March 14, 2001

Since 1869 Vermont has had a unique parental choice system in education. If a town does not maintain a high school, (grades 7-12) or belong to a union school district, it may tuition its pupils to any public or independent school in or out of the state. Since 1990, towns which do not maintain grades 1-6 can tuition their pupils out to independent schools as well, under slightly different rules. There are about 90 towns in Vermont which make use of one or both of these provisions.

In recent years there has been an increased interest in expanding parental choice. Many parents wish to enroll their children in schools which have more academic rigor, offer specialized curricula, emphasize moral and religious values, or simply promise to better accommodate their children.

In 2000 the legislature passed Act 150. This very limited act offers parental choice among public high schools in a region, effective for the 2002-03 school year. No more than 5%, or 10, students may elect to leave a school (beginning in 2003). Sending districts are not required to pay receiving districts for choice pupils. The program sunsets in 2007. During House debate on what became Act 150 the House voted down (68-69) an amendment by Rep. Frank Mazur (R-So. Burlington) to create a committee to study the creation of charter schools. A charter school bill authored by Sen. Jeb Spaulding (D-Washington) passed the Senate in 1995, but died when the educational financing bill to which it was attached died in a conference committee.

In 2001 four parental choice bills have been introduced. Money Follows the Pupil: H. 104, introduced by Rep. Kevin Mullin (R-Rutland Town) and 24 others, would require that, under the Act 150 public high school choice program, a sending district shall pay to the receiving town the Act 60 block grant received per equalized pupil (approximately $5400).

Charter Schools: H. 174, (introduced by Rep. Frank Mazur (R-So. Burlington) and 23 cosponsors, would authorize the creation of up to 15 charter schools per year. Charter schools are autonomous public schools, created by school boards, educators, parents, community groups or private organizations. In return from being freed from typical state regulations, the charter school agrees to be held accountable for student performance, at the risk of having its chartering authority revoke its charter. There are now over 2,000 charter schools in operation in 36 states.

H. 174 creates only one chartering authority, the state board of education (strong charter school bills offer two or more chartering authorities, for example, the state board of education, a special chartering board, or a state college or university.) A charter school must comply with health, safety, civil rights, federal rules, financial accounting, community report, and pupil assessments. The school may preferentially accept siblings of pupils, but otherwise must use a lottery to fill its slots.

The local school district is required to pay tuition for a charter school pupil, and the charter school is not allowed to charge parents an additional tuition fee. The charter school may share conventional public school facilities, but is not eligible for construction funds from the state. The bill appropriates $500,000 for the commissioner of education to assist charter schools with start-up costs.

Tax Credit for Scholarships: H. 342, introduced by Rep. Michael Quaid (R-Williston) and 12 cosponsors, would allow taxpayers to take a refundable 50% income tax credit (in addition to a charitable donation deduction) for donating to a nonprofit education assistance organization which allocates 90% of its annual revenue for scholarship grants for pupils attending public, approved, or recognized schools in Vermont. The recipients of the donations would be organizations like Vermont SOS, which provides scholarships to pupils attending independent schools. Dual Enrollment: S. 195, introduced by the Senate Committee on Education, would allow a high school student to enroll in up to two courses (not offered at the high school) per year at a postsecondary institution. The credits earned would count toward both high school graduation and a postsecondary school degree. The commissioner of education is authorized to pay 1/12 of the state support grant per equalized pupil (around $450) as course tuition. The amount of $301,500 is appropriated from the general fund to the education fund to reimburse it for the tuition payments.

Analysis: U.S. Secretary of Education Rod Paige recently observed that "the idea of a public school monopoly is dead...The already dead monopoly is going to be open to competition whether it likes it or not." The three House bills described above make small steps toward expanding parental choice and stimulating provider competition. These are the two essential ingredients of an educational system built around customer satisfaction, rather than institutional preservation. Where monopoly public schools have had to face parental choice - via charter schools or tuition voucher plans - they act quickly to keep from losing their pupils and their financing. In Forest Park, Florida, for example, a chronically underperforming public school was faced with the threat of its pupils departing under the Florida voucher plan. This threat of empowered parents and real competition motivated the school's educators to work very hard to bring their pupils to acceptable achievement levels.

In Vermont, independent St. Johnsbury Academy has become the model of a competitive, entrepreneurial secondary school. The Academy has as a matter of principle refused designation by local school districts as their high school. Every pupil who attends the Academy does so because he or she (or their parents) choose to do so. The Academy offers a wide range of courses to attract a wide range of pupils, and has raised private funds from its alumni to build a large field house and arts center. It makes special efforts to retain pupils who might drop out or transfer, because every departure results in a tuition loss of $7775. The charter school bill in particular envisions the creation of numerous charter schools which, though public, would be expected to emulate the Academy's model of competing for students through outstanding facilities and a commitment to educational quality.