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fayette, Louisiana; Montgomery and Mobile, Alabama; and St. Louis, Missouri.)

Whatever the segregating aspects of specific private schools, the available evidence does not support the argument that, in general, private schools segregate racially. The belief that private schools have always been and are elitist, segregating institutions is incorrect.

Private Schools in New York City

Private schools play a far more impor tant role in New York City than they do in most other American communities. The city has about 5% of all private schools in the United States and 7% of all private school students. (The city has 3% of all public and private elementary and secondary students.) In fact, the city has more private schools-almost 1,000-than public schools.

Unfortunately, there are no adequate data describing the family characteristics of New York City's private school pupils. Some data are available from federal programs-most notably the Elementary and Secondary Education Act's (ESEA) Title I (compensatory education). About 14% of the city's private school students are eligible for Title I assistance. Eligibility requirements include both residence in a low-income target area and a substantial reading deficiency. Private school students, tend not to have as severe reading disabilities as public school students, so the 14% figure substantially understates the proportion of private school students from low-income areas.

As we have noted, some information on the income of families sending their children to private schools became available for the first time in the U.S. Bureau of the Census's 1976 Survey of Income

and Education, in which the bureau asked the same sample population questions about income and private school attendance. A sufficient number of responses were received from New York City families to permit the Foundation for Child Development to estimate the family income of New York City's school-age children. However, the foundation was unable to identify the incomes of the families with children in private schools because the sample did not include enough respondents in this category.

In order to compare the incomes of New York City families using public and private schools, we must, therefore, look at a larger portion of the sample, the Northeast region. (It is reasonable to assume that the Northeast data reflect the situation in New York City; indeed, they present a relatively conservative picture because of the greater proportion of highincome families in the region.) As expected, the data in Table 3 show that private schools have a smaller proportion of lowincome families than the public schools and a slightly higher proportion of upper-income families. But what is notable is how similar are the income distributions of the families using the two types of schools. Public and private schools enroll children from families from the same economic spectrum.

As the critics of the tax credit approach suspected, there is some evidence that low-income families are priced out of private schools, but once the income threshold that permits families to pay for private school education is passed, there is a relatively even use of these schools across all income groups, with a slight increase for the highest-income groups. Tax credits would have eliminated the "priced

out" threshold, however, and let lowerincome families use private schools almost as readily as lower-middle and middle-income families.

Socioeconomic Characteristics

New York City continues to offer a greater variety of private schools than any other large city in the country. We will look at the socioeconomic characteristics of the families of children in the four largest groups of private schools.

Catholic schools. Catholic schools account for one-third of the city's private schools and two-thirds of its private school enrollment. They report rapidly increasing minority enrollment, which should not be surprising for two reasons: (1) most Catholic schools-and virtually all Catholic elementary schools-are neighborhood schools and are influenced by the same population trends affecting the public schools; and (2) recent Hispanic immigrants are traditionally, if not actively, Catholic. Authorities for both the New York and Brooklyn dioceses report that their enrollments are now over 50% "minority." The New York Archdiocese's minority student population rose from 41% in 1975-76 to 60% in 1977-78.

Catholic schools are heavily concentrated in the inner-city areas of Manhattan, the Bronx, Brooklyn, and Queens. The system identified 47 elementary schools as "inner-city" in Manhattan in 1977. Of the 18,421 students in these schools, 78% were from minority groups. The system identified an additional 30 inner-city schools in the Bronx, for a total of 77 in the inner-city areas of these two boroughs. In 64 of these schools, more than half of the students were from families with incomes below poverty level. In slightly less

TABLE 3: ELEMENTARY AND SECONDARY ENROLLMENT IN NORTHEAST REGION PRIVATE AND PUBLIC SCHOOLS BY FAMILY INCOME, 1975 (numbers in thousands)

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than half of its inner-city elementary schools (36), the New York Archdiocese reported that more than 85% of the stu dents came from families with below poverty-level incomes.15

Hebrew day schools. The city's second largest group of private schools are the Hebrew day schools (including Solomon Schecter, Torah Umesorah, and yeshivas). These schools enrolled 39,459 students in 1977-78.16 Although reliable data are not available, school officials estimate that more than half their students come from low-income families. While these schools have virtually no black or Hispanic children, a high proportion of their students are immigrants or the children of recent immigrants. (In recent years, virtually all the Russian Jewish immigrants settling in New York City, estimated at over 10,000 and most with low incomes, reportedly have enrolled their children in Hebrew day schools.)

Only the most formalistic integrationist would argue that the integration of black and Hispanic children with these Eastern European and Middle Eastern minorities is a reasonable solution to the problems of racial integration in the city schools. The integration projected under the Constitution and the civil rights laws involves the minorities with the majority or dominant population.

Other denominational schools. Most of the city's other denominational schools are not neighborhood schools, even when they are attached to a parish. Typically, they are selective in their admissions and draw their students from a wide area of the city. These schools appear to enroll students from families with slightly lower than median incomes and to enroll slight ly higher percentages of minority students than do the city's private independent schools. But neither set of schools has compiled and reported reliable family income data, so conclusions are tentative at best.

It is not necessary to enter a detailed argument about the segregative or integrative impact of the denominational schools enrolling large percentages of minorities or immigrants. Clearly, these schools cannot be characterized as racial havens when they enroll minorities. Further, those with high percentages of recent immigrants, such as many Catholic and Hebrew day schools, help stabilize

the ethnic communities where they are located and deter families from leaving for the suburbs.

The more interesting questions concern the integrative impact on middle and upper. middle income neighborhoods of the denominational schools, especially the higher-tuition denominational schools, and the selective independent private schools. These schools do tend to enroll a lower proportion of minorities than the public system as a whole and often a lower proportion than are present in the schools' neighborhoods. Consequently, the independent schools often strike casual observers as encouraging the segregation of the city's school population. But it is misleading to compare the record of the independent schools with that of a neighborhood public or private school serving a population with a substantially different socioeconomic composition.

Independent schools. The independent schools should be evaluated against the norm for their principal clients-upperincome families. Are wealthier children in independent schools more racially isolated than wealthier children in public schools? Have the schools taken steps to minimize the racial and economic isolation of their students, and how do their efforts compare with the efforts of pub. lic schools serving comparable families?

New York City's independent schools enroll only about 9% of the city's private school students. But these schools are perhaps the most important to our argument because they enroll the students from families with the highest incomes, and they pride themselves on their selectivity (which some critics often perceive as exclusivity). True to their label, New York City's independent schools are not a tightly organized group; they do not collect information for the group as a whole about scholarship aid, minority enrollments, and the like. Many of the independent schools, however, belong to the National Association of Independent Schools, whose recent survey found its members nationally had an average minority group enrollment of 7%. 17 In 1978, the 44 member schools in New York City (with 56% of the city's private school students) had a minority enrollment twice the national average -13.9% (the figure is 25% or more in several of the schools)-and they devote a greater proportion of their school budgets

to scholarship aid. Virtually all private schools in the city ensure that their enrollments include students from low-income and minority families.

The alternatives to these private schools are the public schools serving the highest median income districts in the New York metropolitan area. As we have already seen, only 11% of all minorities in the New York area live outside the city, and these are concentrated in a few Westchester communities like Mount Vernon, White Plains, Greenburg District No. 8, and some Long Island and New Jersey towns. Students from upper- and middle-income families who turn from the city's private schools to suburban public schools will be unlikely to attend schools with more than 2% minority enrollments, if that much, and with only a handful of students from lower-income families.

Fears of supporters of public schools that New York City private schools are havens for the wealthy trying to avoid racial and economic integration has not been supported by the statistics describing the socioeconomic characteristics of the private school population in the city. We have enough information from available sources to know that these schools are not elitist, selective institutions. We have seen that private schools contribute to integration in the city, but that the tax system makes it less likely that middleand upper-income parents will remain in the city and select these schools.

Now we turn to the arguments concerning the direct and indirect fiscal impacts of private schools on the city and on its public schools.

The Fiscal Impact of Private Schools on New York City

The reasoning of the Council of Great City Schools, the supposed defender of the interests of large cities, is worth considering in greater detail. Basically, the council's opposition to tax credits rested on several assumptions that go to the heart of New York City's interest in federal tax reform.

Declining Enrollment

First, the council assumed declining enrollment damages a city's interests. For school administrators, it may cause such problems as underused buildings, oversized staffs that refuse to shrink without

a struggle, teacher layoffs, rising teacher costs as younger, lower-salaried teachers are laid off, and a potential loss of state aid based on enrollment. But these are basically problems of management, and not necessarily serious threats to the viability of public school systems in large cities. In essence, declining enrollment means the same resources are available to serve fewer children. According to the National Institute of Education, declining enrollments are forcing schools to become much more flexible and are bringing about "innovative experimentation that [past] federal initiatives (and funds) failed to produce."18

Second, the council assumed that private schools would significantly accelerate the decline of public school enrollment. The fact is that by taking students from private schools, the great cities have slowed the decline of public school enrollments caused by falling birth rates and the outmigration of families. The per centage of students enrolled in private schools nationwide has dropped from its peak of 13.6% in 1960 to below 10% today. Catholic schools alone have lost 2.1 million, or 39%, of their students since 1965, while public schools have lost only

3.8% since their peak year in 1970-71.

The public schools have not lost students to the private schools. On the contrary, they have gained students from their private school neighbors. Is the council proposing that public policy should facilitate the decline of private school enrollments for the sake of ameliorating declines in urban public schools? A comparison of changes in New York City private and public school enrollments (Table 4) shows that the private schools have suffered a greater decline than the public schools-22% compared with 9% between 1970-71 and 1977-78. Year-by-year data indicate that the decline, which began earlier in the private schools in the late 1960s, did not manifest itself in the public schools until 1972. For a period of at least five years, the public schools' enrollment grew while the private schools' decline. 19

Transfers from Private Schools

New York and other large cities should also recognize that a transfer student from a private school in the city does not provide the same benefits as a new resi dent. The family of the transfer student does not pay additional tax revenue; as a result, the pressure on a city's tax base

increases. Although cities do obtain some increase in state aid, it is less than it might appear. They receive virtually no increase in federal aid. Almost all the great cities are in heavily populated states. These states provide less than 50% of the statewide costs of education and typically provide an even lower percentage of the education costs in their largest cities.

Thus, transfers of students from local private schools place greater demands on the local tax base than they do on the state. Even if this were not the case, even if the state provided 60% or more of the total cost of education, the great cities would still have to increase their demands on their own tax resources to accommodate the additional students. Furthermore, the assumption that state aid will increase with enrollment must be modified in another important respect. Only a portion of state aid is dependent on average daily attendance; the rest comes as grants or is based on some portion of the schoolage population. New York City officials estimate that almost $300 million of the $800 million the city receives from the state is independent of enrollment in the city's public schools. Ironically, per pu

TABLE 4: ELEMENTARY AND SECONDARY ENROLLMENT IN NEW YORK CITY PRIVATE AND PUBLIC SCHOOLS, 1970-71-1977-78

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pil state aid for use within public schools would be higher if the city had fewer transfers from private schools.

New York City's public school enrollment peaked in 1971-72 at 1,140,349. Enrollment in 1978-79 was 998,969, a loss of 141,380 students (12.4%). New York State has a "hold-harmless" provision in its state aid formula, by which a district will not receive less aid because of a loss in enrollment than it did in the previous year. Thus, the decline in enrollment does not lower the amount of state aid the city receives. Almost half of all the students in private schools in New York City would have to transfer into public schools before the system would receive any additional state money-assuming the city did not suffer any further declines in its base population.

In summary, because of the hold-harmless provision, the fewer the students, the more funds per remaining student. Transfer students from the private schools reduce the level of available aid per pupil. In the past, New York City increased its public school budget in response to the pressures of inflation, a maturing staff earning higher salaries, increased employee benefits, and increased enrollment. Today, under the pressure of its budget troubles, the city has essentially frozen the school system's budget (while providing higher per pupil supports). The portion of the school system's budget provided by the city will not increase with transfers from the private schools. The council's arguments do not apply to New York City. More than that, the assumption that urban public schools suffer from measures that stabilize or enhance the enrollments of private schools is inapplicable in New York City.

Finally, New York City currently covers 62% of the total cost of educating its students from its own tax revenues ($1.73 billion from city sources, $800 million from the state, and $270 million from the federal government in 1978-79). Virtually none of the federal income would change with increased enrollments caused by transfers from local private schools. Federal funds are based principally on the total school-age population; private school pupils already earn federal funds for the public schools. Thus, transfers from private schools increase the drain on the resources of the public schools without

appreciably increasing revenues.

Reduced Federal and Local Support for Public Schools

Irrespective of the details of state, federal, and local funding, the council made an argument that requires closer attention: Will aid to private schools reduce support for public schools?

The long-standing argument in Washington over whether private schools should be included in any federal aid has repeatedly tied up passage of any comprehensive education aid program, thereby delaying and limiting the amount of federal money available to public schools. Given this background, it is unlikely that aid proposals at the federal level that exclude private schools will receive more congressional support than they have in the past. Excluding private schools from aid has limited, not increased, federal aid to education.

The council assumes that a dollar for private schools is a dollar siphoned off from the amount available for public schools. But the introduction of tax deductions for all education expenses changes the rules of the game. No critic has suggested that Congress cut any of its existing aid programs for public education in order to fund tax credits. Tax credits do not require any budget allocation, only a budget adjustment.

The council also feared a loss of support at the local level. Here it seriously miscalculated the impact of private schools on central cities, particularly, on New York City. Private schools are businesses and the city receives income from taxes on the economic activity these schools generate and from increased tax revenues from the families who remain in the city, or who move back, to make use of the private schools.

City Revenues from Private Schools

In 1978-79, private schools enrolled 304,346 New York City students, compared with 970,000 in the public system. These private schools constitute a sizable economic enterprise within New York City. In the Catholic system, actual school expenditures (which far exceed tuitions) for operating costs, exclusive of capital costs or depreciation, average $750 to $1,000 per pupil in the elementary schools and $2,000 in the high schools.

Costs in other denominational schools are generally higher-about $1,000 per student in unaffiliated inner-city private schools, $2,000 in the Hebrew day schools, and over $3,000 in unaffiliated schools outside the inner city. We can roughly estimate expenditures of about $220 million by the Catholic schools, $100 million by the other denominational schools, and $100 million by the independent schools for a total of $420 million, and the amount may be as high as $500 million. Most of the total is spent on salaries, maintenance, and utilities, generating revenue for the city.

The city's tax income from all sources amounts to about 10% of total personal income in New York City. This figure is higher than the income tax rate because the city's tax income is generated from sales and other taxes as well and because of the multiplier effect, that is, money spent on salaries in the city is taxed as income, taxed when respent by families for goods and services, then taxed as income to businesses, and so on. It is reasonable to estimate that the city receives at least $40 million from the businessrelated activities of private schools.

A tax deductability of education expenses or a tax credit alone would bring the city substantial additional income. Say a tax credit of 50% of tuition up to $500 per pupil were enacted. The median tuition for Catholic elementary schools in the city is now about $300; for high schools, $700. Median tuitions for almost all other private schools are above $1,000. (We do not include in this estimate the significant number of scholarship students whose tuitions are under $1,000.) In its first year, the tax credit would cover about half the tuition costs of the Catholic schools and a smaller percentage of the higher tuitions of the other private schools. Its initial effect would be to bring about $90 million into New York City's economy.

With the tax credit, most Catholic schools, in the long run, would probably cover a greater proportion of school expenses through tuition. But it is not likely that, after tax credits have been taken, the schools would charge parents effective tuitions higher than before the legislation was passed. Thus, there is a limit on how high tuitions could rise. It is unlikely that a school charging $300 per year

could increase its tuition to $1,000 in order to take full advantage of the tax credit, since then parents would be paying $200 more than before the tax credit. In the near future, the city could expect tax credits to bring a total of $125 mil. lion annually into its economy and could collect between $10 million and $15 million of this credit through its own tax system.

By retaining families in the city, private schools increase the city's tax revenues. If we conservatively estimate that at least 30,000 of the more than 300,000 private school students belong to separate families with incomes of over $40,000 annually and that these families produce only $6,000 a year in city tax revenues, we find that they account for $180 million a year in city revenues.

The key to this analysis is that schools are extremely important factors in a fami ly's choice of where it lives. Private schools keep in the city many families who would otherwise leave-and they attract many others back from the suburbs (as suggested in recent articles in the local press). Note the enrollment trends cited by Community School Board No. 3 on Manhattan's Upper West Side in its application for federal school integration funds. In one of the most integrated neighborhoods in the country-integrated by income, race, language, household size, religion, and agethe school board stated that more than 50% of the white parents send their children to private elementary schools. As their children reach the middle elementary grades, these parents tend to transfer them to private schools or to move out of the city.

Private schools are not stealing students from the public schools. In fact, as noted earlier, private school enrollment overall has dropped more rapidly than public school enrollment. Rather, a greater proportion of whites who have stayed in the neighborhood are using private schools. Every middle-class New Yorker knows a young family that has moved to Montclair, Scarsdale, or Greenwich when its children reached school age. A disproportionate number of those who stay in the city are using private schools.

And, contrary to popular belief, this pattern of school use helps the city's public schools-in two rather direct and two more subtle ways. First, families

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able to enroll their children in private schools are more likely to remain in the city and contribute to its economy, while the private schools themselves generate tax dollars for the city's coffers. Consequently, city revenues increase and so resources for public education increase. Further, the proportion of the city's school-age children in private schools is 2.5 times the comparable nationwide ratio. Yet New York City spends more per public school pupil than any other major city-more, in fact, than most of the city's private schools. There is no evidence supporting the notion that the more people use private schools, the less willing they are to support public schools. Families willing to invest much of their income in education are willing generally to support education tax measures.

Second, the public schools are relieved of the burden of additional students at a time when education budgets are tight. This is especially important for the future since more students will not increase state per pupil funding because of the holdharmless provision noted earlier.

Third, in many parts of the city, families split their children between public and private schools. In Brooklyn in particular, Catholic elementary schools feed their students into public junior and senior high schools. To an extent, many private schools function as part of the public system of education in the city as students move back and forth between the two systems.

Fourth, the private schools often set standards against which public schools are measured. Particularly in the inner city, competition between private and public schools encourages the best from both. District 3, for example, openly competed with private schools on the West Side-obtaining federal funds to widen the variety of its curriculum offeringsin an attempt to attract new enrollment from white families. The new flexibility benefited all the children in the district. Competition is especially important as a device for improving a system as large as New York City's public system, because all recent political reforms of the public schools have not been able to improve school quality quickly enough to affect the children whose parents were pressing for the improvements-within the three to six years children spend at each level of

the city's public schools.

Educational Benefits from Private
Schools: The Inner City

The New York City Board of Education has an obligation to provide the best education possible for all children in the city, especially children from minority and low-income families. Inner-city parents generally know-and state achievement test results show-that private schools in the inner city, on average, graduate students with higher achievement levels than the public schools in the same neighborhoods. Inner-city private schools also post absentee rates averaging 5%, compared with the public system's 17% rate citywide and 35% rate in the inner city. Good schools do not just offer services; they must encourage children to want to learn. The absentee rates of the two types of schools are evidence of at least some success of private schools in the inner city.

This is not to say that there are no excellent public schools in the inner city. Whenever partisans discuss the relative merits of public and private schools, they tend to fall into two traps. One argument assumes that all private schools are better than all public schools. This is not the case, not even in the inner city, where private schools do better on average. The other argument holds that private schools' superior achievement is a simple matter of (1) higher socioeconomic status of their students (socioeconomic status being the major factor related to school achievement); (2) the selection or expulsion prac tices of the schools; or (3) the self-selection by the parents. None of these three assumptions is true, either.

First, the socioeconomic status of private and public school students in most inner-city neighborhoods is not appreciably different, and the minor differences are not sufficient to explain the difference in achievement found in graduates of the two types of schools. Both public and private schools are pulling students from the same low-income neighborhoods in the inner city.

Second, inner-city private schools have virtually no selection process. (Indeed, discovering the superior inner-city students, given a large preschool population with language difficulties and many families who do not speak English, would be very hard to do.) As far as expulsion is

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