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Action Guide
November 7, 2000


Proposition 38 State-Funded School Vouchers for Private and Religious Education.

Description - Background - Important Points - Supporters/Opponents - Resources - Letter to Editor - Flyer


Proposition 38 would create a publicly funded program to provide parents with vouchers that could be redeemed for private school tuition. It would require the state to offer an annual scholarship (or voucher) to every school-age child in California. Vouchers are grants of aid to parents on behalf of their children. Voucher checks would be made out to parents, but sent to private schools selected by the parents for the parents' endorsement. These checks could only be used to pay tuition and other educational fees at schools that have chosen to become "scholarship-redeeming," or voucher- receiving, schools. The vouchers would not be considered income for state income tax purposes.

In order to redeem vouchers, a private school could not "advocate unlawful behavior" or discriminate on the basis of race, ethnicity, color, or national origin. The proposition would not prohibit a private school from restricting admission on other bases, including gender, religion, language, ability, disability or ability to pay.

Each year the voucher amount would be the greatest of:

Starting with the first year the proposition would be in effect (the 2001-02 school year), all pupils who were previously in public schools and all children entering kindergarten would be eligible for vouchers. For students who were previously in private schools, the proposition would phase in eligibility over a four-year period.

If the voucher amount exceeds the tuition and fees at a private school, the state would put the difference into an account to be held in trust for the pupil's future tuition and fee expenses at any voucher-redeeming school or any college or university. A student would be eligible to use the trust account until he or she completes an undergraduate degree or becomes 21 years old (if not enrolled in a voucher-redeeming school at that time).

Proposition 38 would affect the regulation of private schools in two main ways. First, all state laws affecting private schools as of January 1, 1999, and all local laws that would be in effect as of the November 2000 election, would remain applicable. Second, significant new restrictions on the ability of government to adopt new laws and regulations affecting private schools would be imposed. Any new state laws would require a three-fourths vote of the Legislature. Local governments would need approval by a two-thirds vote of the local governing body and a majority of voters in the affected area in order to impose new health, safety, or land use regulations on private schools.

Proposition 38 would require voucher-redeeming schools to administer to their voucher students the same standardized tests required of public schools for measuring academic achievement relative to pupils nationally. Composite test results for voucher students in each grade would be released to the public.

This measure would require the calculation of per-pupil funding for public schools to include all funds used to finance local and state education programs for grades K-12. This definition includes expenditures that traditional measures exclude, such as for capital outlay and debt service. The state Department of Finance would be required to collect the necessary data to calculate a national average per-pupil funding based on a statewide per-pupil average calculated for each state..

Under current law, the spending guarantee created by Proposition 98 of 1988 establishes a minimum funding level for public education, including K-12 schools, community colleges, child development programs, and state special schools for the blind and deaf. Under Proposition 38, once California's per-pupil public school spending equals or exceeds the national average, public schools would from then on be guaranteed a minimum level of funding equal to enrollment times the national average per-pupil spending. This new National Average School Funding Guarantee (NASFG) would replace the Proposition 98 guarantee.

Unlike Proposition 98, the NASFG would not require school funding to keep pace with inflation. Proposition 38 would also repeal a "hold harmless" provision found in current law that requires enrollment to decline for three consecutive years before the public school funding guarantee is reduced to reflect the lower enrollment. Once the NASFG goes into effect, it would allow an immediate reduction in public school funding if enrollment were to decline and thus could result in a lower level of per-pupil spending than would be required under Proposition 98.

Also unlike Proposition 98, the NASFG would not guarantee funding for community colleges, child care and development, and the state special schools. Once the NASFG becomes operative, funding for these programs would compete with health, public safety, higher education, etc., for state General Fund dollars.

The fiscal impact of Proposition 38 would be a combination of several factors: the cost of providing vouchers for students who would have attended private schools anyway, the cost of providing vouchers for students who transfer from public to private schools, and the savings for public schools as students transfer from public to private schools.

Once the measure is fully phased in, providing vouchers for existing private school students would cost an estimated $3.3 billion. The Legislative Analyst's Office estimates net savings per transferring students based on a $7,000 per-pupil cost in public schools vs. a $4,000 voucher cost, resulting in an overall net long-term effect of the measure ranging from $2 billion in annual costs if 5% of students transfer to $3.4 billion in savings if 25% transfer.

The California Budget Project (CBP) reports a more complex analysis that recognizes that because of fixed costs, "public schools will not be able to reduce their total costs proportionately to reductions in enrollment without significantly increasing class sizes or otherwise reducing spending on day-to-day pupil education." The CBP examined a range of scenarios and found that under all those scenarios, Proposition 38 would increase state costs. With their best estimate for public school savings and a 10% transfer rate, CBP estimates a $3.9 billion net additional cost in 2004-2005.


There are currently approximately six million pupils in kindergarten through 12th grade in California public schools. Approximately another 650,000 K-12 students attend private schools separate from the public school system.

In November of 1993, nearly 70 percent of the voters defeated Proposition 174, another initiative that would have established a school voucher system in California.

According to the California Budget Project,

"The use of public funds for private schools, particularly faith-based schools, raises a number of legal and constitutional issues that are beyond the scope of this analysis. The U.S. Supreme Court has not ruled on the constitutionality of school voucher programs. However, state and federal district courts have struck down programs in Vermont, Maine, Florida, and Ohio that allowed vouchers to be used at faith-based schools. The Wisconsin Supreme Court upheld, and the U.S. Supreme Court refused to hear an appeal of the Milwaukee voucher program. Recent Supreme Court decisions, such as the June 2000 decision allowing states to use public funds to provide computers for religious schools, make predictions about the Court's position difficult.

"A school voucher program of this scale is unprecedented. Voucher programs in other states have been narrowly targeted to students with economically disadvantaged backgrounds or who attend low-performing schools. The Milwaukee school voucher program, for example, limits eligibility to Milwaukee Public School (MPS) students whose family income does not exceed 175 percent of the federal poverty level. In 1998-99, eight years after the program began, approximately six percent of MPS students used vouchers to attend private schools.

"The school voucher programs in Cleveland, OH and Florida, both of which have been struck down by state and federal district courts, are also very focused programs. The Florida program makes vouchers available only to students who attend public schools that have failed to meet the state's performance standards for two consecutive years. The Cleveland program provides vouchers to students from families with incomes below 200 percent of the federal poverty line."


Signing the ballot argument for:
Signing the ballot argument against:

Carmela Garnica, Teacher
Escuela de la Raza Unida

Tim Draper

John McCain
United States Senator

Lavonne McBroom, President
California PTA

Lois Wellington, President
Congress of California Seniors

Wayne Johnson, President
California Teachers Association

The rebuttal to the supporters' arguments was signed by Mark Dolan, Chair, Howard Jarvis Taxpayers Association; Joseph J. Bartosch, Headmaster, Sacramento Preparatory Academy; and Craig Garbe, Headmaster, Cornerstone Christian Schools.

Other organizations and individuals opposing the measure include: American Association of Retired Persons (AARP); American Association of University Women; American Civil Liberties Union; California Association for the Education of Young Children; California Business Roundtable; California School Boards Association; California State Association of Counties; Governor Gray Davis; League of United Latin American Citizens-California (LULAC); League of Women Voters of California; National Urban League; Superintendent of Public Instruction Delaine Eastin; and former Governor Pete Wilson.


Mary Lynne Ishikawa, LWVC Social Policy Director, dishi8459@aol.com

Elizabeth Zemmels, LWVC Education Program Director, ezemmels@yolo.k12.ca.us

No On 38, 1510 J Street, Suite 110, Sacramento 95814, 916-442-4406, Fax 916-442-4512, info@NoVouchers2000.com, www.NoOnProp38.com

Budget Brief: Are Vouchers the Way to Improve California's Schools?, California Budget Project, 921 11th Street, Suite 502, Sacramento 95814, 916-444-0500, Fax 916-444-0172, www.cbp.org



Proposition 38 supporters have stated that Proposition 38 will help public schools by creating competition. What Proposition 38 does is to spend nearly $3 billion tax payer dollars on students currently enrolled in private schools without putting any additional money into neighborhood schools. True competition requires a level playing field. Proposition 38 does nothing to help level the field.

Proposition 38 creates a complicated new funding mechanism for public schools. At the same time, it allows private schools to discriminate against students for a variety of reasons including academic or physical ability or a parents ability to pay. True competition requires that all of the players are given an equal chance. If a child from a household that cannot afford to pay can be excluded from the game, there is no competition.

I believe that no public money should be used to fund any private school. Please join me in voting NO ON PROPOSITION 38. Let's ensure that all of the students in California have an equal chance to succeed.


I oppose Proposition 38. Voucher-redeeming schools will be able to employ individuals to teach that have no teaching credentials and in some cases they may not have a college diploma. I believe our students deserve better.

Voucher-redeeming schools will not be required to hold open meeting of their governing board or provide financial audits. I believe that taxpayers deserve better.

Parents are being told that every student will be eligible for a voucher, but voucher-redeeming schools will be able to reject children for a multitude of reasons including religious affiliation, physical or mental disabilities or parents' ability to pay. I believe that parents deserve better.

Please join me in voting NO ON PROPOSITION 38. Let's ensure that parents, taxpayers and most importantly students receive that education they deserve from our neighborhood schools.

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