Milwaukee Voucher Program...
Milwaukee voucher program makes tuition overpayments,
new study finds: Costs taxpayers an extra $11 million in one year
From the People for the American Way Foundation
As the Milwaukee Public Schools have struggled to cut
programs and staff to close a $32 million budget shortfall for the upcoming
school year, new evidence has been uncovered showing that taxpayers are
footing the bill for millions of extra dollars in voucher payments to
private and religious schools.
This new information, released Wednesday (August 9,
2000) by People For the American Way Foundation, shows that a flaw in
the formula for setting the price for each school's vouchers has created
a loophole through which an extra $11 million in tax dollars flowed to
private and religious schools in the 1998-1999 school year alone.
On average, PFAWF found, payments to the voucher schools
amounted to a 40% markup above the actual tuition charged by the schools
to their self-paying private students.
Actual tuition overpayments varied from school to school.
In fact, in 22 voucher schools, the actual amount of the overpayments
was at least double the school's tuition rate.
The funding formula flaw creates a two-tier payment
system in which taxpayers are forced to pay a rate that is often significantly
higher than the tuition the schools charge to individual non-voucher students
to receive the exact same education.
"Wisconsin's funding flaw means that taxpayers are being
forced to pay first-class rates for coach seats," said Ralph G. Neas,
president of People For the American Way Foundation. "This creates a fundamentally
unfair system and we are urging the Wisconsin legislature to correct this
problem as soon as possible."
PFAWF's findings are contained in a new report, "The
40 Percent Surcharge: How Taxpayers Overpay for Milwaukee's Private School
Voucher Program," and are based on a detailed analysis of the Wisconsin
Legislative Audit Bureau report issued earlier this year.
The report notes that the flaw in the funding formula
does not occur in Florida's or Cleveland's voucher program, nor in Milwaukee's
privately funded PAVE program, but is peculiar to Milwaukee's publicly
funded private and religious school voucher program. Unlike the three
other programs, which use tuition figures actually charged by the participating
private and religious voucher schools to set voucher amounts, Milwaukee's
formula is keyed to another figure calculated by the schools, the "per-pupil
expenditure," which is often significantly higher than tuition.
In issuing its findings today, PFAWF emphasized that
its analysis does not suggest that there is any wrongdoing either on the
part of the private and religious voucher schools that receive the excessive
payments or the Wisconsin Department of Public Instruction, which disburses
the payments set under the state’s voucher law.
"The culprit here is not the schools or the agencies,
but a flaw in the law itself," Neas emphasized. "The issue comes down
to fundamental fairness."
The tuition overpayment that occurs under the state's
formula creates a kind of de facto subsidy for the schools, which allows
them to use the excess money from the tuition overpayment to supplement
or replace money ordinarily raised from other sources through various
grants or subsidies.
In the case of religious voucher schools, whose missions
are expressly religious and which are usually subsidized by their churches,
this subsidy raises serious constitutional issues. The report notes that
the average tuition overpayment to religious schools was $2,437 per voucher
student. If that excess money is used either to advance the school's religious
mission or to reduce the sponsoring church’s direct support to the
school, the subsidy is clearly supporting the advancement of religion.
In the case of both secular and religious voucher schools,
there is also the possibility that the excess payments can be used, in
a kind of "Robin Hood in reverse" fashion, to reduce tuition for non-voucher
students. Schools that used their excess in this way would thus be using
taxpayer money to circumvent the intent of the voucher law by subsidizing
the private and religious education of middle- and upper-income families
not eligible for voucher assistance.
"We don't believe that any schools are deliberately
or knowingly abusing the system," Neas said, "but there is clearly the
opportunity for abuse, whether by circumventing the state voucher law
or the Constitution. That's why we're urging the legislature to act now."
Posted August 9, 2000