Order Code IB98035
CRS Issue Brief for Congress
Received through the CRS Web
School Choice:
Current Legislation
Updated May 20, 2004
David P. Smole
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
Methods of Supporting School Choice
Intradistrict Public School Choice
Interdistrict Public School Choice
Charter Schools
Tax Subsidies
Subsidies to Private Schools
School Vouchers and Supplemental Educational Services
Current State and Local School Choice Programs Involving Private Schools
Current Federal Choice Programs
ESEA Programs
Coverdell Education Savings Accounts
DC School Choice Incentive Act
Major Types of Proposals to Expand Federal School Choice Support
Choice Options in Existing Programs
Demonstration or Targeted Choice Programs
Block Grants
Tax Subsidies
Why Is There Debate Over Federal Support of Expanded School Choice?
LEGISLATION
Proposals in the 108th Congress
Selected House and Senate Bills
Administration Proposal FY2005 Budget
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School Choice: Current Legislation
SUMMARY
Legislative proposals to provide parents
— authorization for distributions from
enhanced opportunities to select their chil-
Coverdell Education Savings Accounts
dren’s schools are varied and widely debated.
(ESAs) to be used for K-12 education ex-
Many school choice proposals have been
penses, including private school tuition;
made with the intent of improving the quality
and increasing the range of educational oppor-
— public school choice for students attending
tunities available to students. Some propo-
Title I-A schools that do not make adequate
nents of school choice suggest that the avail-
yearly progress (AYP) for 2 consecutive years;
ability of more school choices will both pro-
vide more students with access to better
— supplemental education services for stu-
schools and also induce public schools to
dents attending Title I-A schools that do not
improve through market competition. Some
make AYP for 3 consecutive years;
opponents express concerns about choice
programs, such as the potential for redirecting
— school choice for students who are victims
public education funding and possible varia-
of violent crimes or attend unsafe schools; and
tion in the quality and availability of schools
from which to choose.
— the Voluntary Public School Choice pro-
gram.
The 108th Congress authorized and ap-
propriated funds for a school voucher program
The 107th Congress also reauthorized the
for the District of Columbia as part of the
following ESEA programs that support public
FY2004 Consolidated Appropriations Act.
school choice:
This Congress also has seen bills introduced
that would expand school choice, through
— Innovative Programs;
means such as:
— Charter Schools Programs;
— authorizing school choice programs for
students with disabilities; and
— Magnet Schools Assistance programs; and
— authorizing federal tax credits for K-12
— Fund for the Improvement of Education.
education expenses, or for contributions to
organizations that provide students with schol-
In June 2002, the Supreme Court ruled
arships to attend private schools.
that the Constitution allows for public funding
of school vouchers used to support children’s
The 107th Congress expanded the federal
attendance at religiously affiliated schools, so
role in providing support for elementary and
long as their parents also have the opportunity
secondary (K-12) school choice through
of selecting from among options that include
changes in federal tax policy and through
public and private secular schools. This ruling
enactment of the No Child Left Behind Act
allayed previous concerns about the constitu-
(NCLBA), which amended and extended the
tionality of directing public funds to reli-
Elementary and Secondary Education Act
giously affiliated schools. Still, some state
(ESEA). Major new school choice initiatives
constitutions prohibit public funding of reli-
of the 107th Congress included:
giously affiliated schools.
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MOST RECENT DEVELOPMENTS
On February 25, 2004, the U.S. Supreme Court ruled in Locke v. Davey (540
U.S. ___ (2004)) that the State of Washington’s practice of denying students from using
Promise Scholarships to support study toward a postsecondary degree in theology is not in
violation of the Free Exercise clause of the First Amendment. The court held that “there are
some state actions permitted by the Establishment Clause but not required by the Free
Exercise Clause.” While some had anticipated that the court’s ruling might have broader
implications, particularly on whether publicly funded K-12 school voucher programs might
be required to include religiously affiliated schools among school choice options, the court’s
ruling was narrowly tailored to the issue of funding scholarships for the “religious training
of clergy.”
On January 23, 2004, the President signed P.L. 108-199 (H.R. 2673), the Consolidated
Appropriations Act, 2004, which authorizes and appropriates $14 million in funding for the
DC School Choice Incentive Act of 2003, an elementary and secondary (K-12) scholarship
program in the District of Columbia. According to the program, students who are residents
of the District of Columbia and whose family income does not exceed 185% of the poverty
line will be eligible to receive scholarships valued at up to $7,500 per year to support their
attendance at private elementary or secondary schools located in the District of Columbia.
On January 20, 2004, the U.S. Supreme Court heard arguments in Hibbs v. Winn, (No.
02-1809) involving the Arizona tuition tax credit program. The case is a challenge to a
ruling by the United States Court of Appeals for the Ninth Circuit that the Tax Injunction Act
and principles of comity do not require federal courts to dismiss constitutional challenges to
state tax credits that affect the administration of state tax systems. The Arizona tuition tax
credit program had been challenged in federal courts on grounds that it violates the
Establishment Clause of the First Amendment to the Constitution because it permits
scholarships to be awarded for attendance at parochial schools. The court’s ruling on this
case may determine the extent to which state tax laws (including those supportive of school
choice) may be challenged in federal courts.
BACKGROUND AND ANALYSIS
Introduction
According to the National Center for Education Statistics (NCES), during the 1990s,
the proportion of the nation’s school children attending schools of choice increased modestly,
with the increase due primarily to greater numbers of children attending chosen public
schools. Across all income levels, greater proportions of students attended public schools
of choice in 1999 than in 1993. However, among students attending schools of choice
(whether public or private), those from lower-income families were more likely to attend a
public school of choice, whereas those from higher-income families were more likely to
attend a private school. Despite modest growth in the exercise of school choice, three-
quarters of elementary and secondary school students still attended a public school to which
they were assigned. (U.S. Department of Education, National Center for Education Statistics,
Statistical Analysis Report, Trends in the Use of School Choice: 1993 to 1999, May 2003.)
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The federal government, and many states and localities have implemented numerous
policies and programs that have enhanced parents’ ability to select the schools their children
attend, contributing to the modest growth in the exercise of school choice observed over the
past decade. While many school choice policies and proposals have become popular and
broadly supported approaches toward increasing students’ access to diverse educational
opportunities and effecting elementary and secondary education reform, others remain
controversial and divisive.
This issue brief provides an overview of current local, state, and federal policies and
programs that support school choice and identifies and summarizes recent federal school
choice legislation. It is updated regularly to reflect congressional action on legislation
concerning school choice and related developments in states and localities.
Methods of Supporting School Choice
Students from families with sufficient resources and capabilities may be considered able
to choose from among the panoply of school options. For many students, however, the
extent to which they and their parents can exercise school choice depends upon the scope of
public policies and programs implemented at the federal, state, and local level. While
existing federal, state, and local programs that support school choice with public resources
have a variety of features, they generally fall into six broad categories.
Intradistrict Public School Choice. Students may choose among some or all the
public schools within their home school district. Open enrollment plans, magnet schools
(created to promote voluntary school desegregation), and alternative schools also are
examples of intradistrict choice options.
Interdistrict Public School Choice. Students may choose to attend public schools
outside their home school district. Included in this type are special school districts, such as
secondary education districts providing vocational or technical education and training, and
some magnet schools.
Charter Schools. Students may choose to attend public schools operating under
charters granting them greater operational autonomy in exchange for increased accountability
for outcomes. A charter school may be a school within a local educational agency (LEA) or
may be considered its own independent LEA. Virtual charter schools function through the
exchange of information electronically between student and teacher, such as from a student’s
home via the Internet, and typically do not have a common education facility.
Tax Subsidies. The federal and some state tax codes provide deductions or credits
supportive of school choice. These include the exemption from taxation of income used for
elementary and secondary education expenses, such as through federal Coverdell ESAs and
certain state deductions or credits for educational expenses or contributions to school tuition
organizations (STOs), which provide private scholarships to children. The federal tax code
also allows deductions for interest paid on a home mortgage, as well as state and local taxes.
These deductions act to subsidize the cost of families exercising their choice to reside in
desired school districts or attendance areas, which often have higher property values and
higher amounts of deductible local property taxes or home mortgage interest payments.
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Subsidies to Private Schools. Private schools are able to provide educational
services at more attractive prices partially as a result of the provision of selected publicly
funded services to private school pupils (e.g., transportation, health, and special education
services), and the deductibility from taxation of certain contributions received by them or
their parent organizations.
School Vouchers and Supplemental Educational Services. Parents may be
granted vouchers that they may use to pay a portion of or the total cost of full-time
attendance at a private school. Vouchers are sometimes referred to as scholarships or tuition
certificates. Parents also may be granted the opportunity to select the provider of
supplemental educational or tutorial services for their children in much the same way as
under a voucher program.
There are also privately financed choice options. For example, private groups (such as
STOs) have established programs in many localities to help pay tuition and related costs for
mostly low-income children to attend private elementary and secondary schools. Also, many
families choose to homeschool their children.
Current State and Local School Choice Programs
Involving Private Schools

Of policies and programs currently operating or proposed in states or localities, most
involve only public schools — whether selected schools within an LEA or school district,
all schools in an LEA, all public schools in a multi-LEA region or state, or charter schools.
School choice programs in which vouchers are provided to a limited number of pupils for
attendance at private (including religiously affiliated) schools currently exist in Wisconsin
(Milwaukee), Ohio (Cleveland), Florida, and Colorado. In Maine and Vermont, public
funding has long been provided to allow children who reside in areas without public schools
to attend private schools.
The Milwaukee Parental Choice Program provides state funding for low-income
students to attend private schools located within Milwaukee. When first implemented in
school year 1990-1991, choice was limited to nonsectarian private schools. In the 1994-1995
school year, the program was expanded to include religiously affiliated schools. Students
in kindergarten through grade twelve are eligible to participate. During school year 2003-
2004, parents are eligible to receive vouchers set at the lesser of $5,882 or the private
school’s per-pupil costs (for tuition, operating expenses, debt service, etc.), which they then
submit to the school for payment. During the 2002-2003 school year, 11,621 students and
102 schools participated in the program. (State of Wisconsin, Department of Public
Instruction, School Management Services).
The Cleveland Scholarship and Tutoring Program, first implemented in the 1996-1997
school year, allows students in kindergarten through grade 3 to apply to receive scholarships
to enable them to attend a private school located within the boundaries of the Cleveland
Municipal School District or a public school in an adjacent district, or to receive tutoring
grants for tutorial services delivered by a private or governmental provider. Students from
low-income families are given priority in participating in the program. Once accepted,
students may continue to participate in the program through higher grades. Parents of
students attending private schools or receiving tutorial services are reimbursed by the state
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for an amount up to either 90% of the defined scholarship amount (for families with incomes
below 200% of the poverty line), or 75% (for families with incomes at or above 200% of the
poverty line), with the maximum K-8 scholarship amount set at $3,000 for the 2003-2004
school year. The program was recently expanded to include high schools, with the
scholarship amount for high schools set at $2,700. Participating private schools must agree
to charge students in families with incomes below 200% of the poverty line tuition of no
more than 10% of the scholarship amount, all of which may be satisfied by in-kind
contributions or services. Students in families with incomes at or above 200% of the poverty
line may be charged the difference between the scholarship payment and the school’s actual
tuition. (Title 33, Ohio Revised Code, §3313.97). During the 2002-2003 school year, 5,147
students received tuition scholarships, and 1,112 received tutoring grants
(SchoolChoiceInfo.org. “Cleveland Scholarship and Tutoring Program Student Enrollment,”
(based on data reported by the Ohio Department of Education at [http://www.
schoolchoiceinfo.org/facts/index.cfm?fpt_id=5&fl_id=2].) According to arguments in
Zelman v. Simmons-Harris (536 U.S. 639 (2002)) no adjacent public school districts have
elected to accept students under the program.
In addition to these two local voucher programs, in 1999, the state of Florida
implemented Opportunity Scholarship legislation, which authorizes the provision of
vouchers to pupils in grades K-12 assigned to low-performing public schools that receive an
‘F’ rating for any two years during a four-year period. The vouchers may be used to pay
either private school tuition or the costs of enrolling in another public school in the same or
a neighboring county. For school year 2003-2004, nine public schools have been designated
as failing schools. The amount of funding available for attendance at private schools is the
lesser of the amount of funds that would be available to the public schools for the child’s
education — generally between $3,600 and $4,300 — or the tuition and fees at the private
school. Participating schools must accept the scholarship as payment in full for tuition and
fees. School districts are required to provide transferring students with transportation to
public schools within the same district, but not to out-of-district public schools nor to private
schools. (Floridachild.org, “Opportunity Scholarships — The Basics for Families,” at
[http://floridachild.org/opportunityscholarships/basics.html]).
Florida also operates the John M. McKay Scholarships Program for Students with
Disabilities, distinct from the Opportunity Scholarship Program. Under this program, all
pupils with disabilities who attend Florida public schools may receive a voucher to attend
a public or private school of their family’s choice. The value of the voucher is based on the
amount of aid that would be available to the public schools for the child’s education and is
dependent on the nature of the pupil’s disability. Generally it ranges between $4,500 and
$21,000. (Alan Richard, “Florida Sees Surge in Use of Vouchers,” Education Week,
September 5, 2002). If the voucher amount is insufficient to cover the full cost of tuition and
the school does not accept the voucher as payment in full, families are permitted under the
program to make additional payments to the private school, although most families pay either
nothing or less than $1,000 above the voucher amount. During the 2002-2003 school year,
9,202 students participated in the program. (J.P. Greene and Greg Forster, Vouchers for
Special Education Students: An Evaluation of Florida’s McKay Scholarship Program
, (New
York: Center for Civic Innovation, No. 38, June 2003).
In April 2003, the Colorado Opportunity Contract Pilot Program, a state-wide school
voucher program was enacted. However, on December 3, 2003, the Denver District Court
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ruled that the program violated state constitutional provisions requiring local control of
education. The ruling is expected to be appealed. According to the authorizing statute,
school districts with at least eight schools that have earned “low” or “unsatisfactory” ratings
according to state standards must participate in the program, while other school districts may
participate voluntarily. Parents of students who are eligible for free or reduced-cost lunches
and who are identified as low-performing students according to academic assessments are
eligible to enter into an “opportunity contract” with their child’s school district to receive a
voucher for payment toward their child’s tuition at a private school. To be eligible students
also must have been continuously enrolled in a public school the year prior to participating
in the program, or be entering kindergarten. The value of the voucher is the lesser of the
educational cost per pupil at the private school or a specified percentage of the sending
school district’s per-pupil operating revenues, varying by grade level: 37.5% for
kindergartners, 75% for students in grades 1-8, and 85% for students in grades 9-12. After
allocating funds to voucher recipients, sending school districts are able to retain any
remaining per-pupil operating revenues (e.g., 63.5%, 25%, or 15%). In the first year of the
program, a maximum of 1% of a district’s students may participate in the program. Over
subsequent years, participation may gradually increase to 6%. (Title 22, Colorado Revised
Statutes, Article 56).
Some states support private school choice through tax policy. Arizona provides tax
credits to individuals for contributions to STOs that provide scholarships to students to meet
the costs of private school attendance. (As previously noted, the Arizona tuition tax credit
program is currently being challenged in federal courts.) Florida provides tax credits to
corporations that fund organizations providing scholarships to low-income children.
Pennsylvania also grants corporations tax credits for contributions to organizations that
award scholarships allowing children to attend the school of their choice. Additionally,
Illinois and Iowa allow individuals to claim a tax credit for certain educational expenses,
including private school tuition; and Minnesota allows tax credits and deductions for similar
expenses. (Krista Kafer, School Choice 2003: How States are Providing Greater
Opportunity in Education
, Washington, D.C., The Heritage Foundation, 2003. Also see
NSBA Voucher Strategy Center, National School Boards Association, Alexandria, VA,
2004.)
While Colorado was the first state to enact a school choice program since the Supreme
Court decided Zelman v. Simmons-Harris, legislatures in a number of other states are also
considering school choice legislation. In addition, several existing school choice programs
are being challenged in the courts. Some of these challenges involve state constitutional
prohibitions against the provision of state aid to support religious activities, such as
education. It is unlikely that these cases will be decided until the Supreme Court issues its
opinion on Davey v. Locke, an appeal of a lower court ruling which found a provision of the
Washington State constitution, which prohibited a state postsecondary education scholarship
from being used to support the study of theology, to be in violation of the free exercise clause
of the First Amendment. The Supreme Court’s ruling on Davey v. Locke may affect
elementary and secondary education school choice programs that involve religiously
affiliated schools. (For a more detailed review of legal issues relating to school choice,
particularly vouchers, see CRS Report RL30165, Education Vouchers: Constitutional Issues
and Cases
, by David M. Ackerman.)
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Current Federal Choice Programs
Currently, elementary and secondary education school choice is supported through
several ESEA programs and through the federal tax code. The following provides a brief
description of current federal school choice programs. Where appropriate, program
descriptions include FY2004 appropriation amounts.
ESEA Programs
Local Educational Agency Plans (ESEA Title I-A). Schools with 25% low-
income enrollment may be granted a waiver allowing participation in Title I-A if they are
involved in desegregation programs under which students change schools (the threshold
otherwise is generally 35% or higher). This provision was added to Title I-A in 1994.
School Choice as a Component of School Improvement (ESEA Title I-A).
Students attending Title I-A schools identified for school improvement after failing to meet
AYP standards for two consecutive years must be offered the opportunity to choose from
among two or more schools within the same LEA that have not been identified for school
improvement, corrective action, or restructuring, and that also have not been identified as
persistently dangerous schools. The lowest achieving children from low-income families
must receive priority in choosing schools. The U.S. Department of Education (ED) has
issued regulations prohibiting LEAs from using lack of capacity as a reason for denying
students the opportunity to transfer to a school of choice (34 CFR 200.44(d)). Schools
identified for improvement also are required to implement school improvement plans.
Students attending Title I-A schools that are identified for a second year of school
improvement after failing to meet AYP standards for a third consecutive year must continue
to be offered the option of attending another eligible public school within the same LEA.
Students from poor families who continue to attend a Title I-A school identified for a second
year of school improvement must be offered supplemental educational services (i.e., tutoring)
from a non-profit entity, a for-profit entity, or the LEA, unless such services are determined
by the state education agency (SEA) to be unavailable in the local area. The SEA is required
to maintain a list of approved supplementary education service providers (including those
offering services through distance learning) from which parents can select. In instances
where a school fails to meet AYP standards for four consecutive years, it must be identified
for corrective action. If, after a year of corrective action, the school still does not improve,
the LEA may begin planning to restructure the school, with one option being to reopen the
school as a charter school. In instances where there are no eligible schools in the student’s
LEA, LEAs are encouraged to enter into cooperative agreements with surrounding LEAs to
enable students to transfer to an eligible public school. LEAs may be required to expend an
amount equal to 20% of their Title I-A grants on transportation for public school choice and
supplemental educational services. (ED has calculated these amounts for FY2004 and posted
them at [http://www.ed.gov/about/overview/budget/titlei/fy03/index.html?src=rt].)
In instances where a Title I-A LEA fails to make AYP for two consecutive years, the
SEA is required to identify it for improvement, and require the LEA to develop and
implement a new LEA education plan, with technical assistance provided by the state. If an
LEA is identified for improvement, the SEA has the option of authorizing students attending
a school in that LEA to transfer to eligible public school in another LEA, with transportation
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costs provided by the sending LEA. If a Title I-A LEA does not meet AYP for four
consecutive years, the SEA is required to take corrective action, which may consist of
requiring the LEA to provide students the option of attending an eligible school in another
LEA.
Innovative Programs (ESEA Title V-A). As means of achieving education
reform, states may use Innovative Programs funds for the planning, design, and
implementation of charter schools. LEAs may use Innovative Programs funds for magnet
schools; for the planning, design, and implementation of charter schools; for school
improvement activities; to promote, implement, or expand public school choice; and for
supplemental educational services. (FY2004 appropriation: $296.5 million; FY2005 budget
request: $296.5 million.)
Public Charter Schools (ESEA Title V-B-1&2). The Charter Schools Programs
support increasing the number of charter schools by providing financial assistance for their
planning, design, and implementation. Forty-one states, the District of Columbia, and Puerto
Rico have charter school laws providing for the authorization of charter schools. In
exchange for exemption from significant state and/or local rules, charter schools are expected
to be held accountable for achievement of agreed-upon objectives. The Charter Schools
Programs require that all students in a community served by a charter school be given an
equal opportunity to attend.
Under Title V-B-1, the first $200 million appropriated for the Charter Schools Programs
is reserved for grants to states and eligible applicants for the planning, design, and
implementation of public charter schools and for the dissemination of information about
charter schools; for state revolving loan funds; and for national activities. The next $100
million appropriated for Title V-B-1 is reserved for per-pupil facilities aid programs, in
which competitive grants are awarded to states for purposes of establishing and
administering programs dedicated to funding charter school facilities, in whole or in part, on
a per-pupil basis. Fifty percent of funds appropriated in excess of $300 million are reserved
for each of the two uses. (FY2004 appropriation: $218.7 million; FY2005 budget request:
$218.7 million.)
Title V-B-2 authorizes funding through FY2003 for grants to public or private entities
(or a combination of the two) for the development of credit enhancement initiatives to assist
charter schools in acquiring, constructing, or renovating facilities. (A one-year extension of
the program is authorized under the General Education Provisions Act (GEPA) (20 U.S.C.
1226a)). (FY2004 appropriation: $37.3 million; FY2005 budget request: $100 million.)
For additional information on funding for charter school facilities, see CRS Report RL31128,
Funding for Public Charter School Facilities: Federal Policy Under the ESEA.
Voluntary Public School Choice Programs (ESEA Title V-B-3). These
programs support school choice by providing competitive grants for transportation services
in support of public school choice, and allow funds also to be used for tuition transfer
payments, school enhancement in schools receiving transfer students, and public education
campaigns. (FY2004 appropriation: $26.8 million; FY2005 budget request: $26.8 million.)
Magnet Schools Assistance (ESEA Title V-C). Magnet schools are schools with
special programmatic and other features, and are designed to encourage voluntary
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desegregation through the mechanism of parental choice. The Magnet Schools Assistance
program supports school choice by offering students the opportunity to attend a public school
with a special curriculum that attracts substantial numbers of students from differing racial
backgrounds. (FY2004 appropriation: $108.6 million; FY2005 budget request: $108.6
million).
Fund for the Improvement of Education (ESEA Title V-D-1). The Fund for the
Improvement of Education (FIE) provides the Secretary authority to support nationally
significant programs aimed at improving the quality of elementary and secondary education
at the state and local levels. Programs may be carried out directly by the Secretary, or
through grants or contracts. Specifically authorized uses of FIE funds include, among others,
the exploration of state and local public school choice programs. (FY2004 appropriation:
$280,452,851; FY2005 budget request: $45 million.)
School Choice Offered to Pupils Attending Unsafe Schools. Each state
receiving ESEA funding is required to allow pupils who attend chronically unsafe schools
and those who are victimized on the grounds of an elementary or secondary school to transfer
to a safe public school within the LEA.
Funding Allocations for Services to Students Attending Private Schools
ESEA. Funds provided under several programs are required to be used to provide certain
education services, on an equitable basis, to eligible pupils enrolled in private schools.
Coverdell Education Savings Accounts. Distributions from Coverdell ESAs
may be used for elementary and secondary education expenses at public, private, or
religiously affiliated elementary or secondary schools. Annual contributions to Coverdell
ESAs are limited to $2,000. For further information on this tax benefit, see CRS Report
RS20289, Education Savings Accounts for Elementary and Secondary Education.
DC School Choice Incentive Act. This is a federal grant program under which ED
funds the operation of a tuition scholarship program in the District of Columbia. Students
who are residents of the District of Columbia and whose family income does not exceed
185% of the poverty line are eligible to receive scholarships valued at up to $7,500 per year
to support their attendance at private elementary or secondary schools located in the District
of Columbia. Priority in the awarding of scholarships goes to students attending schools
identified for school improvement, corrective action, or restructuring under ESEA Title I-A.
The program is authorized for five years. (FY2004 appropriation: $14 million; FY2005
budget request: $14 million.) (For a more detailed discussion of the DC School Choice
Incentive Act of 2003, see CRS Report RL32019, Proposals to Establish a K-12 Scholarship
or Voucher Program in the District of Columbia: Policy Issues and Analysis
.)
Major Types of Proposals to Expand
Federal School Choice Support

The range of school choice proposals that the U.S. Congress might consider is broad
and can be clustered into at least four basic groups — choice options in existing programs,
demonstration or targeted choice programs, block grants, and tax subsidies. These are not
mutually exclusive. Each of these is briefly reviewed below.
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Choice Options in Existing Programs. Advocates of school choice may seek to
amend existing federal education programs in various ways, such as removing possible
program barriers to choice, adding school choice to authorized uses of funds, expanding
current choice provisions, or reconstituting programs to focus them on choice. They also
may consider appropriations language directing how program funds may be spent. The
primary examples of proposals in this category have involved ESEA Title I-A. As previously
noted, Title I-A contains certain choice-related provisions authorizing or requiring public
school choice and the provision of supplemental educational services for students attending
poorly performing Title I-A schools. Previously attempted choice amendments to Title I-A
also have endeavored to include private school enrollment among choice options.
Additionally, over time the ESEA has been amended to be supportive of public school choice
through the addition of the Innovative Programs, Public Charter Schools, Voluntary Public
School Choice, and Magnet Schools programs. Some have proposed amending the
Individuals with Disabilities Education Act (IDEA) to include a school choice component.
Demonstration or Targeted Choice Programs. Federal support for school
choice might be designed to demonstrate the impact of school choice in a discrete number
of locations (e.g., specific cities or a limited number of places around the country, such as
low-performing LEAs, or empowerment zones) or to target choice in a similarly limited
fashion to particular kinds of students or schools. The most frequent examples of this kind
of proposal have sought to expand choice options for special groups of students (e.g., low-
income students, victims of violence on school grounds) or those in certain types of schools
(e.g., schools characterized by poor levels of academic performance).
Block Grants. Block grants are federal grants to states that provide an exceptionally
high degree of flexibility in the ways in which aid may be used, perhaps coupled with more
specific requirements for accountability in terms of outcomes. They are frequently proposed
as the outcome for a consolidation of several existing federal education programs. Groups
of existing programs might be transformed into block grants in selected states under
“performance agreement” proposals (see CRS Report RL30835, Elementary and Secondary
Education: Accountability and Flexibility in Federal Aid Proposals
). Under a block grant,
school choice might be an explicitly authorized use, a required use (perhaps of some
specified portion of funding), or a precondition for participation (i.e., federal funds are
available only to those implementing choice plans). At times, choice programs have been
explicitly included among the authorized uses of funds under these block grant proposals or
the authorities are sufficiently open for choice to be supported without explicit mention.
Tax Subsidies. Advocates of federal support for school choice often turn to the IRC
in order to provide tax benefits — deductions, credits (refundable or non-refundable), or
exemptions from taxation of certain income — for all or certain categories of families paying
tuition or related costs for K-12 education. Coverdell ESAs are a current example of a tax
subsidy supportive of elementary and secondary education school choice (these accounts also
support postsecondary education expenses). Proposals also have been made to provide tax
subsidies for contributions to STOs, which in turn would award private scholarships to
enable children to attend schools of choice. Some see tax subsidies, especially tax credits,
as an option to school vouchers. (For further information on proposals to support school
choice through the federal tax code, see CRS Report RL31439, Federal Tax Benefits for
Families’ K-12 Education Expenses in the Context of School Choice
).
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Why Is There Debate Over Federal Support of
Expanded School Choice?

This section considers some of the issues that have framed the debate over school
choice. Over the past several Congresses, many school choice proposals have been
introduced and debated, often vigorously. Most failed to be enacted. The most divisive issue
regarding publicly funded school choice is the provision of direct support to aid pupils
attending private, often religiously affiliated, schools. Conclusive evidence about the impact
of private school choice remains elusive; however, proponents and opponents alike often cite
conflicting findings from studies of the Milwaukee and Cleveland voucher programs and
some privately financed voucher programs to support their views. There is currently
relatively little opposition to federal support of some choice options that include only public
schools, as under the ESEA Title V programs: Innovative Programs, Charter Schools
Programs, Voluntary Public School Choice Programs, and Magnet Schools Programs.
However, the reaction to the ESEA Title I-A school choice provisions requiring LEAs to
provide intradistrict public school choice (including transportation) to students assigned to
schools identified for school improvement and to offer supplemental education services to
students from low-income families assigned to schools identified for a second year of school
improvement has been mixed.
Those who support choice proposals that include private schools have argued that in
view of the apparent institutional rigidity and resistance to change in many public school
systems, the most effective way in which the federal government can help to improve
educational performance, especially for pupils in low-income families, is to increase such
pupils’ opportunities to select from a range of schools, including private and religiously
affiliated schools. Proponents frequently state that helping at least some pupils from low-
income families “escape” their current, often poor-performing public schools provides an
immediate benefit to those pupils, and helps to provide such pupils with a degree of
educational choice and opportunity that those from more affluent families already have.
Competition through choice, it is argued, also would stimulate major improvements in the
performance of many public school systems serving large numbers of poor children. Finally,
while recognizing the possibility that new forms of government regulation may accompany
public funding, some proponents of school choice programs argue that this threat can be
limited through statutory prohibitions, especially if the aid is provided indirectly (i.e.,
through pupils’ families). Supporters have likely been encouraged by the U.S. Supreme
Court’s ruling in Zelman v. Simmons-Harris.
Opponents of federal school choice proposals that include private schools tend to focus
on the limitations of the choice options being proposed, and the potentially negative effects
on public schools and their pupils, including diversion of attention and resources away from
the goal of public school system reform. Many of the current choice proposals generally
involve only a portion of the potentially eligible pupil population — e.g., they would be
available only in one or a few localities, or only for a selected number of pupils in low-
income families nationwide. In addition, they often are limited in the proportion of private
school tuition and fee costs that may be covered, and/or the maximum voucher or scholarship
per pupil. While these amounts may cover a substantial share of the costs of attending some
private — especially elementary — schools, they are typically sufficient to pay the full costs
of attending only the least expensive types of private schools. Further, some opponents argue
that substantial governmental regulation of private schools will inevitably accompany
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Federal school choice programs, even if Federal financial assistance is provided indirectly.
Finally, some opponents argue that the effects of competition on public school systems are
more likely to be negative than constructive, including a reduction in funds that are linked
to enrollment levels, abandonment of public schools by pupils whose families are most alert
to the choices available to them, and unequal constraints on public schools (e.g., the public
schools must continue to serve numerous and diverse hard-to-educate pupils who might be
rejected by private schools).
LEGISLATION
Proposals in the 108th Congress
In the 108th Congress, numerous bills have been introduced to increase federal support
of school choice at the elementary and secondary education level. Proposals include those
that would amend the Internal Revenue Code (IRC) of 1986 to support school choice through
the creation of new tax credits or the expansion of existing credits; those that would provide
federal funding of voucher or scholarship programs to be used to provide select students
(e.g., students with disabilities, or low-income students in the District of Columbia) with the
opportunity to attend public or private schools of choice; and those that would amend
existing school choice provisions under the ESEA.
Selected House and Senate Bills. A selection of bills introduced during the 108th
Congress explicitly supporting school choice and which saw significant committee or floor
action is provided below. A description of the President’s FY2004 Budget proposal to
increase school choice is also provided.
H.R. 2556 (Davis, et al.)
DC Choice Incentive Act of 2003. Authorizes the establishment of a program under
which the Secretary of Education would award grants to entities for the operation of
scholarship programs in the District of Columbia. Grantees would award scholarships of up
to $7,500 per academic year to students who are residents of the District of Columbia and
whose family income does not exceed 185% of the poverty level to enable them to attend
private elementary or secondary schools located in the District of Columbia. Authorizes the
appropriation of $15 million for FY2004 and such sums as necessary through FY2008.
Introduced June 23, 2003; referred to Committee on Government Reform. Ordered to be
reported (amended) by the Yeas and Nays (21-20), July 10, 2003.
H.Amdt. 90 to H.R. 1350 (DeMint)
Amends the IDEA to provide that in states with publicly funded school choice programs
for students with disabilities, federal funds may be used to supplement state funding for a
child’s attendance at a private school. Provides that authorization of a parent to exercise
private school choice under such a program fulfills the state’s obligation to provide a free
appropriate public education to the parent’s child while the child is enrolled in the private
school; and provides that acceptance by a private school of IDEA funding deems it to be
providing a free appropriate public education and to be in compliance with Section 504 of
the Rehabilitation Act of 1973. Introduced April 30, 2003; failed by recorded vote: 182-240.
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H.Amdt. 92 to H.R. 1350 (Musgrave)
Amends the IDEA to allow LEAs to meet their responsibilities with respect to the
education of students enrolled by their parents in private schools by offering the parents of
such students certificates valued at the lesser of the per-pupil amount of federal funds
available for such students, or the cost of special education and related services. Introduced
April 30, 2003; failed by recorded vote: 176-247.
H.Amdt. 368 to H.R. 2765 (Davis)
Authorizes a school voucher program in the District of Columbia. Students from
families with incomes not exceeding 185% of the poverty line would be eligible to receive
scholarships valued at up to $7,500 per year to support their attendance at private elementary
and secondary schools in the District of Columbia. Offered September 5, 2003; agreed to
by recorded vote: 209-208. H.R. 2765 agreed to by recorded vote: 210-206.
H.R. 2673 (Bonilla) (P.L. 108-199)
Consolidated Appropriations Act, 2004. Provides for a federal payment of $40 million
for school improvement, including $13 million to improve public school education, $13
million to expand quality charter schools, and $14 million for the DC School Choice
Incentive Act of 2003. The DC School Choice Incentive Act of 2003 authorizes the
establishment of a competitive grant program under which the Secretary of Education would
award grants to one or more entities for the operation of scholarship programs in the District
of Columbia. Students who are residents of the District of Columbia and whose family
income does not exceed 185% of the poverty level would be eligible to receive scholarships
valued at up to $7,500 per academic year to support their attendance at private elementary
or secondary schools located in the District of Columbia. Conference report H.Rept. 108-
401 agreed to in House by recorded vote: 242-176; and in the Senate by recorded vote: 65-
28.
S. 1583 (DeWine)
FY2004 District of Columbia Appropriations Act, Title II — DC Student Opportunity
Scholarship Act of 2003. Provides for a federal payment of $40 million for school
improvement, including $13 million to improve public school education, $13 million to
expand quality charter schools, $13 million for the DC Student Opportunity Scholarship Act,
and $1 million for administration. The DC Student Opportunity Scholarship Act authorizes
the establishment of a competitive grant program under which the Secretary of Education
would award grants to entities for the operation of scholarship programs in the District of
Columbia. Students who are residents of the District of Columbia and whose family income
does not exceed 185% of the poverty level would be eligible to receive scholarships valued
at up to $7,500 per academic year to support their attendance at private elementary or
secondary schools located in the District of Columbia. Introduced September 4, 2003;
Reported by Committee on Appropriations (S.Rept. 108-142); Placed on Senate Legislative
Calendar under General Orders.
Administration Proposal FY2005 Budget. In its FY2005 budget request, the
Administration requests increased funding for Credit Enhancements for Charter School
Facilities and continued funding for the following ESEA Title V programs: Charter Schools
Programs, Innovative Programs, Voluntary Public School Choice, Magnet Schools, and
Fund for the Improvement of Education; and the DC School Choice Incentive Act. The
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Administration also proposes the establishment of a new Choice Incentive Fund to promote
school choice in elementary and secondary education.
Choice Incentive Fund. The Choice Incentive Fund would provide competitive awards
to states, LEAs, and CBOs that expanded opportunities for parents of children who attend
low-performing schools to attend higher-performing public schools (to include charter
schools) or private schools. Priority would be given to applicants that would provide
expanded school choice opportunities to large numbers of students. The Administration is
requesting $50 million to fund the program.
FOR ADDITIONAL READING
CRS Reports
CRS Report RL32019, Proposals to Establish a K-12 Scholarship or Voucher Program in
the District of Columbia: Policy Issues and Analysis, by David P. Smole.
CRS Report RS20289, Education Savings Accounts for Elementary and Secondary
Education, by Bob Lyke and James B. Stedman.
CRS Report RL30165, Educational Vouchers: Constitutional Issues and Cases, by David
M. Ackerman.
CRS Report RS21254, Education Vouchers: An Overview of the Supreme Courts Decision
in Zelman v. Simmons-Harris, by Christopher Jennings.
CRS Report RL30835, Elementary and Secondary Education: Accountability and Flexibility
in Federal Aid Proposals, by Wayne Clifton Riddle.
CRS Report RL31439, Federal Tax Benefits for Families K-12 Education Expenses in the
Context of School Choice, by Linda Levine and David Smole.
CRS Report RL31489, Individuals with Disabilities Education Act: Possible Voucher
Issues, by Richard N. Apling, Nancy L. Jones, and David Smole.
CRS Report RS21273, The Law of Church and State: Public Aid to Sectarian Schools, by
David M. Ackerman.
CRS Report RL30805, School Choice: Legislative Activity by the 104th Through 106th
Congresses, by James B. Stedman.
CRS Report RL31329, Supplemental Educational Services for Children from Low-Income
Families, by David P. Smole.
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