The overpayment to Milwaukee’s private and religious voucher schools results from the financing formula included in the state voucher law. Under the legislation, the state pays each voucher school an amount for each voucher student that is either the school’s per-pupil expenditure or a state-computed figure approximating state aid per pupil, whichever is less. In 1998-99, the voucher maximum was $4,894; in 1999-2000, it was $5,106. The formula does not even consider the actual tuition charged by the private school, however. Although the average voucher overpayment is 40 percent above tuition, the actual overpayment in individual voucher schools can go much higher, depending upon the disparity between tuition and computed per-pupil costs, as long as the latter number does not exceed the stipulated maximum. For example, in the absence of the voucher program, a private school may charge $2,000 in tuition but rely on church subsidies, fundraising, and grants to pay for an additional $2,500 for a total per-pupil cost of $4,500. Under the voucher program, however, this extra $2,500 per student is paid for by Wisconsin taxpayers.
This state overpayment above tuition is unique to the Milwaukee program. In Ohio and Florida—the other states with publicly funded voucher programs—the state pays no more than tuition; in Ohio, it automatically pays less. Even Milwaukee’s private scholarship program—PAVE (Partners Advancing Values in Education)—pays less than tuition, even though in many cases their vouchers have gone to the very same students now in the state voucher program, at the same voucher schools.
In Cleveland, Ohio, home of the second-oldest voucher program, the law guarantees that the state pays less than the private school’s tuition. Students from families with household incomes of up to 200 percent of the poverty level are eligible for a voucher for 90 percent of tuition; for students at or above 200 percent of the poverty level, the state pays 75 percent. In neither case do state taxpayers pay more than an individual citizen would pay to send his or her child to a private school. Furthermore, the maximum voucher is capped at $2,250.
In Florida, the only statewide voucher program, the voucher’s cost is set at the public school district’s average pupil expenditure “or the amount of the private school’s tuition and fees, whichever is less.” In other words, the voucher may pay up to the cost of the school’s tuition and fees, provided it does not exceed the district average. If the district average exceeds tuition, the school cannot collect that extra money from the state. In neither Ohio nor Florida are taxpayers expected to make up the difference between what a private school chooses to charge for tuition and the amount it claims to spend to educate each student.
The privately funded voucher group in Milwaukee known as PAVE has provided scholarships to students at private schools since 1992 and utilizes the state’s MPCP’s guidelines to determine what students are eligible for their vouchers. However, unlike the state-funded MPCP vouchers, PAVE does not pay private schools’ higher per-pupil expenditures. Instead PAVE vouchers only pay for up to half of school tuition. PAVE's average elementary school half-tuition voucher is $825, and is capped at a maximum payment of $1,000; for high schools the PAVE average is $1,475, capped at $1,500. Parents are expected to pay the remaining balance of the tuition.
In short, Milwaukee private and religious schools are ordinarily willing to accept no more than tuition to educate students, and rely on churches and other sources to make up any difference between school tuition and expenses. This is true even when tuition is paid in part not by a parent but by a private organization. However, when admission at the very same schools, sometimes for the same students, is purchased by the public through Wisconsin’s taxpayer-funded vouchers, these private schools are paid at a much higher rate.