Indecent Proposition:


Terry Moe should have been as content as Bill Clinton working a rope-line. Moe, one of the most respected proponents of school vouchers, was hobnobbing with several dozen other voucher enthusiasts at the palatial Redwood City abode of California venture capitalist Tim Draper. But instead of grinning, Moe was biting his lip.


The dinner was a celebration of Proposition 38, Draper's voter initiative that will be on the California ballot this November. The measure would amend the state constitution to offer all students $4,000 vouchers -- taking money out of the public schools and giving it to families to send their children to the private or religious school of their choice.


As the only person present who opposed the proposition, Moe had planned to keep quiet. Draper had not consulted Moe when drafting the referendum -- and Moe figured no speech would make the energetic tycoon turn back now. But in the midst of numerous oratories praising the merits of the proposal, someone asked Moe to speak. Put on the spot, the Stanford professor said Prop. 38 was terrible. Before the end of the evening, Moe recalls, Draper warned him, "You have to decide whether you are with us or against us."


Why would Moe -- an avid voucher proponent -- oppose a referendum that could bring vouchers to his home state? It could be that California's initiative-mad political system has finally gone too far -- generating a voucher proposal so bad that even most prominent voucher advocates oppose it. Draper's referendum is so radical and unregulated -- it's a kind of laissez-faire purist's dream -- that it clearly could end up hurting the very kids it purports to help most. And what is most upsetting to proponents of more modest and targeted voucher proposals -- like Moe, who has spent a career fighting to give vouchers to poor kids -- is that Draper's proposal appears to reveal the unabashed free marketry that liberals have always suspected underlies conservative voucher proposals. Are vouchers supposed to save low-income children from failing public schools -- or get the "big bad government" out of schooling, while subsidizing the high tuition at the posh private schools of the super-rich? Draper's proposal makes it look like the latter. Hence Moe's fear that Draper will scare voters off of vouchers altogether.


California has long been teeming with rich political newcomers who have tried to buy themselves a constitutional amendment -- in fact, the state has frequently passed their conservative referendums and then witnessed other states follow suit by approving copycat measures. So Draper may have seen his referendum as a local purchase that could make a national splash.


But he made two mistakes. First, he has taken on the teachers' unions. (Dane Waters, president of the Initiative and Referendum Institute says, "When a lot of money is spent on the 'no' side, voters become uncertain and confused and vote no.") And second, he refused to compromise with -- or even consult -- the major voucher advocates who could have helped him make his case.


Instead, the lanky billionaire wrote exactly the proposal his heart desired: a near copy of the hard-core unregulated voucher proposal first dreamed up by arch-libertarian Milton Friedman. And he promised to spend up to $20 million to pass it. If so, Draper will have spent more than any individual has spent on a referendum in the country.


Terry Moe is not the only respected voucher advocate to oppose Draper. University of California at Berkeley's well-known pro-voucher experts Stephen Sugarman and John Coons are against him. The California Chamber of Commerce is against him. Dr. Howard Fuller, the founder of the pro-voucher Black Alliance for Educational Options, is against him. The California Catholic Conference -- usually a strong proponent of vouchers -- has taken no position but has a list of gripes about the measure. Even Republican presidential nominee George W. Bush, who himself has proposed a voucher-like program, has refused to endorse it. Draper did not return numerous calls for comment.


If Draper had asked them for input, many voucher advocates would have told him that reformers should target vouchers to those who need them most: children in failing schools, low-income students, and/or minorities. Draper would not do that. Instead, he would give the same sized voucher to everyone, filthy rich or dirt poor. He would allow private schools to charge more than $4,000 -- forcing parents to pick up the rest of the tab. Furthermore, he would not require private schools that accepted vouchers to save space for low-income students.


Therefore, it is easy for opponents to charge that under a Prop. 38 regime, the best private schools would refuse to educate the poor and hard-to-teach, instead skimming the wealthy and better prepared from public schools. The results, they argue, would be that elite private schools would improve, while bad schools -- or those that served children who couldn't pay for or test into selective schools -- would get worse. In fact, that's what happened when New Zealand introduced school choice.


Moe, Coons, Sugarman, Fuller, and the Catholic Conference all argue that any voucher program must be fair to the poor. Programs could (1) require schools that take vouchers to hold a certain percentage of slots for the poor, (2) force them to hold a lottery for admission, or (3) give larger vouchers to the poor than to the rich. And in any case, schools that take vouchers should not be allowed to charge more than the voucher amount.


Also, it's impossible to know at this point whether California would save or lose financially on Prop 38. Here's the proposal: Prop. 38 would give vouchers to students who already attend private schools after a three-year phase-in period. This would cost the government $4,000 per year for more than 650,000 students who currently pay their own tuition. For students who left the public schools, the state would pay $4,000 for their voucher. But it would take about $7,000 from the public schools for each student who left -- a net savings for the state of more than $3,000 per student.


As a result, the California Legislative Analyst's Office has concluded that the program could cost $3.3 billion if no students left the public schools (and only students already in private schools got vouchers) or save up to $3.4 billion if 25 percent of students left the public schools. For the state to just break even, the number of students in private schools would have to more than double to 1.5 million.


Critics contend there simply aren't enough spaces in existing private schools for many students to take advantage of the vouchers. And they argue that $4,000 per student isn't nearly enough tuition to allow churches, parents, nonprofits, and for-profit companies to build new schools.


California's experiment with charter schools suggests the critics may be right. Presently, California pays more than $4,000 per year for each student who attends a charter school. But since California began permitting charter schools in the early 1990s, educators have only opened 261 charter schools serving fewer than 125,000 students. That's less than one-sixth the number of students who would have to leave the public schools for California to just break even under Prop. 38.


Finally, there is the question of whether offering public vouchers for religious schools violates the separation of church and state. The concerns are legitimized by the California Catholic Conference, which reports that more than half of California private schools are Catholic -- and probably even a higher percentage of affordable schools are religious.


But not everyone is opposed to Prop. 38. Economist Milton Friedman consulted with Draper on the drafting of Prop. 38, and enthuses that it would "produce a true educational revolution." Milwaukee Mayor John Norquist -- the only well-known Democrat to support Prop. 38 -- charges that educators who oppose the referendum suffer from a "fear of not being chosen."


Yet Norquist concedes that Prop. 38 is probably doomed. Recent polls indicate that even Draper's cash dump may not save his referendum; according to a poll by the Public Policy Institute of California, Prop. 38 is failing 53 to 37 percent.


Like other supporters, Norquist places the blame with Draper himself. He argues that the initiative is hurt by the impression that it stemmed from "a wealthy political newcomer putting a proposition on the ballot and funding it himself." Charges that the campaign is not playing fair aren't helping matters, either. (See Sidebar.)


That's why Terry Moe finds Draper so infuriating. By tying himself (and his proposal) to vouchers in the public mind -- and then playing a vain, rich, politically naÔve loon with an attitude -- Tim Draper may be helping to persuade the public that vouchers are dangerous. He also may prove to enthusiasts that putting voucher proposals on the ballot is a losing proposition. (In fact, the Initiative and Referendum Institute's Waters says that if Prop. 38 fails, that may well be the end of voucher referendums.) So for those who cringe at the idea of losing more money and students to private schools, Tim Draper may be just what the pollster ordered.


The Prop. 38 YES! campaign first came under fire when it used a video clip of California Governor Gray Davis bemoaning the state of California's schools in its ad, implying that Davis supports the referendum -- despite the fact that Davis is an active opponent of the measure. Davis called television stations and demanded that they take the ad off the air. The campaign's ads now slam the popular governor.


Similarly, the campaign has taken to trashing public schools for their lack of credentialed teachers. (California has permitted people to teach while going to school for their credential.) Not surprisingly, Prop. 38 supporters fail to note that teachers in private schools are not legally required to get credentials at all -- and many voucher proponents say that is one of their virtues. Draper-crony Milton Friedman charges that, "the major effect of credentialing has been to lower the quality of teachers."


The campaign also drew charges of vote-buying when it began to offer 38 iMacs, five $2,000-shopping sprees, and a trip to Hawaii to the volunteers who signed up the most endorsers. (The anti-Prop. 38 folks were also embroiled in controversy when proponents charged that the California Teachers Association had paid the conservative Howard Jarvis Taxpayers Association for its opposition to the measure.)


And one California resident told me that the Prop. 38 campaign may be push-polling. In one poll, the pollster asked whether the resident was a member of a campaign or the press. Then she asked about a series of virulently negative messages attacking public schools and Democratic politicians.


Robert Blendon, a polling scholar at Harvard's Kennedy School of Government, says that the poll was either a push-poll or a terribly constructed one. Prop. 38's Chris Bertelli argues that the campaign was simply testing messages -- a commonly accepted polling technique.


Additional Resources


Proposition 38 Campaign Web Site


No on Proposition 38 Web Site


California Legislative Analyst's Office Analysis of Proposition 38

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