$50-Million ‘School Choice’ Pledge and Senate Bill on Education Draw Criticism

The Senate has passed a controversial bill that would give charities and private foundations a role in helping parents pay for their children’s elementary and secondary school expenses.

The bill, sponsored by Sens. Paul D. Coverdell, a Georgia Republican, and Robert G. Torricelli, a New Jersey Democrat, would allow parents to place as much as $2,000 a year in an “education savings account.” Interest earned on the money would not be taxed, and the money could be used for expenses — including tuition and tutoring — associated with any primary or secondary school, private or public. Money placed in the accounts would not be deductible.

The bill also would allow charities, private foundations, companies, labor unions, and others to place money into the accounts.

The proposed measure comes at a time when a growing number of critics of public schools are searching for new ways to give children better access to high-quality education. Some conservative foundations, including the Lynde and Harry Bradley Foundation in Milwaukee, have started programs to provide scholarships or ”vouchers’’ to poor public-school students so that they can attend private or parochial schools.

Last month, a foundation started by business leaders in San Antonio announced that it would give $50-million over the next 10 years to help poor children in an inner-city public-school district attend private or parochial schools. The Children’s Educational Opportunity Foundation said it would provide full scholarships for poor students who live within the Edgewood Independent School District.

The program, called the CEO Horizon scholarship program, would provide students who choose to attend private schools within the Edgewood district with up to $3,600 a year through eighth grade, and up to $4,000 a year through high school. Those who enroll in schools outside the district would receive slightly less. More than 90 per cent of the 14,000 students in the district would qualify for the program, the first attempt to provide tuition vouchers for an entire school district.

Fritz Steiger, a founder of the CEO Foundation and president of CEO America, a national umbrella group that supports local voucher programs, said it was unclear how many children would participate in the program next year. He said there are about 200 openings in private schools in the Edgewood district, and an additional 2,000 in other districts in San Antonio. Public-school officials predicted that the number of students participating would be fewer than 500.

Critics of such school-voucher programs, and of Senator Coverdell’s proposed legislation, share many of the same concerns. They say such efforts would siphon money away from public schools, as well as allow private schools to lure away the best students.

President Clinton has said he will veto the legislation, a similar version of which was passed by the House of Representatives last year.

Some members of the Senate had hoped to expand the role of charitable contributions in providing money to help kids attend the school of their choice, but their efforts failed. The Senate rejected a provision by Sen. Daniel R. Coats, an Indiana Republican, that would have expanded the tax breaks people could take for charitable contributions they made to scholarship programs for children from low-income families.

Mr. Coats wanted to allow donors to private foundations and non-profit primary and secondary schools that provide scholarships to poor kids to take 110 per cent of their contribution — rather than the current 100 per cent — as a deduction on their income taxes.

“Children, especially children from poor families, do not have the money to take advantage of tax-free savings accounts,” said Senator Coats. “My amendment would provide immediate hope to thousands of children trapped in failing schools.”

“This is not government assistance to churches or religious schools,” Mr. Coats said. “It is a tax incentive that directs and enhances the voluntary giving that is already recognized by the tax code.”

Senators defeated the Coats proposal by a vote of 54 to 46.