Wisconsin’s school voucher expansion costs districts millions

The public can now find out how much each school district in Wisconsin will have to levy in property taxes to make up for the cost of paying for private school vouchers. But you’ll need to put on your reading glasses and brush up on Excel to hunt down the numbers.

Data released this week by the state’s Department of Public Instruction (DPI) includes a comprehensive spreadsheet listing the cost of private school voucher programs to taxpayers in each of Wisconsin’s 446 school districts. 

“School districts across the state are going through those numbers now to see what those levies will be in their communities,” says Chris Thiel, government relations specialist for the Milwaukee Public Schools.

As enrollment in the Milwaukee, Racine and statewide private school voucher programs grows, as well as the new special-needs scholarship program, so does the amount of money deducted or withheld from school districts’ aid payments to fund these programs.

The state will deduct $36.8 million from the Milwaukee public schools’ general aid to cover the cost of the Milwaukee Parental Choice Program. In Racine, the state will withhold $22.3 million from public schools to fund the Racine Parental Choice Program.

Districts grappling with the loss of state aid have a few options. “There are technically three things a district can do with the budget hole,”  explains Benson Gardner of DPI, “cut their budget by that amount, raise property taxes for anywhere up to that amount or fill the hole with money from a fund balance. Most districts will choose to raise property taxes.”

Wisconsinites would have to dig pretty deeply into the DPI spreadsheets available on the agency’s website, and study a multi-page, 2019-20 revenue limit worksheet, to find out how much their property taxes are going up to pay for private school vouchers. That’s because unlike the costs of city, county and state services, as well as public schools and technical colleges, which are itemized on Wisconsinites’ property tax bills, the cost of private school vouchers does not appear. Sen. Chris Larson (D-Milwaukee) objected to this hidden cost, and proposed a “voucher transparency” bill earlier this year to publicize the cost school vouchers on property tax bills. 

Altogether, Wisconsin taxpayers will spend $349.6 million on private school vouchers and a special-needs scholarship program this year. The state’s 276 districts will have $73.2 million withheld to fund students who attend private schools through the statewide voucher program, known as the Wisconsin Parental Choice Program (WPCP). The special needs voucher program, which covers costs for disabled students of any income level to attend private school, will cost 113 districts a total of $13 million.

Upon the release of DPI’s annual report on enrollments and school funding this week, Jim Bender of School Choice Wisconsin issued a statement celebrating the growth of Wisconsin’s independent charter and private school-voucher programs.

Enrollment, and costs, go up

“Year over year, the Parental Choice Programs continue to grow across Wisconsin,” Bender said. “Combined with public school open enrollment and independent charters, more than 12% of students are educated with public dollars outside their resident district. That number continues to increase every year.”

Private school voucher enrollment has increased by 37% thanks in part to a state law that allows private schools to increase enrollment in the program each year by 1% until 2026, when the enrollment cap will be removed altogether.

The largest increases are in the statewide voucher program, which grew by 37%, and the special-needs voucher program, which grew by 55%.

Private-school vouchers cost $7,754 each for students in kindergarten through eighth grade and $8,400 for ninth through twelfth graders. Private schools participating in the special-needs scholarship program receive $12,424 per full-time equivalent student for a full scholarship. School districts where voucher students reside must cover the cost of vouchers, by having the money deducted or withheld from state general aid, and, if the general aid is not enough, by raising property taxes.

Is it a myth that most voucher kids were already in private school?

In the same statement celebrating the recent DPI release, Bender also denounced DPI for “misleading” the public in the way it reported the number of school-voucher students who were already in private school. 

The way DPI reports the data “perpetuates a myth about the WPCP having a high percentage of students who were already in private school,” Bender said. “They do not list the status of a student when they entered the program, just where they attended in the prior year. So, a student that transferred from a public school two years ago is listed on the DPI sheet as previously being a private-school student. This egregious misrepresentation is not done by accident. It is meant to mislead.”

In other words, according to Bender, DPI is driving an unfair public perception that school vouchers are essentially a public subsidy for families who already had their kids in private school.

“No, the intention is to be transparent and also to share multiple pieces of information,” DPI’s Gardner responded when asked about Bender’s accusation. Gardner pointed out that the same data sheet Bender refers to includes an explanatory note that “makes it easy to tell how many private school students were in the choice program in the prior year.”

But what about the idea that vouchers amount to a public subsidy for parents who already had their kids in private school? Is it a myth?

One Wisconsin Now put out a press release this week under the headline: “Over 81 Percent of Students Snagging Taxpayer-Funded Private School Vouchers in Statewide Program This School Year Attended A Private School Last Year”

That number comes straight from the DPI website. A closer look reveals that most of the private-school students who make up that 81% were already in the voucher program last year. 

Of the 7,703 voucher students who attended a private school last year, only 1,365 were new to the voucher program.

Bender has a point. There is a difference between saying that taxpayers are subsidizing private-school tuition for families who had their kids in private school anyway, and counting kids who have been in a private school on a voucher for multiple years.

Still, you don’t have to go back very far to see that it’s also true that the statewide expansion of school vouchers has mainly benefited people who were already in private school. 

Mike Browne of One Wisconsin Now points to DPI data from 2013 — the beginning of the statewide school-voucher expansion. Most of the students who participated in the program from the beginning (73%) were already in private schools.

Concerns about impact on rural schools

“Kids are not changing from public to private schools,” says Browne. “It’s who’s paying for kids who are already in private school that’s changing.”

This year’s data from DPI appears to back up Browne’s point. Among students who took advantage of the statewide voucher program for the first time this year, the number who were already in private school last year (1,365) is larger than the number who previously attended public school (1,042).

Overall, fewer than 11% of this year’s private-school voucher students transferred from public schools.

The costs of the program are spread among school districts unevenly. Some of the biggest tax levies associated with costs of the statewide and Racine Parental Choice programs, according to DPI data, will fall on Appleton ($3,004,767), Green Bay ($6,255,683), Sheboygan ($2,509,029), West Allis ($2,725,304), Waukesha ($2,239,543), Oshkosh ($2,464,482), and Neenah ($1,064,567). The Special Needs Scholarship Program will hit Madison taxpayers particularly hard ($241,792).

Former Rep. Steve Kestell (R-Sheboygan) expressed concerns about the ballooning cost of the school-choice program upon his retirement from the legislature in 2014. Kestell was dismayed that, when school vouchers were first expanded statewide, instead of “helping poor kids stuck in failing schools” as he had hoped, a large majority of the families they served were already in private school, Sheboygan Press reported.

The financial crisis in rural schools “will be on steroids with the wide-open school choice program cutting across the state,” Kestell said in his exit interview with reporters. “No one has even tried to explain how we’re going to deal with that as a state. No one has tried to explain how we’re going to fund parallel school programs. Because that’s where we’re heading.”

Special needs scholarships expanding fast

One of the fastest growing costs in state education spending is the Special Needs Scholarship Program, added to the 2015-17 state budget without public input. It allows children with disabilities, regardless of income, to attend private school on a taxpayer-subsidized scholarship.

Public school advocates have objected to the disparity created by the requirement that the state pay 90% of the costs of educating special-needs students through the private-school program (in contrast to the 26% of costs the state covers for special education in the public schools.)

Special education, which is a federally mandated cost, has been underfunded for years and, therefore, has eaten up more and more of school districts’ general funds — a major point made by public-school advocates in the most recent state budget debate.

When public school officials objected to the large gap between funding for special-needs voucher students and special ed students in the public schools, Bender of School Choice Wisconsin told the Milwaukee Journal Sentinel that “none of the 28 schools enrolled in the scholarship program plans to take advantage of the high-cost funding that would push payments beyond the current $12,207 per student.”

“If there’s actually a problem — if we get to a financial place where there’s a problem—we’re happy to find solutions,” Bender said.

Recently, DPI declared that there was a problem, and held a hearing on an emergency rule on Oct. 9 clarifying that payments through the special needs private-school scholarship program cannot be used to cover general, non-therapeutic school costs.

Bender and Lucas Vebber, of the Wisconsin Institute for Law and Liberty (WILL), wrote a letter arguing that DPI’s decision was unfair, because it “would prohibit participating private schools from including any general costs such as general use of supplies, use of building space, or even the cost of utilities, with the student’s scholarship.”

“The Rules exceed the bounds of correct interpretation and do not comply with legislative intent,” they added, “which was clearly aimed at helping participating private schools recoup the full cost of educating the student with special needs.” 

But the rule merely brings special needs scholarship funding paid to private schools into line with special education funding in the public schools, says MPSs’ Thiel. 

“DPI is absolutely right here,” says Thiel. “We don’t get reimbursed for utilities [through special education funds] and we’d be laughed at if we tried.”