G371

As the debate grows hotter this election season over whether public dollars should be used to pay for private education, the spotlight invariably falls on Milwaukee.

The nation's 25th-largest school district, where the longest- running voucher program enters its 11th year, has enjoyed increases in spending and state aid for public schools, decreases in taxes and improved test scores.

Critics of school choice have long argued that vouchers would have the opposite effect. Giving parents tax dollars to send children to private schools, the critics say, would reduce public school funding and siphon off good students, pulling public test scores down.

Voucher supporters say Milwaukee's numbers are proof that such education alternatives can exist without harming public schools. But opponents argue that, despite the rosy surface, the program is draining valuable resources as enrollment nears 10,000 children.

Even if the truth lies somewhere between, it's not easy to determine. The real financial impact of the voucher program on Milwaukee Public Schools, experts say, has been clouded by changes in state funding and the district's struggle with state-imposed spending caps. The result is that Milwaukee's finances are open to interpretation and ultimately may not be an accurate indicator of whether such programs would work elsewhere.

Yet as Election Day nears, Milwaukee's experience may be the best voters can find when they search for examples of whether vouchers work.

Vouchers loom large across the electoral landscape:

* California and Michigan voters will decide Nov. 7 on grass- roots voucher proposals. California's Proposition 38 ultimately would provide vouchers worth at least $4,000 to any parent, regardless of income, who sends a child to a private school. Michigan would initially offer vouchers only to students in failing school districts. Earlier in the 1990s, voucher initiatives were rejected in California, Colorado and Washington.

* The two leading presidential candidates have drawn lines in the sand. Texas Gov. George W. Bush wants to make vouchers available to children in all the nation's failing schools; Vice President Gore has said he would oppose spending public money in such a way.

* More limited voucher efforts are underway elsewhere. The 6-year- old program in Cleveland serves 3,708 students. Florida has the nation's only statewide program, but it reaches only 51 students because it is offered in schools deemed to be failing for two years.

The Florida and Cleveland programs have been regular visitors to the courthouse. Most recently, an appellate court upheld Florida's school choice program.

Including privately funded programs, about 74,000 students attend private school on vouchers, according to the Center for Education Reform.

In the national debate over these programs, most arguments center on whether vouchers are passports out of failing inner-city schools, windfalls for church coffers, violations of church-state divisions or death knells to public education. Ultimately, however, the central issue is money. And a look at Milwaukee shows that voucher finance isn't as simple as either side would make it appear.

The confounding factor in Milwaukee is that in 1995, the state of Wisconsin decided to pick up two-thirds of local education costs, up from 40%. With the boost of the new money:

* District spending in 1999 was $922.1 million, up nearly 25% from 1991 after adjusting for inflation.

* Between 1990 and 1998, the district increased instructional staff by 21%, including teachers and principals.

* State aid to the district, adjusted for inflation, jumped 57% between fiscal 1991 and 1999, to $597.2 million.

With more money from the state, the district was able to live on less tax money. The district's tax levy in 1999, $192.1 million, was 28% less than in 1991."What we have here is the fortunate coincidence that when the voucher program got bigger, state aid to Milwaukee Public Schools also got bigger, and the tax levy and tax rate went down," says David Riemer, director of administration for the City of Milwaukee.

How much the tax levy and tax rate would have gone down without vouchers is unknown, Riemer says. "The formulas are very complicated."

The seeming windfalls occurred during explosive growth in the Milwaukee Parental School Choice Program. It began with 341 students in 1990, and enrollment has risen dramatically, particularly after a 1998 state Supreme Court decision allowed religious schools to participate. About 9,600 children from kindergarten through 12th grade are using voucher money to attend religious and non-sectarian private schools.

Payments to voucher schools skyrocketed to $38.9 million last year. All told, the program has cost $94.3 million since 1990.

Despite the growth, says Mayor John Norquist, a Democrat, the school system is "not suffering financially. That was a myth."

But others say the district's spending growth and additional state aid mask cracks in the financial foundation. For this fiscal year, for example, the district's projected costs exceeded the revenue it may raise under state-imposed limits by more than $30 million, finance director Michelle Nate says.

"It is true that spending is up, but what would have happened if you did not have the voucher program?" says Elliot Mincberg, education policy director at People for the American Way, which opposes vouchers. "Milwaukee had to cut programs and staff to close (the) budget shortfall. . . . Voucher revenue could have been used for that."

But the financial difficulties Milwaukee faces go deeper than the voucher program, officials say.

"The voucher system contributes to (the problem), but it's not the major contributor," schools superintendent Spence Korte says.

The major cause: A state-imposed cap limits growth in per-pupil spending, and costs are rising faster than the district can increase revenue, says Karen Royster of the Institute for Wisconsin's Future, a policy research center. The limit was enacted by the state in the 1995-96 school year in tandem with its decision to fund two-thirds of education costs in all districts.

"What you're looking at is an urban district where the student population is changing and the costs of education are increasing substantially," Royster says.

Like many school districts, Milwaukee faces budget pressures from increases in students with learning disabilities and higher costs for teachers and benefits.

"The cost of a teacher is rising faster than our revenues," says Bruce Thompson, school board president. "One of the big factors is benefits, which have risen very fast. They've risen in a lot of places, but our previous board signed some contracts without bothering to figure out whether they can pay for them or not."

Enter the voucher program, which is open to students whose household income is no more than 1.75 times the federal poverty level. A three-person household, for example, would need an income of $24,970 or less to qualify.

This year, the program provides $5,326 per pupil. To apply, parents need only to fill out a form and, as the school year progresses, parents sign four checks over to the voucher school.

For two years, Josetta Harrison has gladly signed over her voucher checks to Hickman Academy, a non-sectarian school in Milwaukee, to cover tuition for her children, Vernell, 7, and Victoria, 5. She teaches second-grade math and K-5 reading at Hickman, which does not offer free tuition for children of staff members.

"Even as a teacher, I wouldn't be able to send my children to Hickman" without the voucher, she says.

For Delone Rodriguez, the best part of vouchers is "I get to choose the surroundings of people I want my kids around." Ray Ann, 4, and Roman, 5, attend the Agape Center of Academic Excellence.

Center founder and director Yvonne Ali says vouchers support about 85 of the 280 pupils in pre-kindergarten through eighth grade.

"It's good for the parents, and it's good for the school. So I definitely see the value in it. I don't feel that it's draining from the public school system, because these are public school parents," Ali says.

Although the cost initially came entirely out of Milwaukee's state aid, the district now pays just half. Other districts in Wisconsin contribute the remainder. Korte estimates the potential cost this year at $53 million, making the district's tab about $26.5 million.

Though that amounts to about 3% of Milwaukee's $972 million 2000- 01 budget, some say it's an unwelcome burden for a district with stretched finances.

"It's like a family that is going through a financial crisis," Royster says. "The last thing you need is an additional drain on financial resources."

Voucher supporters in Milwaukee point out that, as the program grows and the public schools' enrollment declines, public schools can save money on teachers, buildings and other expenses. But Korte argues that losing students doesn't reduce costs appreciably.

"If we have 165 schools in the district . . . and lost all the kids from one school, that's not a problem," he says. "What we do is lose a little bit everywhere instead of being able to lose it in such a way that we can consolidate in a particular building. We don't heat the building 2 degrees less because a few kids went to a choice program."

With the financial picture in Milwaukee subject to state influences, how applicable is it to the rest of the nation?

The funding process doesn't make Milwaukee typical, but James Cibulka, a University of Maryland researcher, says the city "is an instructive case."

For example, schools that lose students to vouchers will have to see large enrollment reductions before a teaching position can be cut to reduce the school's allocations.

Is there validity to the argument that vouchers drain money?

"Not certainly in great amounts such as critics of vouchers have suggested would happen," Cibulka says. "I do think that the market principle that's operative here is that there are rewards for good performance and penalties for poor performance. You expect some decline in revenues to occur and thereby create an incentive for the schools to try to win those students back and improve their performance."

Some object to politicians' efforts to insulate Milwaukee's public schools from competition. Until recently, for example, when a student left for a voucher school, the district still could include that student in its enrollment count. Because state aid depends in part on enrollment, that formula lessened the financial impact of vouchers.

Since the 1999-2000 school year, voucher students are no longer counted in Milwaukee's enrollment. Still, the loss of a voucher student is minimized because the district can use a three-year average for its count.

"My belief is that any policy that says that dollars follow kids means that dollars follow kids, and that's what it ought to do," says Howard Fuller, a former Milwaukee schools superintendent and a voucher advocate at the Institute for the Transformation of Learning at Marquette University. "School systems should not get paid for kids who are not there. One of the objectives of this is to have an impact on the existing system."

Fuller says the program creates incentives for schools to keep their kids. "I don't apologize for that. In my mind, in this city, for the first time, poor black children have value because these parents now have options that did not exist before. It doesn't just put pressure on Milwaukee Public Schools, it puts pressure on everybody."