School Choice vs. School Choice

Policy Backgrounders | Education

No. 155
Friday, April 27, 2001
by John C. Goodman and Matt Moore


Choice Outside the Housing Market: Types of Choice Programs

Privately Funded Voucher Programs

As an alternative to rationing educational opportunity through the housing market, parents, school boards and public officials around the country are seeking other ways of exercising choice. The following is a brief description of the models in use.

Public School Choice. Under public school choice, parents have options that are restricted to public schools. For example, 33 states have open-enrollment laws of varying degrees that allow students to attend public schools outside their home district, and 18 states make open enrollment mandatory.17 [See Figure I.] Charter schools are another popular type of public school choice, but most of the charter school activity is concentrated in a handful of states. For example, five states accounted for 57 percent of the 2,069 charter schools operating in the U. S. last fall: Arizona (408), California (261), Michigan (181), Texas (178) and Florida (151).18 Charters "blur the boundaries between public and private schools."19 They are public in that they take public money, use public buildings and cannot select their students, but they are free to innovate in the classroom.

Figure I - Public School Choice Programs

"Private voucher programs offer privately funded scholarships for students to enroll in private schools."

The third type of public school choice is the option to attend magnet schools. Many of these schools were designed by federal judges for the express purpose of drawing white children from the suburbs back into inner-city school districts. Magnet schools are almost universally thought to work well, and in many districts are the only public schools that are competing with other schools. Currently, about 4,000 magnet schools are in operation across the country.20 In a recent survey by the National Center for Education Statistics, 16 states reported having magnet schools - although not all states responded.21 Those with the most magnet schools were California (472 schools with 9.3 percent of the state's student body), Illinois (315 schools and 11.6 percent of the student body) and North Carolina (119 schools and 6.1 percent of the student body).22

Privately Funded Vouchers. Privately funded voucher programs are becoming increasingly prolific. For example, Children First America is a nonprofit organization that represents 79 private voucher programs in cities and states across the country.23 The programs offer privately funded scholarships for students to enroll in private schools. In most cases the students must come from poor families (qualify for subsidized lunches). The families often are required to pay part of the tuition, say, $500 a year. Among the most notable privately funded programs are San Antonio's HORIZON program, the School Choice Scholarship Foundation in New York City, Parents Advancing Choice in Education (PACE) in Dayton, Ohio, the Washington Scholarship Fund in Washington, D.C., and the Children's Scholarship Fund in Charlotte, N.C. [See the sidebar: Privately Funded Voucher Programs.]

Taxpayer-Funded Voucher Programs

Publicly Funded Vouchers. Unlike privately funded programs, publicly funded vouchers are paid for with taxpayer dollars and can be used at participating public and private schools. These programs may or may not include religious schools. Publicly funded voucher programs include Milwaukee's Parental Choice Program, Cleveland's Scholarship Program, Florida's statewide A+ program and longstanding programs in Maine and Vermont. [See sidebar: Taxpayer-Funded Voucher Programs.]

"At least four states allow tax deductions or tax credits for educations."

Tax Credits and Tax Deductions for School Choice. At least four states - Arizona, Illinois, Iowa, and Minnesota - allow taxpayers a tax deduction or tax credit for donations to organizations that provide scholarships to students or for parents who spend personal funds on private school expenses. For example, in its second year of operation Arizona's tax credit program offered scholarships totaling more than $2 million to 3,700 students.24 Under Illinois' plan, parents can receive a state income tax credit for 25 percent of tuition and books or lab fees at K-12 private or public schools up to $500 per family.25

"During the 1999-2000 school year, 12,000 students used taxpayer-funded vouchers."

Voucher programs can be targeted to specific populations, such as low-income families or students in schools that consistently fail. For instance, vouchers in Milaukee and Cleveland are limited to families with low incomes, while vouchers in San Antonio's HORIZON program are solely for students in a particular school district. Florida's A+ Accountability Act aims at students in failing schools.


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