Mapping the Potential Distribution of NJ Opportunity Scholarships

Posted on December 13, 2011



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.

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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.