Newark, NJ, April 12, 2010

New Jersey voucher supporters have unveiled the latest version of legislation to divert $360 million in tax dollars to private and religious schools, at the same time the State’s public school students are reeling from a massive $1 billion aid cut proposed by Governor Christopher Christie.

The bill (S1872), dubbed the “The Opportunity Scholarship Act,” is sponsored by Senators Thomas Kean Jr. and Raymond Lesniak. Governor Christie also supports the bill. Previous attempts to pass a voucher bill in NJ have failed, and in 2009, an appeals court rejected a lawsuit seeking vouchers.

The revised bill tries to link private school vouchers to a seriously flawed plan to address “failing” public schools. It is clear that the legislation, if enacted, would undermine current efforts to ensure all NJ students an equal opportunity to a high quality public education.

A Corporate Tax Break to Subsidize Private and Religious Education

Over five years, the bill allows corporations to contribute $360 million for private school vouchers and receive a 100% deduction from their state taxes. The result: a loss of $360 million in revenue to the State treasury, revenue that is no longer available to support public education. The bill also diverts $360 million in public funds to private and religious schools, with no requirement that these schools meet State education quality and performance standards.

A recent report by the State Treasurer documented at least $15 billion in lost tax revenue through various tax credits, deductions, exemptions and other loopholes in New Jersey law. The voucher bill would add another $360 million in corporate tax credits to the total.

More Districts Targeted for Vouchers

The bill greatly expands the number of school districts targeted for vouchers, from 6 in the previous bill to 36. The pool of public school students who could apply for a voucher rises to 280,000, or over 20% of student enrollment statewide. See Districts Targeted by Proposed Voucher Bill for more information.

The bill expands vouchers to more districts by creating a new category of “chronically failing schools,” defined as any public school — including charter schools — where, for two consecutive years, 40% of students fail to demonstrate proficiency on both State math and language arts assessments, or where 65% of students fail to reach proficiency on either test.

Using this new definition, the bill labels 160 district public schools, and 14 charter schools, in 36 districts as “chronically failing.” The new “failing” school category is at odds with the criteria used by the NJ Department of Education (NJDOE) to identify schools in need of improvement under the federal No Child Left Behind Act (NCLB).

Two districts — Edison and Highland Park — are targeted for vouchers not because they operate a “chronically failing” school, but because some students from those towns attend the Greater Brunswick Charter School, a “failing” school that serves three districts.

Vouchers for Both Private and Public School Students

While claiming to help “chronically failing schools,” the legislation does not limit eligibility for vouchers to students attending those schools. Instead, all students “residing” in a district with even one “failing” school could apply for a voucher, even those students attending successful schools or schools making progress in improving student achievement. This includes districts with “failing” charter schools, even though the district is not responsible for the performance of such schools.

Half of the 36 districts targeted for vouchers have only a single “failing” school serving a relatively small percentage of the district’s total student population. For example, even though Cherry Hill has one “chronically failing school” serving only 37 students — or 0.3% of the district’s enrollment — all of the district’s students are eligible for a voucher under this legislation. Other districts with one chronically failing school that serves small numbers of students include Hoboken (4%), Elizabeth (7%), Franklin Township (7%) and Neptune (9%). Yet every student residing in these districts would be eligible to apply for a voucher.

In addition, 25% of the vouchers are reserved for students who already attend private and religious schools. This means the bill sets aside $90 million for families who have already chosen to send their children to a private or religious school. The 25% set aside for private schools can increase if not enough public school students seek a voucher.

The bill targets “low-income” students for vouchers, but defines low-income as any student in a household with incomes up to 2.50 times the federal poverty level. This means that a family of four earning up to $55,125 per year could obtain a voucher if they reside in a district with just one “failing” school, even if their child does not attend that school.

No Accountability for Private or Religious Schools

The bill provides no educational accountability for the private and religious schools that accept publicly funded vouchers. While requiring private schools to offer “a program of instruction for kindergarten through 12th grade,” there are no standards for the content of the educational program or for the State to evaluate the quality of the program.

Private schools receiving vouchers are required to give “an annual test” that is “aligned with the core curriculum content standards.” Only voucher students, however, must be tested. There is no requirement that the “annual test” be given to all students in the private school, or that the assessment be the same as those administered by NJDOE to all students in public schools. Thus, there is no way to reliably measure and assess the performance of the private and religious schools and to compare their performance — and the quality of education — with that of public schools.

The absence of any educational accountability for the private and religious schools receiving public education dollars through vouchers is remarkable given the intense levels of scrutiny the State now places on public schools, especially those with high student need.

Aid Cuts to Targeted Districts

The bill cuts the full amount of per pupil state aid for any public school student leaving the district with a voucher for a private or religious school — again, regardless of whether the student previously attended a “failing” school. There is no cap on the aid a district could lose, and the negative impact on affected districts could be substantial, especially in high needs districts dependent on state aid.

For example, if, in the first year, just 1% of the students in an eligible district left to attend private schools, Newark would lose $6.4 million and Paterson $3.8 million. If, by year five, 5% of the district’s students left public school, the aid losses would climb to $31.9 million in Newark and $18.8 million in Paterson.

While districts no longer bear the cost of educating students who leave with a voucher, they must still educate all of the students who remain in the public system, without experiencing a decrease in fixed costs for facilities, specialized classes, special education and other State and federal mandates.

The bill also re-directs the state aid cut from the targeted districts to an “Innovation Fund” under the control of the Commissioner of Education. The Commissioner is given sole discretion to use this money to award “competitive grants” to “chronically failing schools” for “innovative practices.” Under this shell game, targeted districts losing aid to the voucher program would have to apply to the Commissioner to recover some of the lost aid.

Conflicts with Federal Policies

The voucher bill also runs counter to the new education policies put in place by the Obama administration. For example, NJ recently received a $67 million federal “School Improvement Grant” to “turn around” low-performing schools as defined by NCLB. These schools must use the grants to implement reform strategies designed to improve instruction, leadership and governance. Private school vouchers are not among the designated reform strategies. If the voucher bill is enacted, these schools would lose students and state aid under the voucher program at the very same time they are seeking federal funds to improve performance.

Bill supporters also tout vouchers as a way to help the State secure a competitive Race to the Top (RTTT) grant. However, RTTT grants have extensive guidelines and requirements for stakeholder participation, along with strictly defined initiatives such as improving the distribution of qualified teachers and adopting more rigorous academic standards and assessments. Again, vouchers are not included as an RTTT reform strategy. If enacted, the voucher bill may well undermine the State’s chance of winning an RTTT grant.

Federal guidelines also require states to maintain state school funding at levels mandated by their funding formulas. The voucher bill reduces the tax revenues needed to fund NJ’s school funding formula and cuts aid to districts and schools in need of improvement. Given the extraordinary cut in state formula aid proposed by Governor Christie for FY11, adopting the voucher bill would be further evidence that New Jersey has retreated from its longstanding commitment to fair public school funding.

Oppose This Bill

The latest voucher bill contains all the flaws of earlier versions and adds new ones. At a time of fiscal stress, it raids the public treasury to divert funds to private schools at the expense of public schools. It fails to apply rigorous educational standards and accountability measures to all schools receiving public dollars, and the so-called “innovations” in the bill lack evidence and credibility. For these and other reasons, ELC urges those concerned with ensuring equal educational opportunity for all public school students, as well as taxpayers concerned with accountability and transparency in the use of public funds, to oppose this bill.

Education Law Center Contact:
Sharon Krengel
Policy & Outreach Coordinator
voice: 973 624-1815 x24

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Press Contact:
Sharon Krengel
Director of Policy, Strategic Partnerships and Communications
973-624-1815, x240