The public school system has many fine schools with dedicated teachers and well performing students whose parents are more than satisfied. For the most part, public schools are conveniently located, and the bus system works adequately. However, the system would be improved if it merely faced a credible threat of migration. The reaction of the Lansing schools discussed above demonstrates as much. Any business strives to satisfy its customers rather than lose business to a competitor. Schools can be expected to be no different.

     How many students currently enrolled in the public education system in Virginia are likely to migrate to private schools under the UTTC plan? We estimate that, after the plan has been fully implemented, as many as 114,000 students in Virginia will migrate from public to private and home schools. This represents a migration of approximately 10 percent of the total public school enrollment, hardly a mass migration.⁴⁴

     Students who do not migrate from the public school system benefit in three ways. First, they receive the benefit of increased per capita expenditures on the part of their local jurisdiction. Second, there will be a reduction in class size. Third, as the Lansing School District demonstrated, their existing schools will try to improve in order to avoid losing even more students. All students will benefit from this plan.

     The benefits of the tuition tax credit have been enumerated above. Students and parents are allowed to attend the schools of their choice. Those students who choose to remain in the public school system get the benefit of smaller class sizes and higher per pupil expenditures. Federal, state, and local governments benefit by having fewer students to teach, reducing costs by $6194 for each student who migrates from the public school system.

     The costs of the proposal are slightly more complicated to estimate. The tuition tax credit would have two opposing effects on state finances. The credits would obviously reduce tax revenues, but they would also save taxpayer dollars by reducing public school enrollments. To assess the net effect, one must estimate how many people would take advantage of the credits, and how the credits would alter public school enrollment and costs.

     Tuition tax credits would of course benefit families whose children are already outside the public school system, but their full effect on the state budget depends on how they affect the schooling decisions of families currently using the public schools. By providing individual tax credits and scholarships, the legislation would lower families’ costs of private and home schooling. More families would take advantage of these options, reducing the public school system’s operating costs by reducing public school enrollments.

     Studies of parents’ schooling choices generally show that every 1 percent reduction in tuition leads to a 1.1 percent increase in private school enrollment.⁴⁵ The tax credit proposal would reduce the after-tax price of tuition by 100 percent for poor families and by a substantial percentage for middle- and upper-income families. As a result, we estimate that private school enrollment and the number of home schoolers will eventually double.

     Would corporations and individuals without children donate sufficient funds to make scholarships widely available? A tax credit for scholarships would reduce taxes by $1 for every dollar donated; a corporation would thus face a choice between paying its tax bill as usual or reaping some additional benefits at virtually zero cost by funding a scholarship program. Such benefits would include good public relations from sponsoring scholarships for poor children and the recruitment potential offered by a scholarship program for employees’ children. Individuals not employing the tax credit for their own children face a similar choice: they can pay their taxes as usual, or utilize the tax credit to guarantee that some or all of their tax dollars are spent on education. Most scholarly research on charitable giving has found that each dollar of government revenue lost due to favorable tax treatment of charitable contributions generates at least a dollar in contributions, and sometimes several dollars.⁴⁶ Therefore, it is highly likely that scholarships would be available for any family that wanted to utilize them.

     Appendix 1 to this study presents an economic analysis of the likely effects of tuition tax credits in Virginia. Principal results include the following.

1. Tuition tax credits would create substantial resource savings.

     Virginia’s public schools spent $6194 per student on operating costs in the 1997-98 school year, the most recent for which data are available.⁴⁷ This figure largely reflects costs of personnel, materials, and utilities; it does not include capital costs. The tax credit proposal would reduce public school enrollment by 112,420 students, rising to 113,912 students in the 2003-04 school year. This change would save the state and localities at least $656 million in operating costs annually.

     High-growth areas would reap additional savings as tuition tax credits reduced or eliminated the need to build new public schools in response to rising enrollments. For most high-growth jurisdictions, the projected drop in public school enrollments due to the tax credits is much larger than the projected change in enrollments over the next several years. In most other high-growth areas, tuition tax credits allow private schools to absorb a substantial amount, though not all, of projected enrollment increases.

     The table below shows the principal results of these calculations.

2. The cost savings would outweigh the revenues forgone due to the tax credits.

     The cost savings in the public school system would more than offset a state revenue loss of approximately $638 million in the first year and slightly more in subsequent years. The cost savings would exceed the revenue loss by approximately $18 million annually.

     To put this number in perspective, it is worth considering who would receive the tax credit and how it would influence their behavior. Approximately 102,200 Virginia students (10 percent) are currently in private schools or home schooled. Their tax credits would cost about $300 million, but would generate no new cost reductions because they are already saving the public schools money by opting for alternative forms of education. If these students were in the public schools and incurred the same per student cost as current public school students, the state and localities would have to spend an additional $595 million, in addition to the capital costs of expanding school capacity by 10 percent. Thus, the revenue loss associated with these students is still less than the state would have to pay if their parents decided to send them to public schools.

     The students who move from the public schools in response to the tax credit would account for the $656 million in cost savings. Their tax credits would generate the remainder of the state’s revenue loss - $334 million. The cost savings generated by these students are more than enough to pay for the tax credits for students who are already outside of the public school system.

     The cost savings would exceed the revenue loss because of the large disparity between private school tuition and public school operating costs. In fact, because the maximum tax credit is limited to 50 percent of per pupil public expenditures, the savings are virtually guaranteed due to the sensitivity of private school enrollments to changes in the after-tax price of tuition.

3. Tuition tax credits would increase resources for students who remain in the public schools.

     By reducing public school enrollments, tuition tax credits would allow public schools to focus more resources on the students who choose to remain in public schools.

     This could occur under a variety of scenarios. The state could choose to simply leave the entire $656 million worth of resource savings in the public school system, which would increase funding per student by a whopping $705 above the 1997- 98 level, to $6899. Alternatively, the state could pocket the share of cost savings that come directly from state funds, and expenditures per student would still rise to $6649. ⁴⁸ Even if the state kept a large enough share of the savings to completely pay for the tax credit, making the plan “fiscally neutral,” spending per student would still rise, from $6194 to $6249.

     This proposal obviously benefits those parents and students who take advantage of the tax credit to attend private school or home school. However, the students who remain in the public school system also benefit in three ways. They enjoy smaller class sizes and higher spending per pupil. Also, there is evidence that public schools that lose students will make efforts to improve. Thus, we expect that the public schools will respond to the competition and become more innovative and more concerned with customer satisfaction. The result is that all of Virginia’s parents and children will have more choices among more and better schools.

     Tuition tax credits affect the state budget in two ways: they reduce revenues, and they reduce public school operating costs by reducing enrollments. To estimate the size of both effects, we investigate how families will respond to the changes in the cost of tuition that the individual and corporate tax credits will create.

     Tax credits and scholarships substantially reduce the real, after-tax cost of tuition for families, and so our main task is deciding how much the proposal at hand would reduce this cost. Economic research has shown that each 1 percent reduction in the price of tuition leads to a 1.1 percent increase in private school enrollments.⁴⁹ The first step, therefore, is to estimate the percentage by which tuition tax credits will reduce the after-tax price of tuition.

     For low-income families (the 35 percent of Virginia families with children eligible for the school lunch program), the proposal effectively lowers the cost of tuition by 100 percent. This occurs not because of parental tax credits, for low-income people by definition are not likely to have much of a tax liability against which to take a credit. However, the legislation can be expected to generate a substantial amount of scholarship dollars contributed by corporations and individuals without children. Since the tax credit effectively lowers the price of giving to zero as long as the donation does not exceed the taxpayer’s state income tax liability, it is reasonable to expect that dollars will be available for any poor families who want to make use of scholarships. Most economic research shows that every dollar of government revenue lost due to favorable tax treatment of charitable giving generates at least a dollar of giving, and sometimes more.⁵⁰

     Calculations are somewhat more complicated for the remaining 65 percent of families. They have the opportunity to take a tax credit equal to 20 percent of educational expenses in the first year, 50 percent in the second year, and 80 percent in subsequent years. But their children are also eligible for scholarships, which should be plentiful for the reasons explained in the preceding paragraph. As long as this is the case, a fiscally conservative approach is to assume that these families too face a 100 percent reduction in educational expenses; this assumption likely overstates the cost of the tax credit.

     A 100 percent reduction in tuition should lead to a 110 percent increase in private school enrollments and home schooling. Combined with information on the number of nonpublic school students, this percentage allows us to estimate the number of students who will leave the public school system as a result of the tax credit legislation. Approximately 102,200 Virginia students are in private schools or home schooled. We assume that this number would, in the absence of tax credits, grow at 0.33 percent annually, the average projected annual growth rate in Virginia public school enrollment from 1997-2002. ⁵¹ Multiplying the resulting figures by 110 percent of the percentage change in after-tax tuition due to the tax credit yields an estimate of the decrease in public enrollment caused by the tax credits each year.

     Armed with this figure, we can now calculate the fiscal effects the tax credit. The Virginia Department of Education reports per pupil public expenditures, broken down by revenue source (local, state formula, state sales and use tax, and federal). Since these are largely variable costs, it is reasonable to assume that they will vary more or less directly with the number of students. (Even the elements of per pupil costs that might not change when a few students leave the system can surely change when enrollment changes by 5 or 10 percent.) Multiplying the decrease in public enrollment by various measures of per pupil costs gives us figures for cost savings in the various categories.

     Figures projecting the total number of nonpublic school students under a tax credit system allow us to estimate the effect on tax revenues. This calculation multiples an estimate of the average tax credit actually taken per student by the total projected number of nonpublic school students. Calculation of the average tax credit actually taken depends on several factors, including the percentage of educational expenses allowed as a tax credit, the size of the tax credit cap (equal to one-half of per pupil expenditures in the public schools), the average family’s income tax liability, the extent to which students are eligible for corporate-funded scholarships, and tax credit carryover rules. (A spreadsheet incorporating these elements is available upon request from the authors.)

     The table below shows the principal results of these calculations.

     These numbers serve as the basis for graphs presented in the text. Projected public school enrollment and cost savings come directly from the table. Enrollment reductions for high-growth jurisdictions are calculated by assuming that the enrollment reduction is spread uniformly across jurisdictions in proportion to their current total public school enrollments.

     Critics might argue that the preceding analysis contains some unrealistic assumptions. For example, scholarships might not materialize for all students who want them, and more of the tax credits might then be taken by families, who may have less ability to use the tax credit. As a result, the size of the behavioral response and the total cost of the tax credit might be different. The spreadsheet designed to calculate these estimates can also accommodate the much more complicated calculations that would be required if scholarships were restricted to low-income families, families received a smaller percentage tax credit, etc. To accommodate these possibilities, the authors conducted a sensitivity analysis to see how the fiscal impact varied in response to different assumptions about the design of the tax credit program. Copies of this additional analysis may be obtained from the authors.

     Average private tuition: Average figure for private school tuition in Virginia, K-12 grades. Source: Telephone survey conducted by Carlisle Moody, 1998. This is not a comprehensive survey, and the figure is not a weighted average. The most recent weighted national average tuition at private schools reported by the U.S. Department of Education is approximately $3100 (Susan P. Choy, Public and Private Schools: How Do They Differ? National Center for Education Statistics Document No. 97- 983, July 1997). This suggests that the $3300 figure is in the right range, and if anything would lead us to overstate the revenue cost of the tax credits.

     School children/family: The U.S. Census Bureau estimates that in 1997 there were 1,808,472 natural, adopted, and step-children living with families in Virginia. Of these, 1,191,736 were of school age — between the ages of 5 and 17 in Virginia. There were 837,772 families with children. This yields an average of 2.17 children per family with children, and 1.42 school-age children per family with children. (Source: http://venus.census.gov/cdrom/lookup/926002990).

     Family of 4 median income: Since Virginia families with children have approximately 2 on average, we use the most recent Census Bureau median income estimate of $57,050 for a Virginia family of four (1997) as a base for estimating the family’s Virginia income tax liability.

     Average taxable % of AGI: The first step in calculating the family’s Virginia income tax liability is to subtract deductions and exemptions. These average 22.5 percent of gross income, so 77.5 percent of gross income is taxable. (Source: Virginia Department of Taxation, Annual Report, Fiscal Year 1997, Table 1.2)

     Percent of low-income families: Percent of Virginia school children whose families have incomes at or below 185 percent of the federal poverty line. Source: David Wheat, Jr., Understanding Virginia’s Report Card: Why Standardized Test Scores Vary from One Community to Another (Springfield, VA: Thomas Jefferson Institute for Public Policy, November 1997).

     Middle-income credit percentage: Maximum percentage of tuition that non-low-income families can claim as a tax credit. Equal to 20 percent of tuition in the first year, 50 percent in the second, and 80 percent in the third and subsequent years.

     Private students: Number of students enrolled in private schools in Virginia in 1996-97. Source: Virginia Department of Education.

     Home schoolers: Number of students home-schooled in Virginia in 1996-97. Source: Home School Legal Defense Association.

     Home school cost: Average cash cost of $550. Source: Home School Legal Defense Association.

     Total per pupil govt. expenditure, local per pupil govt. expenditure, state per pupil govt. expenditure, sales/use per pupil expenditure, and federal per pupil expenditure: These are the Virginia public school system’s per pupil expenditures of funds from various government sources. Source: Virginia Department of Education, Superintendent’s Annual Report 1997-98, Table 15.

     Elasticity of demand: Demand elasticity is the economist’s measure of how responsive quantity purchased is to a change in price. The consensus of the scholarly economic literature is that the elasticity of demand for private education is approximately 1.1, which means that a 1 percent reduction in tuition will lead to a 1.1 percent increase in private school enrollment. Source: James D. Gwartney and Richard L. Stroup, Microeconomics: Private and Public Choice, 4th edition. New York: Harcourt Brace Jovanovich, 1983, p. 114.

     Actual and projected public school enrollments, high-growth jurisdictions: “Fall Membership Projections for Virginia and Its Public School Divisions,” data downloaded from web site of the Weldon Cooper Center for Public Service, University of Virginia.

1. Wall Street Journal, October 2, 1989.

2. “A Lesson from Milwaukee,” The New York Times, April 25, 1997.

3. This paper is based, in large part, on Patrick L. Anderson, Richard McLellan, Joseph P. Overton, and Gary Wolfram, The Universal Tuition Tax Credit: A Proposal to Advance Parental Choice in Education. Midland, MI: Mackinac Center for Public Policy, 1997.

4. Nina Shokraii Rees and Sarah E. Youssef, School Choice 1999: What’s Happening in the States. Washington, D.C. The Heritage Foundation, 1999. Available at http://www.heritage.org/schools.

5. CEO America, http://www.ceoamerica.org/legislation.html.

6. Rees and Youssef, http://www.heritage.org/schools/virginia.html, p. 2.

7. Rees and Youssef, http://www.heritage.org/schools/virginia.html, p. 3.

8. Jack High and Jerome Ellig, “The Private Supply of Education: Some Historical Evidence,” in Tyler Cowen (ed.), The Theory of Market Failure (Fairfax, VA: George Mason University Press, 1998), pp. 367-73.

9. John D. Pulliam, History of Education in America, Fifth Edition. New York: Macmillan, 1991, p. 66.

10. Jack High and Jerome Ellig, “The Private Supply of Education,” pp. 373-78.

11. This occurred earliest in some of the largest cities. In 1850, the Catholic Archbishop of New York declared, “Let parochial schools be established and maintained everywhere; the days have come, and the place, in which the school is more necessary than the church.” Vincent P. Lannie, Public Money and Parochial Education (Cleveland: Case Western Reserve University Press, 1968), p. 256.

12. John D. Pulliam, History of Education in America, pp. 96-97.

13. James W. Sanders, The Education of an Urban Minority: Catholics in Chicago, 1865-1883 (New York: Oxford University Press, 1977), p. 85.

14. David B. Tyack, The One Best System: A History of American Urban Education. Cambridge: Harvard University Press, 1974, p. 19.

15. David B. Tyack, The One Best System, p. 21.

16. The conflict over consolidation continues to the present day. In 1997, for example, the Westmore Citizens’ Association in Fairfax City urged neighborhood residents to vote against new property tax levies that would allow the city to close Westmore Elementary, a small school nestled on a residential street within walking distance of most students’ homes, and expand a school a mile away to handle Westmore’s students.

17. Quoted in David B. Tyack, The One Best System, p. 45.

18. John D. Pulliam, History of Education in America. pp. 120-125.

19. John D. Pulliam, History of Education in America, p. 127.

20. Quoted in David B. Tyack, The One Best System, p. 26.

21. National Center for Education Statistics, Digest of Education Statistics 1996 Table 125 available at http://nces01.ed.gov/NCES/pubs/d96/D96T125.html.

22. National Center for Education Statistics, Digest of Education Statistics 1996 Table 165 available at http://nces01.ed.gov/NCES/pubs/d96/D96T165.html.

23. John E. Chubb and Terry M. Moe, Politics, Markets, and America’s Schools. Washington, D.C.: The Brookings Institution, 1990, p. 4.

24. Wall Street Journal, October 2, 1989.

25. Patrick L. Anderson, Richard McLellan, Joseph P. Overton, and Gary Wolfram, The Universal Tuition Tax Credit: A Proposal to Advance Parental Choice in Education. Midland, MI: Mackinac Center for Public Policy, 1997, pp. 15-16.

26. Daniel McGroarty, Break These Chains, Rocklin CA: Prima Pub-lishing Co., 1996, p. 188.

27. Chester E. Finn, Bruno V. Manno, and Louann A. Bierlein, “Executive Summary,” in Charter Schools in Action: What Have We Learned? Indianapolis, IN: Hudson Institute, 1996, p.1.

28. David Mastio, “Baptists Endorse School Choice,” The Detroit News, July 7, 1998.

29. Paul E. Peterson, David Myers, and William G. Howell, “An Evaluation of the New York City School Choice Scholarships Program: The First Year,” PEPG98-12, Harvard University, October 1998.

30. http://www.ksg.harvard.edu/ksgpress/ksg_news/announcemts/peterson3.htm.

31. Do School Vouchers Work? Available at http://www.ksg.harvard.edu/taubman/edu/voucher1.htm.

32. McGroaty, Break These Chains, p. 192.

33. “A Lesson from Milwaukee,” The New York Times, April 25, 1997.

34. Hugh Calkins, “School Vouchers - A Middle View,” Education Week, September 11, 1996, p. 35.

35. Bill Johnson, “Powerful Baptist Council Leans Toward Favoring School Vouchers,” The Detroit News, April 20, 1997, p. 5B.

36. Congressional Record, October 31, 1997.

37. The New York Times, January 4, 1998.

38. William Allen and Eugenia Toma, A New Framework for Public Education in Michigan, East Lansing, MI, Michigan State University, 1996.

39. Wall Street Journal, June 15, 1998.

40. Patrick L. Anderson, Richard McLellan, Joseph P. Overton, and Gary Wolfram, The Universal Tuition Tax Credit: A Proposal to Advance Parental Choice in Education. Midland, MI: Mackinac Center for Public Policy, 1997, pp. 22-23.

41. Joe Loconte, “Paying the Piper: Will Vouchers Undermine the Mission of Religious Schools? Policy Review, January-February, 1999, No. 93. Available at http://policyreview.com/jan99/loconte.html.

42. Kotterman v. Killian, Arizona Supreme Court No. CV-97-0412-SA.

43. Virginia Department of Education, Superintendent’s Annual Report 1997-1998, Table 15.

44. See the analysis of the proposal in Appendix 1 below.

45. James D. Gwartney and Richard L. Stroup, Microeconomics: Private and Public Choice, 4th edition. New York: Harcourt Brace Jovanovich, 1983, p. 114.

46. See the research cited in James P. Angelini, William F. O’Brien Jr., and David G. Tuerck, Giving Credit Where Credit is Due (Boston: Beacon Hill Institute, Suffolk University), pp. 51-55.

47. Virginia Department of Education, Superintendent’s Annual Report 1997-98, Table 15.

48. This is approximately, though not precisely, what would happen if the state simply employs the current funding formulas to adjust payments to school divisions to reflect the change in enrollments. Because wealthier divisions receive less state money per student than poorer divisions, the effects will be somewhat different in different localities. Even in the poorest school divisions, per pupil spending will rise, because the locally-raised revenues will now be divided among fewer students.

49. James D. Gwartney and Richard L. Stroup, Microeconomics: Private and Public Choice, 4th edition. New York: Harcourt Brace Jovanovich, 1983, p. 114.

50. See the research cited in James P. Angelini, William F. O’Brien Jr., and David G. Tuerck, Giving Credit Where Credit is Due (Boston: Beacon Hill Institute, Suffolk University), pp. 51-55.

51. Calculated from figures in “Fall Membership Projections for Virginia and Its Public School Divisions,” data downloaded from web site of the Weldon Cooper Center for Public Service, University of Virginia.

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