Punishing Success: The Governor's Proposed Education Budget in Wisconsin and the SAGE and Voucher Programs

A Report by the People For the American Way Foundation

Table of Contents

Introduction

Parents, civic leaders, educators and others throughout Wisconsin have raised serious concerns about the adequacy and equity of education funding in Governor McCallum’s proposed budget for the 2001-03 biennium. Perhaps nowhere are the problems in the Governor’s budget more clearly revealed than in the provisions that cut back SAGE—a popular and successful statewide class size reduction program for poor children—but continue to increase funding for the Milwaukee private school voucher program. In fact, the budget shortfall for SAGE—$31.6 million—is about the same as the increase in funding for Milwaukee’s private school vouchers—at $27.5 million. In effect, the cuts to this statewide public school program help fund private school vouchers in a single district. Indeed, even eliminating extra spending for the voucher program beyond the cost of private school tuition could be more than enough to restore the cutbacks in SAGE funding.

This analysis focuses on two aspects of the Governor’s budget proposal with respect to SAGE and the Milwaukee voucher program: funding and program evaluation. The budget’s decreased commitment to SAGE, as opposed to fully funding the voucher program, parallels the Governor’s academic evaluation plan. The quality of SAGE (along with other public school) assessments are seriously at risk as a result of the Governor’s proposed creation of a politically-appointed assessment board. Even worse, the voucher program would retain its special status as a publicly-funded state program with virtually no academic accountability, no program evaluation component and no student testing requirements. Both with respect to funding and evaluation of SAGE and vouchers, the Governor’s budget would seriously harm education for many Wisconsin students.

The Student Achievement Guarantee in Education (SAGE) Program

SAGE is a statewide program that enjoys strong bipartisan support and has demonstrated success in improving academic performance for low-income and minority students. Started in 1996 and targeted to low-income students in grades K-3, SAGE reduces class sizes to a 15:1 ratio. K-1 classes are reduced in year one, K-2 in year two, and K-3 in years 3-5. In the program’s first year, school districts possessing one school with at least a 50% student poverty rate were eligible to apply for SAGE funding for that school or any school in the district with a poverty rate of at least 30 percent. Since then, the program has expanded so that almost any school was able to apply in the 2000-01 school year.

The funding mechanism, however, remains the same: funding is calculated on the number of low-income students in the school for grades K-3. SAGE provides participating schools with $2,000 per low-income student to reduce classes to 15 pupils per teacher and requires participating schools to hold extended hours and provide community services to district residents. SAGE program guidelines also require the development of rigorous curriculum and staff development, and assessment systems. Approximately 60,000 students statewide participate in SAGE.

In a recent evaluation involving SAGE and comparison schools, 29 of the top 30 classrooms in terms of student achievement in language arts, reading and math were SAGE classrooms. The achievement gap in language arts and math between African American and white first grade students was reduced in SAGE classrooms while it increased in comparison schools. African American second and third grade students in SAGE schools scored higher on every test than did African American students in the comparison schools.

These findings are consistent with what has been learned from a comparable Tennessee class size reduction experiment, STAR. Researchers there have followed the progress of students who were in small K-3 classes in 1985-89, and then returned to regular-sized classes, compared with students in regular-sized classes all the way from K-12. Not only did those who were in small classes in K-3 outperform their peers in large classes during those years, but even afterwards they continued to outpace them in math, reading and science through 8th grade—and the gap between the small and regular-class test results increased as time went on as well. In high school, those who had been in small K-3 classes had lower retention rates and were more likely to graduate and take advanced math and English courses, even while maintaining higher GPAs. STAR project small-class students were also more likely to take college entrance exams than their regular-class peers. Consistently, too, all of these benefits are even more evident for minority and disadvantaged students. For example, the black/white gap in the probability of taking the ACT or SAT test for college entrance was cut in half for those who had been in small classes, and ACT scores themselves for blacks who had been in small classes were notably higher than for blacks who had been in large classes.

The Milwaukee Voucher Program

The Milwaukee Parental Choice Program, started in 1990, is the nation’s first publicly-funded voucher program. Also designed to target low-income students—originally defined as those whose family income did not exceed 175% of the poverty rate—the program provides state taxpayer funds to be used for tuition at private and religious schools in Milwaukee. Originally funded entirely through Milwaukee’s portion of general school state aid, half the program is now funded by a reduction in state aid to the Milwaukee Public Schools (MPS), and the other half through a reduction in general state aid to Wisconsin’s other 425 school districts. For the 2001-02 school year, this amounts to a $29.3 million reduction for MPS and $29.3 million reduction for Wisconsin’s 425 other districts.

Unlike the SAGE program, the Milwaukee voucher program has not been evaluated since 1995, when the Legislature eliminated the academic evaluation requirement for the program. Instead, the Legislature provided only for a single audit by the Wisconsin Legislative Audit Bureau (WLAB) in the year 2000. In this audit, the state auditor specifically noted that “Some hopes for the program—most notably, that it would increase participating students’ academic achievement—cannot be documented, largely because uniform testing is not required in participating schools.” The audit also pointed out its inability to ascertain the progress of special education students in the voucher schools due to the fact that voucher schools are not required to identify and report students with special needs.

The state superintendent of education expressed similar concerns regarding the voucher program’s lack of accountability in his response to the WLAB audit: “We believe there is a compelling public interest in evaluating the educational outcomes of the program and reporting those outcomes to the legislature and the parents who are considering the program for their children. Requiring participating Choice schools to administer the state’s standardized tests to Choice pupils would provide the schools with a useful tool to measure individual student achievement as well as provide legislators and others with valuable comparative information about individual MPCP [voucher] schools and the Milwaukee Public Schools.” Noting that Wisconsin has made a considerable investment in assessment, he stated that: “The department believes this same level of accountability should be required of private schools participating in the Choice program. I believe the legislature should address this issue in future deliberations about the program.”

Prior to the legislature’s elimination of the academic evaluation in 1995, the state had commissioned Professor John Witte at the University of Wisconsin at Madison to direct the evaluation of the Milwaukee voucher program. Witte found no appreciable academic gains for students in the voucher program in his five-year evaluation. Pro-voucher researcher Paul Peterson reevaluated Witte’s findings and claimed to find a statistically significant gain for voucher students in the third and fourth years of the program, an assessment disputed by many in the research community, who explained that by the third year the control and experimental groups were not comparable, and that by the third year those who remained were an academically superior subset, not a random sample. A third study by Princeton researcher Cecilia Rouse corroborated Witte’s findings in that she found no differences between MPS and voucher reading gains, but did find a small increase in voucher math achievement. One of her most interesting (and least discussed) findings is that, controlling for student characteristic variables, Milwaukee public schools that have small class sizes and additional state funding that serve low-income populations keep pace with voucher schools in math gains and substantially outpace them in reading.

Despite the lack of conclusive evidence about the academic value of the voucher program, and the recommendation of the state’s own superintendent of education, the lack of voucher program evaluation would not change under the Governor’s proposed budget. As discussed further below, the Governor would merely provide private schools with the option of participating in tests that public schools must take. If private schools choose to do so, the state would administer and grade tests.

Program Evaluation

The Governor’s budget proposes major revisions with regard to academic evaluation. Under current law the Department of Public Instruction is responsible for evaluating all schools (including the SAGE program), identifying low-performing schools, and administering pupil assessments. The Governor’s budget creates a new “Board on Education Evaluation and Accountability” under the Department of Administration. This removes all assessment and academic evaluation from the Department of Public Instruction. This Board would not only be responsible for evaluating the SAGE program but would also administer the pupil assessment program for the entire state.

Interestingly, the five-member board would be appointed by the Governor, and would not require Senate confirmation. Even more disturbing for a Board whose primary purpose is to evaluate academic achievement, only one member of the Board would be required to have any experience in education evaluation and assessment.

By contrast, the Board would have no evaluative authority over the voucher program. The Board would be required to provide assessments to Milwaukee’s private voucher schools only if those schools choose to administer state assessments, but may not require private schools to do so. In fact, the Board is specifically prohibited from disclosing the results of any exams administered by private voucher schools except in the aggregate. In other words, the Board may not release school-level test scores for private schools, although all public school scores are a matter of public record. Given that voucher advocates tout vouchers as a market-based reform, this prohibition against the release of test scores begs the question: if a market-based reform like vouchers is based on parental satisfaction and the ability to evaluate and choose a product based on performance, doesn’t the prohibition on publicizing test scores directly contradict the stated intent of the program?

As has been the case since 1995 when the Legislature eliminated the academic evaluation component of the voucher program, the Governor’s budget proposal allows the voucher program to continue without any evaluation. In fact, the Board is only authorized to do a study of the voucher program if the Board receives sufficient funds from private sources to do so. Beyond the question as to whether it is appropriate for a state to base program assessment on the availability of private funding, Wisconsin’s past history with privately-funded assessments should raise a red flag. When the official evaluator of the voucher program found no academic gains for voucher students from the program’s inception through 1995, pro-voucher researcher Paul Peterson was contracted by voucher supporters to re-evaluate the program. His more positive findings have spurred controversy but have not served to clarify the program’s progress.

Furthermore, the reliance on private funding opens the door to bias. One can easily imagine a scenario in which a pro-voucher governor appoints a pro-voucher Board which solicits a funder such as the Milwaukee-based Bradley Foundation (whose president once stated that its $10 million in contributions over the past thirteen years helped make vouchers a reality) to contract an evaluation with a pro-voucher think tank.

Conclusion

SAGE is a statewide program that has both a proven track record in helping low-income and minority students, as well as strong bipartisan support. In contrast, the Milwaukee voucher program has no proven track record—in part because the program itself lacks adequate accountability provisions—and is politically divisive. It takes money away from aid to public schools across the state and gives it to private schools for a small number of students.

Although SAGE is targeted to low-income students, the program has the added benefit of aiding all students in that class regardless of income by providing them with a better learning environment. In contrast, the Milwaukee private school voucher program removes individual students from their public school classrooms while doing nothing for their classmates. In fact, the voucher program not only fails to aid the majority of public school students, it actively harms them by reducing state aid to their schools and school districts.

Regardless of one’s views regarding the Milwaukee voucher program, the Governor’s proposed increase for voucher funding and simultaneous cutbacks to SAGE reward an unproven program and punish success. This budget substantially cuts an extremely successful program that helps low-income and minority students throughout Wisconsin and contains a rigorous evaluation component built into it. At the same time and by about the same amount of money, the Governor’s budget increases taxpayer funding for a private school voucher program with no measurable track record, and in fact expands the program to include higher-income students. The voucher program would continue without required evaluation or accountability measures despite the recommendations by both the state auditor and the superintendent of public instruction to the contrary. And the budget does nothing to correct the taxpayer payments to private schools that exceed tuition. The Governor’s budget for education is, in sum, bad for Wisconsin taxpayers and worse for Wisconsin’s students.

Endnotes

  1. Student Achievement Guarantee in Education (SAGE) –FACT SHEET—April 13, 2001, Wisconsin Department of Public Instruction.
  2. Schools that elect to participate in SAGE must reduce class sizes for all students throughout the grade, not simply in those classes with low-income students since to do otherwise would result in economic segregation of students. SAGE therefore has a multiplier effect, helping all students at that grade level. Approximately 28,000 low-income students are included in the approximately 60,000 students who are in 15:1 classes through SAGE. As per the Wisconsin Department of Public Instruction, April 2001.
  3. Alex Molnar, Philip Smith, and John Zahorik, “1998-99 Results of the Student Achievement Guarantee in Education (SAGE) Program Evaluation,” Milwaukee, WI: Center for Education Research, Analysis, and Innovation, University of Wisconsin-Milwaukee, December 1999; Alex Molnar, Philip Smith, and John Zahorik, “1999-2000 Evaluation Results of the Student Achievement Guarantee in Education (SAGE) Program,” Milwaukee, WI: Center for Education Research, Analysis, and Innovation, University of Wisconsin-Milwaukee, December 2000.
  4. Debra Viadero, “Tennessee Class-size Study Finds Long-term Benefits,” Education Week, May 5, 1999; “Benefits of Small Classes Pay Off at Graduation,” roject STAR News, Lebanon, TN: Health and Education Research Operative Services (HEROS), Inc., April 1999.
  5. Helen Pate-Bain, B. DeWayne Fulton, and Jayne Boyd-Zaharias, “Effects of Class-size Reduction in the Early Grades (K-3) on High School Performance: Preliminary Results (1999) from Project STAR, Tennessee’s Longitudinal Class-size Study,” Lebanon, TN: Health and Education Research Operative Services (HEROS), Inc., April 1999; “Benefits of Small Classes Pay Off at Graduation,” Project STAR News, Lebanon, TN: Health and Education Research Operative Services (HEROS), Inc., April 1999.
  6. Alan B. Krueger and Diane M. Whitmore, "Would Smaller Classes Help Close the Black-White Achievement Gap?" Princeton, NJ: Princeton University, January 2001.
  7. ibid. A recent report by the pro-voucher Wisconsin Policy Research Institute (WPRI), in making the case that there is no SAGE impact on student achievement beyond first grade, seeks to link this claim to what it argues are similar limitations in the results from the Tennessee STAR experiment. Charles M. Achilles, STAR Principal Investigator, has pointed out that the WPRI report ignored many important publications on STAR from the last several years and, instead, relied on the work of Erik Hanushek and his now widely-criticized methods to make the argument that class size reduction is not a cost-effective intervention. By so doing, they have discounted the overwhelming evidence that for students who spend three or four years in smaller classes the positive benefits on student achievement and educational outcomes are both immediate and long-lasting. See Wisconsin Policy Research Institute, “The costs and benefits of smaller classes in Wisconsin: A further evaluation of the SAGE program,” Wisconsin Policy Research Institute Report, vol. 13, no. 6, September 2000; Charles M. Achilles, “A review of ‘The costs and benefits of smaller classes in Wisconsin,'” Education Policy Project, Center for Education Research, Analysis, and Innovation, University of Wisconsin - Milwaukee, September, 2000.
  8. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p.p. 544-545.
  9. Letter of Transmittal for An Evaluation: Milwaukee Parental Choice Program, Janice Mueller, State Auditor to Senator Gary R. George and Representative Carol Kelso, Co-Chairpersons, Joint Legislative Audit Committee, February 2, 2000.
  10. Wisconsin Legislative Audit Bureau Audit Summary: Milwaukee Parental Choice Program. February 2000.
  11. Correspondence from John T. Benson, Superintendent, Department of Public Instruction to Janice Mueller, State Auditor, Legislative Audit Bureau, January 25, 2000, An Evaluation: Milwaukee Parental Choice Program, Appendix VII, February 2000.
  12. John Witte, et.al., Fourth Year Report: The Milwaukee Parental Choice Program (Madison, WI: Wisconsin Department of Public Instruction, 1994), p. 2.
  13. Jay Greene, Paul Peterson, and Jiangtao Du, The Effectiveness of School Choice in Milwaukee: Secondary Analysis of Data from the Program’s Evaluation, (University of Houston, Harvard University: John F. Kennedy School of Government) p. 3.
  14. Henry M. Levin , “Educational Vouchers: Effectiveness, Choice and Costs,” Journal of Policy Analysis and Management, Vol. 17, No. 3, 373-392 (1998), p. 377; Peter Cookson, correspondence.
  15. Cecilia Elena Rouse, “Schools and Student Achievement: More Evidence from the Milwaukee Parental Choice Program,” Economic Policy Review, March 1998, vol 4, No 1; pp 61-76.
  16. ibid. Recent analysis shows that academic gains made by poor, African American students who were in the Tennessee STAR experiment small classes were about double those of similar students in a three-city study of school vouchers (see Alan B. Krueger and Diane M. Whitmore, "Would Smaller Classes Help Close the Black-White Achievement Gap?" Princeton University, January 2001.)
  17. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p.p. 551-552.
  18. State of Wisconsin Department of Public Instruction Memo, March 1, 2001: “SAGE Budget Update and Notice of Aid Transmittal.”
  19. Biennial SAGE funding estimates as per the Wisconsin Department of Public Instruction, April 2001; 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 537.
  20. Increases in funding are calculated with respect to expanding the program to include the approximately 400 new schools that joined SAGE in 2000-01 in K-3 class size reduction. This increase is added to the base funding for the program of $58.7 million. Source: The Wisconsin Department of Public Instruction (DPI).
  21. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 537.
  22. State of Wisconsin Department of Public Instruction Memo, March 1, 2001: “SAGE Budget Update and Notice of Aid Transmittal.”
  23. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 544.
  24. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 545.
  25. Although voucher advocates argue that the voucher program aids MPS by taking students out of the public school system and that costs would increase without vouchers, this ignores the fact that many of the students in the voucher program were never in Milwaukee’s public schools to begin with. For example, in this year alone, approximately 18.7% of the voucher students either did not previously attend school or went to private school in the previous year. Only 20% of the voucher students came from MPS, while 60% were already enrolled in the voucher program. Of this 60% already enrolled in the voucher program, a large percentage attended private schools without taxpayer aid in previous years. In the 1998-99 school year, more than 36% of the voucher students had attended private school in the previous year. Many of these students remain in the program, which accounts for the increase in percentage of students enrolled in the voucher program who had been in the program the year before from 20% in 1998-99 to 60% in 2000-01. Source: DPI Fact Sheets “Milwaukee Parental Choice Program,” 1998-99 and 2000-01.
  26. The Forty Percent Surcharge: How Taxpayers Overpay for Milwaukee’s Private School Voucher Program. Egen, Holmes and Mincberg, People For the American Way Foundation, August 2000.
  27. This calculation is based on an average of 40% surcharge that Wisconsin state taxpayers paid to the voucher program in excess of private school tuition in the 1998-99 school year. This gap between tuition and state voucher payments is due to the fact that the law pays private schools their per pupil expenditure up to a maximum level each year ($5,326 in 2000-01), which is often much higher than the tuition they charge to their students. Under this “dual payer” system, private citizens pay one tuition rate and the state’s taxpayers pay another—one that is on average 40% higher. Forty percent of the voucher program’s total biennial cost of $127 million comes to just over $50 million. Even if the gap between private school tuition and expenditures were to be reduced by half in the current school year, the elimination of this funding provision would still yield approximately $25 million.
  28. A graphic representation of the Governor’s proposed funding for SAGE and the Milwaukee voucher program is as follows:
  29. SAGE
    Milwaukee

    Vouchers

    Base Funding (current program cost)
    $58.7 million
    $49.7 million
    Cost above Base to Continue Program
    $53.7 million
    $27.5 million
    Governor’s appropriation
    $22.1 million
    $27.5 million
    Cutback in Funding
    $31.6 million
    NONE
  30. For a detailed analysis of the capital funding formula and depreciation issue, see Nelson, Egen and Holmes, “Revenues, Expenditures and Taxpayer Subsidies In Milwaukee’s Voucher Schools,” p.p. 14-22. Paper Presented at the 2001 Annual Meeting of the American Education Finance Association, Cincinnati, Ohio, March 2001.
  31. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p.p. 549-50.
  32. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 549.
  33. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p.p. 551-552.
  34. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 552.
  35. 2001-03 Wisconsin State Budget Summary of Governor's Budget Recommendations, Legislative Fiscal Bureau, March, 2001, p. 550.
  36. Monthly Letter to Friends of The Center for Education Reform, Nos. 49 and 50, Center for Education Reform, December 1998-January 1999.
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