Choice Ironies: Open Enrollment in Minnesota

For years, a number of reformers have been urging that parents be permitted to choose their children's schools and that the budget of each school depend on the parents' choices. Advocates of educational choice argue that injecting competition into a moribund public school monopoly will compel schools to respond to parents' demands and improve the quality of education. Some examples of choice, such as magnet schools, have been around for some time. But only recently have any states or local governments begun to put the school-choice model to a significant test. Perhaps the biggest test -- certainly one of the best publicized -- is now in progress in Minnesota.

Minnesota recently became the first state to adopt an open enrollment policy allowing parents to send their children to public schools outside their own district. Under the program, state aid that would have gone to a student's home district goes instead to the district where the student attends school.

But Minnesota's program is not exactly what many people seem to think it is, and the state's experience with school choice, though in its early stages, already confounds many common assumptions in the present debate about education reform.

In the national debate, school choice is often equated with proposals for tax credits or publicly financed vouchers for private school tuition. Such ideas generally receive more support from conservatives and have been identified with more embracing programs for privatization endorsed by the Reagan and Bush administrations. Minnesota's open enrollment policy did originally emerge from proposals for private school vouchers. But the plan is limited to public schools, and some supporters believe the program will actually strengthen public education and deter further privatization efforts.

The adoption of school choice in Minnesota undoubtedly does reflect the influence of market-oriented ideas. But the plan was proposed by a Democratic governor, Rudy Perpich, and passed by one of the most liberal, Democratic-controlled state legislatures in the country. And while nationally supporters are looking for school choice to have its biggest effects on urban schools, so far in Minnesota rural districts have felt the major impact.

Some new school choice programs in other states do involve private schools and have an urban focus. In an experiment in Milwaukee this fall, 930 low-income students will be eligible to attend ten private nonsectarian schools with up to $2,500 in state aid per student. Citizens in Oregon are voting on an initiative that would give parents as much as $2,500 in tuition tax credit per child for education at home or at a private school. The Oregon proposal also calls for open enrollment among public schools in the state.

Minnesota's school choice policy actually involves two different programs -- postsecondary options and open enrollment. The postsecondary options allow high school juniors and seniors to attend Minnesota colleges, public and private. Open enrollment enables parents to send their children to public schools anywhere in the state. In both cases, state aid follows the student.

Previously, both the Minneapolis and St. Paul school districts, like districts in many other major cities, allowed parents to choose among magnet schools within a district. But the aim of these magnet schools is to enlist voluntary desegregation from parents, not to stimulate competition and market forces among the schools.

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At this point, any claims for the success or failure of the new programs of school choice are premature. The 1990-91 school year is the first year that open enrollment is mandatory for all school districts in the state and, in any case, a number of restrictions on parent choice still apply. The initial results suggest only modest impact; so far, few parents have moved their children out of their local school. Opinion surveys also show a mixed reception. Though The Economist recently reported Minnesota's program to be "enormously popular," the latest statewide poll shows the public split almost evenly: 51 percent support open enrollment, while 47 percent oppose it. That slight margin, however, represents a big change from a 1985 poll that showed only 18 percent of Minnesotans supporting open enrollment for all grade levels.

The greatest curiosity may be why the issue of school choice even emerged in Minnesota. In Garrison Keillor's mythical town of Lake Wobegon, Minnesota, "all the children are above average." Real Minnesotans enjoy a similar self-image. Minnesota has the top high school graduation rate in the nation, exceeding 90 percent, and most high school graduates continue with postsecondary education. Minnesota students score higher than the national average on standardized college admission tests. The validity of these measures may be debatable, but public opinion polls consistently show that Minnesotans express a high level of satisfaction with their public schools and a willingness to pay even more taxes to support them. School choice in Minnesota was not a response to a widespread sense of educational crisis or a popular revolt against taxes for public schools.

The Minnesota experience is distinctive for other reasons, too. The debate over open enrollment in Minnesota did not have strong racial overtones, as it has in Milwaukee and elsewhere. Minorities account for only about 9 percent of all Minnesota students, though they do comprise almost 50 percent of enrollment in Minneapolis, where they represent just 20 percent of the total population. To be sure, some Minnesotans have expressed concern that open enrollment might accelerate white flight from the growing minority presence in Minneapolis and St. Paul. But others actually see the program as a way to introduce a broader desegregation effort. Widespread participation in open enrollment might lead to a free flow of students among urban and suburban schools, especially if magnet schools sought students throughout the metropolitan area. Some expect that the courts might require expanding desegregation to a metropolitan-wide basis, since under open enrollment school district boundaries lose much of their significance.

In any case, political controversy over open enrollment in Minnesota has focused more on small rural school districts than on big urban ones. Minnesotans are proud of local control of the public schools, and many rural residents fear school choice will lead to the consolidation of their districts. Teachers' unions, on the other hand, quietly hope for consolidation, expecting that they will be in a better bargaining position with larger and more financially secure districts. Minnesota's Department of Education, for its part, has made it clear that the smallest school districts should merge with neighboring districts.

Over the course of the 1980s, choice advanced in Minnesota from simply an odd slogan to the dominant strategy for education reform. Prior to the 1980s, school choice as a political issue was largely a question of granting vouchers to Catholic school students. Voucher bills were regularly introduced at legislative sessions and just as regularly rejected. In the 1980s the political terrain of educational choice shifted dramatically It changed from a religious and libertarian issue of parents' rights to an educational issue of school improvement and a fiscal issue of state taxing and spending.

Some of the support for open enrollment comes from Minnesotans who see it as an opening wedge for a choice program that includes private schools. But other supporters, such as the Minnesota Parent Teacher Association, defend open enrollment in its present form as a bulwark against vouchers for private education. They believe that if parents who are unhappy with their local public school have the option of shifting to another public school, they will be that much less likely to move to private schools. Public school choice, in this view, will undercut support for vouchers and could even attract private school students back into public schools.

A Business-Led Coalition
In fact, open enrollment in Minnesota emerged as much from the politics of fiscal reform as from the movement for school reform. School choice was part of a larger business-led effort to control state spending and taxing. The issue brought together a curious political coalition directed by business but also including 1960s-era "open school" progressives. Indeed, one leading Minnesota activist has likened the campaign for open enrollment to the civil rights movement and claimed that "expanding educational options is part of progressive movements over the last two hundred years which have increased opportunities in voting, housing, health care, and employment."

Clearly, though, business rescued school choice from the political fringe and brought it to center stage in Minnesota. The two key advocates for school choice were the Twin Cities Citizens League, a business-dominated public policy research group, and the Minnesota Business Partnership, which represents CEOs of the eighty largest corporations based in the state. The executive director of the Business Partnership previously served as chief policy adviser to Governor Perpich.

In 1982 the Citizens League issued a report calling for a voucher system. The report did not use the familiar argument of parents' rights and religious freedom. Instead, it justified vouchers on the grounds that consumer choice would produce an educational marketplace where competition among schools would force them to improve without extra state spending. Also in 1982, the Business Partnership established an Educational Quality Task Force to recommend how to improve educational quality without new government funds. The organization hired a consulting firm that had earlier completed a similar study for the California Business Roundtable. The Business Partnership's final report, issued in the fall of 1984, called for "profound structural change" in education. The report proposed vouchers for eleventh and twelfth graders to attend any public or private school and called for holding education expenditures constant, adjusting them only for inflation.

In January 1985 Governor Rudy Perpich unveiled his own "Access to Excellence" plan, which included open enrollment among public schools and replacing the local property tax with state funding for all school operating costs. At the 1985 legislative session, the Business Partnership was the most influential group in the governor's coalition on school reform. Chief opponents were the two teachers' unions (the Minnesota Education Association and Minnesota Federation of Teachers) as well as the Minnesota School Boards Association and rural school districts. The opponents argued that open enrollment would undermine community support for schools because disgruntled parents would be quick to vote with their feet rather than work to improve their local schools. Schools that lost students and state aid would then lack the very resources needed to improve. Opponents also invoked images of public schools marketing themselves like fast-food restaurants. And school choices, they suggested, would be based less on foreign language offerings than on athletic teams.

While the legislature did not pass open enrollment in 1985, it did approve the postsecondary enrollment options. Afterwards, the governor set up an informal study group composed of representatives from major education groups as well as several prominent choice advocates. This group reached a consensus in December 1986 to support open enrollment on a trial basis.

Support of the teachers' unions was essential to the consensus. The teachers concluded that it was better not to be perceived as opposing education reform and that open enrollment would likely strengthen their bargaining position in consolidated rural districts. The Minnesota School Boards Association, however, continued to oppose open enrollment. In 1987 the legislature passed a bill allowing districts the option of participating in open enrollment. The following year the legislature made open enrollment mandatory as of 1989-90 for districts with more than 1,000 students. In 1990-91 all districts in the state must allow open enrollment.

For each open enrollment student, the state pays the student's district of attendance an amount equal to the per pupil general education revenue (a combination of state aid and local levy). State funding to the student's district of residence is correspondingly reduced. The amount varies from $2,953 for an elementary school student to almost $4,000 for a secondary school student. (State revenue currently accounts for about 63 percent of all K-12 education spending.) Of course, the average cost of educating a student varies from one district to another. Whether a school district wins or loses financially by attracting new students under open enrollment depends on the marginal costs of educating additional students. Staff costs account for roughly 80 percent of school district operating costs. A district with excess capacity, which does not hire new staff for open enrollment students, might profit handsomely from the additional state aid. On the other hand, a small district might need to lose only a few students (and the accompanying state aid) to be pushed over the financial edge.

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In any case, school districts have not been aggressively marketing themselves to open enrollment students. The Twin Cities Citizens League has produced a "consumers guide" to schools, and some districts have spiffed up their promotional brochures. But no billboards have gone up, and schools are not broadcasting radio ads to entice students from neighboring districts.

In 1989-90 (the first mandatory year for districts with more than 1,000 students), an estimated 3,218 students statewide participated in open enrollment-fewer than one half of one percent in the state. Prior to open enrollment, almost as many students were transferring between districts under an earlier program that required permission from a student's home district as well as the district of attendance. So the actual effect has been very small.

Open enrollment in Minnesota is hardly a free market in education. Numerous restrictions apply. A school board can prevent all non-resident students from entering the district by simply passing a resolution -- but very few have actually done so. A district can also limit the number of nonresident students it accepts based on capacity. A school district with a desegregation plan may limit transfers in or out to ensure that it remains in compliance with the plan. A student, along with a parent or guardian, must meet with a school counselor from the resident district before submitting an application for transfer. The application deadline is January 1 for the following school year. The nonresident district must provide transportation within the district; but the student must get to the border of the nonresident district. The state legislature did allocate funds to reimburse low-income students for transportation costs to nonresident districts, but virtually none of the money was used in 1989-90.

Of the 343 districts participating in open enrollment in 1989-90, 257 experienced less than a one percent change in total enrollment. Only 12 districts experienced more than a 5 percent change in enrollment. The most dramatic case of open enrollment's impact occurred in the northern Minnesota district of Mountain Iron-Buhl. The district lost almost 15 percent of its students to open enrollment in 1989-90.

But the reasons for the students' flight had nothing to do with educational issues and everything to do with geography Of the 158 students who left Mountain IronBuhl, 150 went to the nearby Virginia school district, which is about twice the size. Financially strapped, the Mountain IronBuhl district had recently voted to close its high school in Mountain Iron, transferring the classes to its middle school in Buhl. But 80 percent of the district's residents live in Mountain Iron and, for many of them, the town of Virginia is closer than Buhl. After the school board's decision, more than 300 students applied to transfer to Virginia under open enrollment. The school board then reopened the high school in Mountain Iron for 1989-90 and thereby cut in half the number of students actually transferring to Virginia. The example highlights the additional clout that parents now exercise by voting with their feet. But it does not exactly represent the "profound structural change" expected by the advocates of school choice.

The Long View
If open enrollment takes off, it will undermine the whole system of local school finance and create pressure for replacing local property tax support entirely with state revenue. With large numbers of students crossing district lines, citizens in each district will no longer be voting on the education of their own or their community's children. Of course, many of them might no longer see any reason for voting, except to keep taxes down. A truly successful school beseiged by "customers" would be a mixed blessing since it might require additional expenditures for new staff and facilities not covered by incoming state aid.

Amore serious long-term concern is that support for public schools is likely to erode in an aging society if education is promoted as a matter of individual preference and consumer choice. Already, most Minnesota adults have no direct connection to the public schools; they have no children or their children are grown up. In Minneapolis, for example, 83 percent of the households do not include any school-age children. More than ever, support for public education depends on the public's conviction that schools serve public purposes, not just individual consumer preferences.

Great hopes and fears have been invested in the issue of school choice. The Minnesota experience so far suggests that both have been exaggerated- In the debate over open enrollment in the late 1980s, Minnesota had its fair share of overheated rhetoric. The Minneapolis Star Tribune, a fervent promoter of school choice, ran an editorial in 1986 comparing Governor Perpich's heretical support of open enrollment to "Galileo spreading the Copernican concept of planet Earth moving around the sun." And it likened the education establishment's opposition to the Inquisition.

Four years later, with open enrollment up and running, the mundane realities of school choice in Minnesota are hardly so earth-shaking. School choice in Minnesota is far less radical and more incremental than the national media have suggested. If anything, the complexities of Minnesota's experience may demonstrate the further ironies of school reform in America.

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