Revisiting NJOSA & the Lakewood Effect

The current version of the New Jersey Opportunity Scholarship Act would pilot the tuition tax credits for private schooling in the following locations:

• Asbury Park City School District
• Camden City School District
• Elizabeth City School District
• Lakewood City School District
• Newark City School District
• City of Orange School District
• Passaic City School District, and
• City of Perth Amboy School District

http://www.njleg.state.nj.us/2012/Bills/S2000/1779_I1.PDF

http://www.njspotlight.com/stories/12/0316/0145/

NJOSA is often pitched publicly as a scholarship program that would allow students trapped in failing urban districts to exercise the choice to select a better alternative – implicit in this argument is that any private school option a student might choose would necessarily be a better alternative. Also suggestive in the rhetoric around NJOSA is that this program is mainly focused on kids in places like Camden and Newark – the stereotypical New Jersey urban centers.

NJOSA would provide scholarships to children in families below the 250% income threshold for poverty. The text of the bill indicates that eligible children are those either attending a chronically failing school in one of the districts above or eligible to enroll in such school in the following year (which would seem to include any child within the attendance boundaries of these districts even if presently already enrolled in private schools).

“children either attending a chronically failing school or eligible to enroll in a chronically failing school in the next school year.”

I have discussed NJOSA numerous times on this blog, specifically focusing on the Lakewood effect here & here.

Many in New Jersey probably already understand that the above list contains some intriguing outliers, but I suspect few understand just how big these outlier effects are. One would naturally assume that Newark, for example, would be the major target of NJOSA scholarship recipients? Right? That’s our stereotypical urban core with failing schools from which kids need to escape.

Here’s what the Newark private school market looks like.

This map uses data on individual private schools, their locations, and enrollments from the 2007-08 National Center for Education Statistics, Private School Universe Survey, which also includes classifications of religious affiliation/status. Purple circles are religious private schools and green circles are those who’s primary affiliation is listed as non-religious (independent of a specific church/religion). Circle size indicates enrollment size. Bigger circles are the bigger schools.

I also use U.S. Census Bureau American Community Survey data to identify the number of total children and children in families below the 250% income threshold attending private school within each Public Use Micro Data Area (PUMA). Blue numbers indicate total private enrollments, and red numbers indicate low income private school enrollments.

Currently, there are about 3400 private schooled students residing in Newark, and there are about 2,000 who actually fall below the 250% poverty-income threshold. So, that’s a sizeble number of Newark children who might quality for NJOSA scholarships, in addition to others who might apply who are presently enrolled in public schools.

It would seem by the language in the bill that a current privately schooled student would merely have to be eligible to attend their local public school, but not actually do so.

Here’s what the Passaic/Clifton private school market looks like (neither one is big enough to be its own PUMA):

The Passaic/Clifton PUMA has nearly as many low income private school enrolled children as Newark – 1,619, despite much smaller total population. And by far the largest private school in the area is Yeshiva Ktana.

But the most striking example is that of Lakewood, as I have discussed in the past. Since Lakewood remains in this bill, even though there’s nothing really new I’m presenting here, I felt the need to reiterate just how big a deal this is.

Here’s the Lakewood private school marketplace & current enrollments:

Based on the Census ACS data from a few years back, there were over 17,000 privately schooled students in Lakewood, and OVER 10,400 OF THOSE STUDENTS WERE IN FAMILIES THAT REPORTED THEMSELVES AS BEING BELOW THE 250% POVERTY-INCOME THRESHOLD!

Recall that Newark had about 2,000 low income private school enrolled children.

Orange/East Orange combined have under 900.

All of the cities around Asbury Park combined about 400 (meaning that Asbury Park alone is likely much less).

Camden about 1,300

Elizabeth about 1,000

The entire area (several towns/districts) around Perth Amboy about 1,000 (meaning that Perth Amboy is likely only a fraction of that amount)

And again, Lakewood, over 10,000! (and Passaic, another significant amount)

In other words, all of the other locations combined do not have the sum total of low income private school enrolled children that Lakewood has. Lakewood would likely be the epicenter of NJOSA scholarship distribution. I noted in my first post on this topic that if the average scholarship amounts were as proposed, the Lakewood Yeshiva schools would stand to take in as much as $67 million per year in these indirect taxpayer subsidies.

The clever subversion of taxpayer rights

I have a secondary, related concern when it comes to Tuition Tax Credits, these days, often framed as “Opportunity Scholarship Acts.”

Tuition Tax Credit programs create an indirect subsidy of private schooling, whereas Vouchers provide a direct subsidy.  The latter is a more honest approach and one that at least allows for legal recourse by concerned taxpayers – even if they eventually lose. It is currently the case that voucher programs which provide direct subsidies to families, even where the majority of those families choose to use their subsidy for religious schooling, are constitutional under the U.S. Constitution (but not under some state constitutions which expressly prohibit use of public funding for religious education). Specifically, the U.S. Supreme Court has determine that these subsidies do not violate the establishment clause of the U.S. Constitution, because the distribution of the subsidy is mediated through individual/family choices and the subsidy/voucher program (at least by Cleveland design) is neutral to religion (see: http://www.oyez.org/cases/2000-2009/2001/2001_00_1751  – the dissent is worth listening to)

This is not to say, however that a state might not be vulnerable to legal challenge over a voucher system if it could be shown that the state had actually made policy decisions with the intent of guiding students and resources toward specific religious schools/institutions, but rather that the Cleveland model did pass muster. One might certainly scrutinize the NJ legislature’s choice to include Lakewood in NJOSA, with the Lakewood Yeshiva schools essentially as the primary beneficiary of the program. This would seem somewhat analogous to a 1990s scenario where NY State redrew one district’s boundaries so as to encompass a single homogeneous religious community (see: http://www.oyez.org/cases/1990-1999/1993/1993_93_517) Could NY State now go back and pilot a voucher program in Kiryas Joel instead? Would the choice of a homogeneous religious community to pilot a voucher program violate the establishment clause? Would it be substantively different from the more “neutral” Cleveland Voucher program? Maybe.

But, here’s the kicker with Tuition Tax Credit programs.  They are indirect subsidies, generated by providing full tax credits to corporations to gift money to a state approved (independently governed) entity (voucher governing body). Thus, a hole of “X” is created in the state budget. That hole is paid for by the fact that the state no-longer has to allocate state aid (>or= X) to local public districts where students accept the scholarship to attend private schools instead. It’s the mathematical equivalent of simply allocating the same sum in state revenue directly to private schools, but it’s achieved indirectly through a third party entity.

Who cares? Why is that important? If the state has gamed this system to favor and disproportionately subsidize a specific religion, can’t we still do something about it? The answer to that question is probably not, at least via legal action!  The U.S. Supreme Court has recently determined that taxpayers do not have legal standing to challenge the distribution of these indirect subsidies. As far as we can tell no one really seems to have a right to challenge these policies for potentially violating the establishment clause. If if was a voucher program- direct subsidy – there would most likely at least exist the right of taxpayers to challenge the policy in court, even if it was eventually determined that the policy was constitutional (sufficiently similar to the Cleveland model). But the indirect tuition tax credit approach cleverly permits diversion of tax revenues while negating entirely taxpayer rights to challenge that diversion. See: http://www.oyez.org/cases/2010-2019/2010/2010_09_987

In other words, the court never even gets to address the substantive question of whether the legislature has intentionally gone out of its way to favor and subsidize a specific religion.

Taxpayer rights under New Jersey’s current Education Policy Agenda

In light of recent controversy over the role of state appointed “emergency” managers in Michigan,   I’ve been pondering the state of taxpayer rights under the current education policy agenda(s) in New Jersey. For example:

• The state of New Jersey seems determined to maintain its control over Newark Public Schools, which, in effect, at least partially (if not almost entirely) negates the voice of local taxpayers in decisions over the operations of their schools.  http://www.nytimes.com/2011/12/12/education/newark-school-district-in-debate-over-state-control.html
• The State of New Jersey continues to maintain a charter authorization law which permits the state department of education to grant a charter to a school to operate in any district, and draw resources from that district, including those resources derived from local property taxes. But, local taxpayers have no authority in the distribution of local tax dollars to charter schools, authorized by the state.

By contrast, in Georgia, the state constitution grants authority to establish and maintain public schools within their limits exclusively to county and area boards of education (http://www.sos.ga.gov/elections/GAConstitution.pdf, page 60).  So, when the Georgia legislature approved a charter law granting authority to a state entity to approve charters (and draw on local resources), county boards of education challenged that provision in court and won.

One reasonable summary can be found here: http://www.accessnorthga.com/detail.php?n=238715, see also: http://www.earlycountynews.com/news/2011-05-18/Front_Page/Court_ruling_leaves_charter_schools_in_limbo.html

• The legislature continues to debate the adoption of a Tuition Tax Credit act, known as the Opportunity Scholarship Act. Tuition Tax Credits (or quasi-vouchers) create an indirect tax subsidy of private schooling, primarily religious private schooling in practice and in likelihood in New Jersey, by providing full tax credits to corporations to gift money to a state approved entity (voucher governing body). Thus, a hole of “X” is created in the state budget. That hole is paid for by the fact that the state no-longer has to allocate state aid (>or= X) to local public districts where students accept the scholarship to attend private schools instead. Here’s the taxpayer twist. If the state was to adopt a direct subsidy program (voucher), providing state tax dollars to religious institutions, citizen taxpayers might be able to bring a legal challenge to the use of their tax dollars on religious institutions. They might lose that challenge, as in the Cleveland voucher model which the US Supreme Court determined to be religion neutral because vouchers were provided to parents who were then able to choose religious or non-religious options, as well as to choose to take a voucher or not. So, even though nearly all private school alternatives in Cleveland were religious, the system, by its design was determined neutral. NJ taxpayers might, for example, challenge the legislative choice to include an exclusively religious community among the locations for eligibility was not religion neutral (different from Cleveland). BUT THE KICKER WITH A TUITION TAX CREDIT PROGRAM – even if it would pass constitutional muster regarding the establishment clause – IS THAT TAXPAYERS DON’T EVEN HAVE STANDING TO CHALLENGE THE CONSTITUTIONALITY IN COURT. NO TAXPAYER RIGHT AT ALL! (and we’ve been yet to figure out a party that would have standing to challenge such a model)  That’s right, under this indirect subsidy approach NJ taxpayers likely would not have the right – the legal standing – to challenge NJOSA even if the legislature decided to operate the program exclusively for Lakewood? (we’d have to see how that would play out).

Do we see a theme emerging here?

I tend to be somewhat ambivalent about deference to local control arguments.  The more local we allow our education systems to be operated and financed, the greater the likelihood of substantial inequities, especially given the economically and racially segregated structure of housing stock & neighborhoods (which did not occur by chance!).  Clearly, there’s a time and place for state intervention, including state intervention in local tax policy.  After all, as I’ve explained previously on this blog, local tax authority often only exists as a function of state policy (often in state constitutions). Unfortunately, what I’ve realized over the years is that state governments have refined their own art of taking policies intended to improve equity (greater state financing) and have often used those policies to reinforce inequities as great as those which might exist without state intervention.

In fact, in our school funding fairness report we found absolutely no relationship between the share of revenues coming from state as opposed to local sources, and increased equity (figure 15). This is somewhat disheartening, and has me really questioning the optimal governance for achieving the appropriate balance between liberty and equity (to concepts often in tension with one another in policy design).

For now, I’m stumped, but stick by my basic assumption that an equitable distribution of sufficient levels of financial resources are necessary underlying conditions for achieving an education system that is both equitable and excellent (regardless of the balance of public-charter-private schooling in the mix). Further, I still believe that state courts (elected or appointed) have (and should use where necessary) the authority interpret equity and adequacy requirements of state constitutions pertaining specifically to education (and financing of schools), but I struggle with the best methods for managing the aftermath of those decisions. Either representative majority rule, or direct tyranny of the majority can, and does lead to policies that can only be rectified by a (quasi)independent judiciary. But I digress.

I am, at the very least, concerned at the apparent disregard for citizen/voter/taxpayer interests that seems to be emerging under New Jersey education policy.

Mapping the Potential Distribution of NJ Opportunity Scholarships

A while back, when the NJ Opportunity Scholarship Act was a hotter topic, I wrote a post explaining how, depending on which districts were included in NJOSA and depending on how family income qualifications were set and eligibility for those already enrolled in private schools, the largest share of scholarships could actually end up going to Orthodox schools in Lakewood. After all, Lakewood is home to the largest private schooled population in the state. Not only that, most families in Lakewood whose children attend the Orthodox schools actually have income below the 250% poverty threshold.

Even outside of Lakewood, in lower income urban communities throughout the state, private school alternatives are sparse, and primarily religious.

Here’s the lay of the land. These data are from the NCES Private School Universe Survey of 2007-08, in addition to U.S. Census Data (from http://www.ipums.org).

First, here are the locations (with circle sizes indicating enrollment size), of NJ private schools – religious and non-religious:

This map shows some concentrations of private schools in the tightly packed urban northern NJ cities, as well as a large cluster in Lakewood, and some relatively large private schools in Somerset and Morris County.The blue numbers (on red bounded areas) indicate the number of 5 to 17 year olds enrolled in private K-12 schools in each Census Public Use Micro Data Area (from http://www.ipums.org). For example, the Lakewood PUMA has 17,260 children enrolled in private schools, compared to more typical amounts of 3,0000 to 5,000 for other PUMAs statewide.

Take away the religious schools and here’s what you’ve got:

Much of the concentration of private schooling in more densely populated urban areas evaporates when religious schools are excluded. Nearly all private schools in and around Lakewood are eliminated. The remaining large private schools which are non-religious tend to be in more affluent areas such as Princeton, or in Morris and Somerset counties, and some in Bergen and suburban areas of Essex County.

Here’s the Newark area including all private schools:

Again, blue numbers are total private school enrolled students. Circles are schools, with larger schools being larger circles. The Newark area has about 2,200 children in private schools in one PUMA, 3,400 (covered by key) in the other PUMA, and about 1,000 (red number) who are from families below the 250% income threshold for poverty in one PUMA and 2,200 in the other (partly covered by key).

Now here it is excluding religious schools:

Clearly, without immediate market adjustment, few non-religious choices exist for potential Newark OSA recipients. More on this at the end of the post.

Here’s Lakewood, with religious schools:

Note that Lakewood has about 17,000 children in private schools in the PUMA. Over 10,000 of those children are from families below the 250% income threshold for poverty.  That’s more than double the Newark amount (1022 + 2189) and more than any other part of the state.

Here’s Lakewood’s private school market after excluding religious schools:

Not much left, eh?

In my previous post, I explained the financial implications of including Lakewood in the mix for NJOSA, while using the 250% income threshold and while permitting access to scholarships for students already enrolled in private schools. https://schoolfinance101.wordpress.com/2010/05/19/njosa-the-lakewood-effect/ My estimates showed that the Lakewood community could make out with around $67 million in OSA scholarships, depending on the scholarship funding level/availability.

I do not know the current parameters of NJOSA.

In any case, even beyond Lakewood, the options for private school access are hardly religion neutral. Yes, the choice, in and of itself is neutral of religion. Parents can take the scholarship and use it at a religious school or not (which is essentially all that matters for passing muster in court). But the choice set does not provide any balance of options in most cases. Of course, the other reason this program is a non-issue in court is that Opportunity Scholarship programs provide a tax credit to business to hand over contributions to an independent entity which manages the scholarships, avoiding any direct government subsidy for religious education (replacing it with a convoluted, indirect mechanism). Last April, the U.S. Supreme Court determined that taxpayers have no standing to challenge such mechanisms (essentially tossing the case on the technicality that taxpayers don’t have standing to bring a legal challenge against such a mechanisms because taxpayers lack the ability to show that they are harmed by granting of a tax credit to corporations as opposed to expending their own tax dollars directly). So, to cut to the chase, there aren’t many if any legal options here, and not only because the choice is assumed neutral even though the choices aren’t, but rather because no-one has legal standing to challenge the convoluted financial subsidy structure of tuition tax credits.

Rather, these are substantive policy concerns.

Further, as I’ve shown in previous posts, the non-religious private schools in NJ tend to have per pupil expenses far above and beyond levels considered in NJOSA (https://schoolfinance101.wordpress.com/2010/03/23/would-8000-scholarships-help-sustain-nj-private-schools/), reducing the likelihood that these schools would open significant numbers of slots to scholarship recipients.

I’ve also pointed out that the oft stated policy objective of using NJOSA to help sustain NJ’s ailing private school sector is misguided: https://schoolfinance101.wordpress.com/2010/07/21/private-schools-public-education-policy-in-new-jersey/ In short, NJ’s private school sector isn’t necessarily ailing.

While it is possible that providing opportunity scholarships could lead to an expanded “lower cost” non-religious strata of private schools in NJ urban communities, it seems more than likely that individuals interested in testing these waters and starting a new school might instead opt to apply to establish a charter school and receive the higher per pupil subsidy.  Even the leading charter schools in the NY metropolitan area, including NJ, have learned that access to substantial external philanthropy is a necessity for providing a high quality education, and start-up private schools receiving smaller subsidies would have much more ground to make up. And that’s not easy as a start up.

As such, I’m skeptical that the choice set for OSA recipients would become significantly more neutral over time.  This is especially true where charters are increasingly able to cast themselves as nearly religious by focusing on culture/language and establishing in religiously homogeneous communities. Further, charters remain able to do so by authority of the State Department of Education only, and draw on local tax dollars regardless of local taxpayer preferences.

======

More on the diminishing rights of taxpayers in a future post. Note the interesting parallels between the lack of taxpayer standing to challenge Tuition Tax Credits for religious schools, and the lack of taxpayer control over the redistribution of local property tax revenues to state authorized charter schools (except in states where that authority is explicitly granted to local officials/governments, like Georgia). In the first, the state creates a convoluted mechanism which reduces state revenue, requiring the redistribution of existing taxpayer funds, but in such a way as to eliminate the rights of taxpayers to challenge that redistribution (even though the mechanism is constructed in such a way that channels tax exempt funds primarily to religious organizations). In the second, the state grants authority for an independent entity to set up shop in your neighborhood, and to the extent that entity (quasi-religous or not) can attract customers (students) it can also access your local tax dollars to subsidize its operations, without your consent. So much more to explore here. Working on a handful of related law review articles with legal scholar Preston Green of Penn State.

Private Schools & Public Education Policy in New Jersey

The commission on private schools established by former Governor Corzine has just released its report:

http://nj.gov/governor/news/reports/pdf/20100720_np_schools.pdf

This report is more fun than many recent reports in New Jersey because it actually has some data and citations. Nonetheless, I have at least a few concerns regarding the presentation of the data and implications drawn from it. I was particularly intrigued by the graph on page 7 – which I replicate below:

This graph shows an apparent catastrophic collapse of the private schooling sector in New Jersey… or does it? Look at that the Y (vertical) axis. The range is from 160,000 to 192,000.  Yeah… that makes for a really steep apparent drop off. Note also that this data is from a state department of education source and is not reconciled against any other source. So, a stretched Y axis to make it look really, really, really dramatic. No second look – second opinion. And, only a single aggregate count of private school kids to show a major across-the-board collapse.

Here’s a more detailed exploration, using two data sources: 1) The National Center for Education Statistics Private School Universe Survey and 2) the U.S. Census Bureau American Community Survey, via the Integrated Public Use Microdata System.

First, here are the number of private schools by type in New Jersey over time:

This graph shows that the only significant decline in numbers of schools occurs for Catholic Parochial schools. Other private school types hold their ground in total numbers of schools.

Next, here are the enrollment and in the second graph, enrollment adjusted for missing data.

As with numbers of schools, the most substantive decline is for Catholic Parochial schools. There is a smaller drop for Catholic Diocesan schools. Other schools stay relatively constant, with some reclassification occurring between Other Religious – Not Affiliated and Other Affiliated. Note that the corrected, weighted version in the second graph above shows a somewhat smaller decline in Catholic Parochial enrollment than the un-adjusted version.

Next, I address private school enrollment by grade level and as a share of the total population of students in public and private school. A drop in private school enrollment would only be significant if it occurred in a context of stable or growing overall student population.

Here’s the total school population by grade level:

And the private school population by grade level:

What we see in this second graph is that the Grades 1 to 4 population appears to be declining most.

Here’s the private school enrollment by grade level as a percent of total enrollment. Kindergarten private school enrollment as a share of kindergarten students has declined. But, other grade level private school populations have declined only very slightly as a share of all children statewide in the same grade level.

This much more refined picture, across two additional data sets casts some doubt on the significance of the first graph above. Is there really a massive collapse of private schooling in New Jersey? It doesn’t look that way to me.

Explanations and Policy Implications for Catholic Schooling in New Jersey

Indeed, there may be some cause for concern for Catholic Parochial schools which appear to be closing and losing enrollment. But this phenomenon is not unique to New Jersey. Others have attempted to shed light on why Catholic schools are struggling in many urban centers.  Catholic schools have tried to remain accessible to the middle class by holding tuition down. At the same time, costs have risen. Decades ago, Catholic schools relied heavily on unpaid, church affiliated staff. Now, nearly all staff are salaried. My own recent analysis suggest that the cost of operating many Catholic schools are quite similar to those for traditional public school districts. The gap between tuition and cost has grown substantially over time for these schools. That’s not sustainable.

Two recent reports provide additional insights regarding public policy forces that may be compromising the stability of Catholic schooling in particular:

1) This Pew Trust report on parental choices in Philadelphia suggests that the expansion of Charter schools has potentially cut into the non-Catholic enrollment in urban Catholic schools.

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Philadelphia_Research_Initiative/PRI_education_report.pdf

Notably, New Jersey has not expanded charter schools as quickly as other states. But, it remains possible that existing New Jersey charter schools have drawn some students away from urban Catholic schools. As such, if the state is truly concerned with the sustainability of Catholic schools, the state should evaluate the effect of charter expansion on Catholic school enrollment (and on teacher recruitment/retention).

2) This Thomas B. Fordham Institute report suggests that vouchers in other locations such as Milwaukee have been a double-edged sword for Catholic schools. Vouchers do not provide full cost subsidy and restrict charging tuition above the subsidy to cover the gap. As such, schools are required to take a loss for each voucher student accepted. Further, as Catholic schools take on more non-Catholic vouchered students, parishioner contributions tend to decline – because it is perceived that the Catholic mission of the school has been compromised.

http://www.edexcellence.net/doc/catholic_schools_08.pdf

This situation does not apply in New Jersey, but findings from other cities raise concern that an under-subsidized voucher or tuition tax credit like the proposed Opportunity Scholarship Act (NJOSA) could actually do more harm than good for many private schools.

Vouchers differ from other subsidies (like the transportation and textbook subsidies) because of the restriction on charging tuition to cover the margin between the subsidy level and actual cost.  Some schools may subvert this requirement with strongly implied requirements for “tithing” as a substitute for tuition – including voucher receiving families. In fact, families could be obligated to tithe sufficient income to the private schools (or the religious institution that governs those schools) such that the family then qualifies for the tax credit program. The state should attempt to guard against this possibility in the design of any related policy.

Follow-up information:

A reader was kind enough to send me this link: http://www.avi-chai.org/census.pdf

Page 23 of this census report on Jewish school enrollment explains:

The other side of the geographic distribution picture is the concentration of schools in New York and New Jersey, as well as the overwhelming Orthodox domination in these two states. New York has 132,500 students, up from 104,000 ten years ago, while New Jersey has nearly 29,000 students, up from 18,000 in 1998. New Jersey’s gain is nearly all attributable to Lakewood, although there has been meaningful growth in Bergen County and the Passaic area. At the same time, Solomon Schechter enrollment in New Jersey has declined precipitously.

Clearly, the Orthodox schools in New Jersey are not in a free fall, as implied by the aggregation of all private schools in the private school commission report.

Another reader sent me this link:  http://www.njpsa.org/userfiles/File/EO161.pdf

This link explains the charge of the commission. It would seem to me that the final report has strayed somewhat from this charge.

New Jersey Opportunity Scholarship (NJOSA) Study Notes & Review

It’s kind of like an end of semester blogging time here – a good time to review various posts on specific topics related to New Jersey education policy. My apologies to those of you looking for issues of national/broader interest. I’ll get back to those issues after this post.

In this post, I provide a brief summary of my previous posts related to the New Jersey Opportunity Scholarship Act. I have a handful of posts specifically related to this proposed legislation. But I have many others related to the private school marketplace, private school costs and quality.

In short, NJOSA is a “neo-voucher” policy which provides tax breaks to corporations that contribute to a scholarship pool, which then provides vouchers to children to attend private or other schools. Currently (NJOSA is being reworked as I write this), those vouchers would be made available to a combination of children attending “failing” schools and other income qualified children across New Jersey. In my series of posts on NJOSA, I point out that:

Finding #1) One of if not the biggest beneficiary of NJOSA is not a) the children trapped in poor urban (Newark, Camden, Jersey City) schools, or b) cash-strapped urban Catholic Schools (which lack sufficient other private contribution support to keep afloat), but rather, the highly racially and religiously segregated Lakewood Orthodox Jewish community and its schools. They constitute the largest number – by far – of “income qualified” current private school enrolled children in the state.

NJOSA & THE LAKEWOOD EFFECT

This finding was reported a few days ago in the Asbury Park Press

Finding #2) The premise that children will be saved from failing public schools with these paltry payoffs to low-end private schools is a stretch at best. Good private schools are expensive, and often more expensive than even the highest spending nearby public schools. The Milwaukee studies provide useful insights as well, showing little or no effect after much more than a trial period.

Would Scholarships Help Sustain NJ Private Schools?

NJOSA Must Read Items

Finding #3) Providing these vouchers might (would likely) increase private school enrollment, making certain private schools more accessible to low-income families. And, some students may benefit from this (while others may not). But, such a program will likely do little to cure the fiscal woes of cash strapped private schools. In fact, some have argued specifically in reference to Catholic schools that parishioner philanthropy to the schools may decline as those schools take on more non-Catholic students through vouchers, causing the school’s mission to drift.

This finding was covered by AP and reported in a handful of NJ outlets

Would Scholarships Help Sustain NJ Private Schools?
For more information on private school markets, costs and quality, see:

Major National/Regional Study on the Costs of Private Schooling by Type and Location, and Relationship to Quality Measures
http://www.epicpolicy.org/files/PB-Baker-PvtFinance.pdf

See also:

Washington Post Coverage of National Study
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/30/AR2009083002335.html

Education Week Op-Ed on National Study:
http://www.edweek.org/login.html?source=http://www.edweek.org/ew/articles/2009/08/19/01baker.h29.html&destination=http://www.edweek.org/ew/articles/2009/08/19/01baker.h29.html&levelId=2100

NJOSA & the Lakewood Effect

UPDATE: As I understand it, NJOSA has now been revised to specifically target Lakewood as a pilot site for the vouchers (1 of 8 locations). Consider the analysis below in that light. This revision potentially allows for a greater share of overall NJOSA funding to flow specifically to Lakewood students. Further, this revision raises fun/interesting legal questions.

Yes, it is true that the Zelman case found that the Cleveland voucher program did not violate the establishment clause of the first amendment by providing vouchers to children who in large numbers chose to attend religious schools. The court acknowledged that the voucher policy itself was neutral w/respect to religion. However, not too long before Zelman, in Kiryas Joel (NY), the court found that the State of New York had violated the establishment clause when it singled out Kiryas Joel Village in a statute altering the boundaries of local public school districts to specifically serve the exclusively religious community.

So, for example, if a the state of NY were to decide to operate a voucher program, and specifically pilot test that program in Kiryas Joel Village, would such a policy be considered religion neutral, as under Zelman? Or might that policy violate the establishment clause because of the exclusively religious community selected (Kiryas Joel)? Clearly Cleveland (and its private school sector) is far more diverse than Kiryas Joel, providing at least some argument in favor of neutrality. Now, Lakewood is less homogeneous than Kiryas Joel, but clearly more like Kiryas Joel than it is like Cleveland. Thoughts from my legal scholar friends? (consider demographic & pvt. school sector analysis below – written in response to different iteration of NJOSA).

SLIDES: Lakewood Effect Slides

The New Jersey Opportunity Scholarship Act (NJOSA) is being proposed on the basis that $6,000 vouchers for children in grades k-8 and $9000 vouchers for children in grades 9-12 would a) provide much-needed financial relief for financially ailing urban Catholic schools and b) would provide poor and minority children the opportunity to escape chronically under-performing, poor urban New Jersey schools. Implicit in Part B of the claims is that the primary beneficiaries of the voucher program – aside from urban Catholic schools — would be poor and minority children attending so-called “failing” schools in the state’s major urban centers, such as Camden, Newark, Paterson or Jersey City.

I have previously disposed of the first claim – that these vouchers would help financially sustain private schools in New Jersey – here: https://schoolfinance101.wordpress.com/2010/03/23/would-8000-scholarships-help-sustain-nj-private-schools/ Another study that reaches the same conclusion is a 2009 report which found  Milwaukee Vouchers are not yielding big financial benefits for the city’s Catholic schools, even where the voucher level exceeded $6,300 in 2005-06 (see: http://www.edexcellence.net/doc/catholic_schools_08.pdf)

But let’s take a closer look at who will really benefit if the New Jersey voucher proposal becomes law.    Where are most children in New Jersey already in private school?  More specifically, where are most New Jersey children already in private school with a family income  low enough (below 250% of the poverty level) to qualify for the NJOSA vouchers?  It may seem highly unlikely that many low-income children would already be attending private schools. Indeed, NJOSA is not “intended” to underwrite the education of children already in private schools, but rather to assist children “trapped” in low performing public schools to attend nearby private schools.  But, NJOSA includes from the outset a provision that would allow low-income families whose children already attend private schools to access the vouchers, setting aside  at least 25% of the total available voucher resources in any given year for such children (as I understand it).

First, where are the largest numbers of private school children in New Jersey?

As it turns out, the largest total numbers of privately schooled children are indeed in the Newark area and the second largest number in Bergen-Passaic (combined).  The third largest total numbers of private schooled children are in the Lakewood (Ocean County) area.  However, when one looks only at those children who would qualify for the NJOSA vouchers, the largest total number are in Lakewood – over 13,000 in 2008.  Lakewood has more  than Newark, more  than Jersey City, and more  than anywhere else in New Jersey, despite having much smaller total population.  Here are the data:

The next data we look at are from Public Use Micro-data Areas, or PUMAs – a construction of U.S. Census – which are smaller than metropolitan areas and allow for a relatively precise focus on the areas such as Lakewood. (PUMAs have populations of at least 100,000)

Because the Newark metropolitan area has far more than 100,000 residents, Newark would be carved into multiple PUMAs, whereas Lakewood would fall within one. But, the total populations of the areas would be more similar than comparing metro areas like those above.

Ranking PUMAs by private school enrollment, we find that the largest total private school enrollment –  BY FAR – occurs in Lakewood’s PUMA, with about 17,000 children between 5 and 18 in private schools.  About 8% of private schooled children statewide are in this PUMA.  More striking however are the numbers of private schooled children who would qualify for the NJOSA vouchers.  In Lakewood’s PUMA, that number exceeds 10,000 children. The next highest PUMA has under 1,500 who would qualify.  Bottom line: Lakewood’s PUMA has over 20% of the state’s poor children who currently attend private schools.

The following tables present the data:

But this is only the beginning of the Lakewood story.   As it turns out, the vast majority of children in Lakewood are in private, not public schools, which occurs nowhere else (to this extreme) in the state of New Jersey.

And, as it turns out, Lakewood’s public schools are currently “majority minority” (Black and Hispanic students:

And, there are many, many private schools in Lakewood. The vast majority of those schools and the students who attend them are Orthodox Jewish schools which are almost invariably 100% homogenous – listed as “white” – in sharp contrast with the majority minority makeup of the township’s public school system.

As it turns out, the sum total of children attending the Jewish schools in Lakewood is approximately the same as the sum total of the low income (<250% poverty level) children attending private schools in Lakewood, or about 11,000. Needless to say, there is likely significant overlap between the children in Lakewood in private schools from low income families and the children in the Orthodox schools in Lakewood .

Note that 10,395 of the reported 10,470 (99.2%) poor, private schooled children in Lakewood PUMA were listed as “white” in the Census American Community Survey data from 2008. Only Lakewood’s Jewish schools match that demographic (in that geographic area).  And they are nearly (if not entirely) all identified as low-income.

So who cares? Why does matter? What are the implications? Well, as it turns out this intriguing distribution of low-income private schooled children would potentially qualify Lakewood’s Orthodox Jewish schools for a sizeable revenue windfall from the NJOSA voucher program.  It may not necessarily be enough to cover actual “costs” of operating these schools, but the publicly funded vouchers might go a long way to when combined with other resources.

Setting aside phase-in limits on the amount of total voucher funding under NJOSA, if all future children attending Lakewood Orthodox schools received vouchers each year, and if those schools maintained roughly the same enrollment as in 2008, the public revenue provided through vouchers could generate over $60 million per year for these schools.

Let’s sum up.  One of if not the biggest beneficiary of NJOSA is not a) the children trapped in poor urban (Newark, Camden, Jersey City) schools, or b) cash-strapped urban Catholic Schools (which lack sufficient other private contribution support to keep afloat), but rather, the highly racially and religiously segregated Lakewood Orthodox Jewish community and its schools. They constitute the largest number – by far – of “income qualified” current private school enrolled children in the state

This is not quite the narrative about the NJOSA voucher proposal I’ve been hearing about.

NJ Opportunity Scholarship: Must Read Items

Very little time today. Big deadlines and lots of data to analyze. Since the debate is now heating up over the NJ Opportunity Scholarship Program, I thought I’d put out there a few items which really should be part of the debate on this topic.

1) The April 2010 report on the long run effectiveness of the Milwaukee Voucher Program: http://www.uark.edu/ua/der/SCDP/Milwaukee_Eval/Report_15.pdf This report concludes:

The primary finding in all these comparisons is that, in general, there are few statistically significant differences between levels of MPCP and MPS student achievement growth in either math or reading two years after they were carefully matched to each other. In one of the ways of estimating these results, focusing only on those students who have remained in the public or private sector for all three years, private, voucher students are slightly behind MPS students in mathematics achievement growth.

2) My Summer 2009 report on the “cost” and supply of private schooling: http://epicpolicy.org/files/PB-Baker-PvtFinance.pdf It is important to understand that my point in this report was NOT that private schools are either more or less expensive than public schools in the same labor market. They are simply more varied. They are more varied in what they spend, what they provide and what they can achieve. With private schools, you get what you pay for.

I write about the specifics of the New Jersey context here: https://schoolfinance101.wordpress.com/2010/03/23/would-8000-scholarships-help-sustain-nj-private-schools/, pointing out that claims that average private school costs in NJ are $6,000 (elem) and $9,000 (secondary) are entirely unfounded.

Here, I provide a quick snapshot of cost/quality issues in private schooling in response to other recent media reports: https://schoolfinance101.wordpress.com/2010/02/20/stossel-coulson-misinformation-on-private-vs-public-school-costs/

The premise that children will be saved from failing public schools with these paltry payoffs to low-end private schools is a stretch at best. Good private schools are expensive, and often more expensive than even the highest spending nearby public schools. The Milwaukee studies provide useful insights as well, showing little or no effect after much more than a trial period.

Would $8,000 Scholarships help Sustain NJ Private Schools?

Note: This was written prior to the announcement that the scholarship amounts would be $6000 for elementary and $9000 for secondary schools. The same logic and findings apply, though to an even greater extreme in light of these numbers.

Part of the argument being made for providing $8,000 scholarships for students to attend private schools in New Jersey is that those scholarships would help financially sustain struggling New Jersey private schools. I published an extensive report on private school costs last summer, here: http://epicpolicy.org/publication/private-schooling-US

In this report, one issue I address is the fiscal problems of urban Catholic schools which have struggled to survive on shoestring budgets. The reality is that most operate with a very large differential between tuition charged and actual operating costs. In 2007-08, average tuition charged by Catholic Parochial and Catholic Diocesan schools in New Jersey was about $4,000 and $5,000 respectively at the elementary level, and about $9,000 at the secondary level (based on the very limited sample in the Schools and Staffing Survey of 2007-08, National Center for Education Statistics). Private non-religious school tuition was about $11,000 at the elementary level and $18,000 at the secondary level. the weighted average tuition across all school types for New Jersey private schools was $10,206. So, even keeping this figure in mind… if tuition held constant from 2007-08 to 2010-11, the $8,000 scholarship would fall $2,000 short of average tuition… not even average cost.  Clearly, private schools on average would be taking a loss to accept these scholarships, unless only the lowest spending private schools accepted the scholarships or unless the scholarships were to stimulate massive additional philanthropy outside of the tax credit program.

But again, these above tuition estimates are based on relatively small numbers of schools and the schools from these national surveys cannot be listed individually because of confidentiality issues.

Most importantly those tuition figures don’t represent actual total costs of operating and maintaining these schools. All rely on some form of philanthropy and/or church subsidy to cover full costs. Below is a summary graph of IRS Tax Filing data on New Jersey private schools (2007 tax year).  Schools that most consistently report their financial data (by obligation) are those which are not officially religiously affiliated (specific church), but some religious schools do. The graph below includes  Total Expenditures per enrolled pupil, where Total Expenditures are from the IRS 990 (and include all expenditures including those for capital in the given tax year and other contracted services) and enrollment data are from the National Center for Education Statistics Private School Universe Survey.

Notably absent in the graph below, but included in the tuition averages above are Catholic schools, which represent approximately 67% (seems to vary by year of data) of students in private schools in New Jersey.

Most schools represented by the averages below would need to take a substantial loss for each child accepted on the $8,000 scholarship (in 2007).  There are no doubt interesting quirks (large capital expenditures for some?) and omissions (suspiciously low expenditures for others) in these individual school reported data, but they are illustrative nonetheless. Boarding schools are excluded.

An important feature here is that the only schools that would not operate at a loss on the proposed voucher level are religious schools. That is, we should expect that at this voucher level, the vast majority if not all students using the voucher would have to use it at private religious schools unless private non-religious schools were able to find substantial additional resources to offset large per pupil losses (cost – voucher differences).

In general, an $8,000 voucher would likely do little to help sustain fiscally stressed private schools in New Jersey because the voucher does not cover operating costs.

Providing these vouchers might (would likely) increase private school enrollment, making certain private schools more accessible to low-income families. And, some students may benefit from this (while others may not). But, such a program will likely do little to cure the fiscal woes of cash strapped private schools. In fact, some have argued specifically in reference to Catholic schools that parishioner philanthropy to the schools may decline as those schools take on more non-Catholic students through vouchers, causing the school’s mission to drift.

In a related recent post, I point out that in general, when it comes to these large differences in spending by private school sector, you get what you pay for: https://schoolfinance101.wordpress.com/2010/02/20/stossel-coulson-misinformation-on-private-vs-public-school-costs/

From previous post:

• Private independent day schools which provide small class sizes with highly academically qualified teachers spend well above nearby public schools.
• Catholic schools, where they report their finances (not the crude survey summary data of tuition and expense compiled annually by the National Catholic Education Association) spend marginally less than nearby public schools (but charge much lower tuition than cost), perform about the same if given the same kids and have comparably qualified teachers in terms of academic preparation. Note that Catholic schools in trying to operate on a shoestring have been financially failing at an alarming rate. That is how markets work when you try to hard to price your product below the cost of maintaining quality (a more friendly spin being that the social service mission of urban Catholic schools has outpaced church philanthropy). I discuss this extensively in the report.
• Conservative Christian schools (to the extent they can be lumped together) operate at much less per pupil than traditional public schools and have lower outcomes given the same students and have disturbingly academically weak teaching staff based on national survey data.

Note: According to: http://www.njsendems.com/release.asp?rid=3254

The proposed voucher amount is to be $6,000 (elem) to $9,000 (secondary). The link above claims:

The $6,000 to $9,000 amount is the current average cost per student at non-public schools…

This statement is completely absurd… and quite simply FLAT OUT WRONG! According to what source? Does actual data matter at all here? Wow! Even Cato, which grossly underestimates private school costs estimates the NYC metro average at $10,500 for 2009 (see first section of this post, Cato link).

Mean per Pupil Spending by Private School Type

Distribution of Private School Students in New Jersey

Distribution of per Pupil Expenditures by Private School Type