School Voucher Drive Rises Again : Education: Underfinanced Prop. 174 was soundly defeated 18 months ago. But movement is gaining new hope from two rich backers helping to prepare initiative for ’96 state ballot.

Think of it as the equivalent of “killer bees” for public schools, a buzz marching ever closer and louder that education officials consider a potentially grave threat.

It was only 18 months ago that seven of 10 California voters rejected Proposition 174, an awkwardly written and underfinanced measure that would have tapped public school budgets to provide state-funded tuition vouchers to private school students.

But as decisive as it was, that loss neither put the voucher movement to rest nor calmed the fears of the state’s education Establishment that a more narrowly drafted proposition, backed by enough money to finance a credible campaign, could find broad support among parents and taxpayers.

Almost since the moment the polls closed, voucher backers have been working behind the scenes, aiming to place a new measure on the ballot by 1996. And this time, they are confident that the financial problems that plagued Proposition 174 have been solved.

Two wealthy businessmen--John T. Walton, a son of the founder of the Wal-Mart store chain whose fortune was estimated last year at more than $4 billion, and William E. Oberndorf, a Bay Area stock market investor and money manager--are splitting the cost of research, polling and other work to lay the foundation for a new initiative.

Some of their allies claim that Walton and Oberndorf are willing to spend $25 million on the campaign, although the head of a pro-voucher research group that the two men set up will not confirm that.

But the political and philosophical differences that split and weakened the voucher movement before Proposition 174 remain.

One group, made up mostly of libertarians, conservative Christians and representatives of religious schools, is pushing for a Proposition 174-like initiative that would provide universal subsidies for private schools. This group, which adheres to the ideas of free-market guru Milton Friedman, condemns public schools for their failures and supports the privatization of all education.

That idea would face legal obstacles and is so radical that many, even among voucher proponents, give it no chance of winning at the polls, no matter how much money might be raised to support it.

Another camp, led by academics John Coons and Steve Sugarman of UC Berkeley and Terry Moe of Stanford University, is pushing for a voucher tilted in favor of poor children, especially those living in Los Angeles, Oakland and other large cities.

“The simplest way to do that is to give low-income children bigger vouchers than everyone else or at least to start out with low-income children and phase others in,” said Moe, a political scientist at the Hoover Institution. “The kids in Palo Alto don’t need vouchers, they’re doing just fine. It’s the kids in Oakland that need help.”

That concept--that vouchers ought to, at least initially, be fashioned to address the stark educational inequities between poor children marooned in struggling urban schools and middle- and upper-class children in the suburbs--is catching on nationwide.

Voucher legislation is on the table in at least 15 states, including Florida, Illinois and Texas, according to the National Education Assn. teachers union, and most of those bills would set up pilot programs aimed at benefiting low-income students in poor urban neighborhoods.

Fearing that the widespread use of vouchers ultimately would destroy public schools, the NEA is mobilizing opposition to those efforts.

Two years ago, the union’s local affiliate, the California Teachers Assn., spent $12.4 million to help finance the defeat of Proposition 174, whose backers had managed to raise only $2.6 million.

This time, the union’s leadership has met with the San Diego-based American Education Reform Foundation, the group funded by Walton and Oberndorf, several times, and said that any new voucher initiative should require private schools to employ credentialed teachers and be held accountable for their performance, perhaps through a statewide academic test.

CTA President-elect Lois Tinson said the union’s governing council will consider whether to take a position on the voucher proposal in June. But, she said, “I doubt very seriously that CTA would remain neutral on any voucher that would reduce the already limited funding for public education.”

At the other end of the spectrum of views on vouchers is a San Francisco Bay Area group called Bay C.A.R.E., which stands for Californians Advocating Reform in Education. Many of the group’s directors were involved in the pro-174 effort and believe that, with millions of dollars to spend, they could persuade voters to pass a similar initiative.

Last month, the group brought together an ethnically, religiously and politically diverse group of speakers at the Regent Beverly Wilshire Hotel in Beverly Hills to reintroduce the voucher issue to the Southern California political landscape.

About 150 people gathered in a crystal-chandeliered, mirrored ballroom--most of them Orthodox Jews whose children attend religious schools--and enthusiastically applauded self-described leftists demanding community control of education and libertarians denouncing public schools as a government plot to usurp the rights of parents.

“There’s no question there is momentum,” said Rabbi Pinchas Lipner, who chairs the group, which spent more than $20,000 on a full-page newspaper advertisement to announce the gathering.

State education officials “had ought to be nervous” about vouchers, said Lipner, who founded and heads the largest Hebrew day school in Northern California. “They know there’re problems with public education, and they’re not doing anything about it. . . . In a sense, they’re leaving a void.”

Lipner said the group supports providing vouchers of $3,500--almost $1,000 more than envisioned in Proposition 174--for every child, regardless of the parents’ income. Although schools accepting the vouchers would have to comply with rules governing private institutions, the state would be virtually barred from imposing any new ones, such as requirements that teachers be credentialed.

The initiative would specifically “provide protection for private schools against the Legislature trying to do to them what they have done to government schools,” said flyers handed out by the group.

Lipner said Walton would spend $25 million to get such a measure passed.

But Gene Ruffin, president of the voucher foundation put together by Walton and Oberndorf, said his group has not committed itself to Bay C.A.R.E. Instead, he said, the group has discussed education reform with Californians who hold a wide spectrum of views.

The goal, he said, is to write an initiative that will gain popular support, withstand legal challenges and “provide California children with better and safer schools.”

“It seems to us that it must be fair . . . and can’t be seen as giving a windfall to the wealthy or being another entitlement to the poor at the expense of the middle-class, and it certainly can’t result in new taxes,” Ruffin said.

“If we can write something that does all those things, we think we have a real good chance of getting it passed,” he said. If not, he said, the group will not promote a voucher initiative.

But Moe and others who agree with him fear that Ruffin and Walton are leaning too far toward the free-market views of economist Friedman and tailoring their efforts to the results of opinion polls that show widespread opposition to a voucher measure designed to favor poor children.

Moe said that is the same mistake that was made before Proposition 174. Public opinion on vouchers is fluid, he said, and will respond to the views of opinion leaders, such as business owners, politicians, church leaders and other prominent community members.

“Proposition 174 lost because all the opinion leaders didn’t like it,” Moe said. Many of those leaders would back a measure giving poor children greater educational opportunities if it also imposed certain quality and fairness requirements on the private schools that would redeem the vouchers.

While those battles are being fought within the voucher movement, the prospect of a new initiative remains on the minds of the state’s top two education officials: Schools Supt. Delaine Eastin and Secretary of Education and Child Development Maureen DiMarco.

When Eastin decided recently to appoint task forces to examine how the state is teaching reading and math, a new push for vouchers loomed large in her thinking.

“We only have one chance left,” she said, acknowledging that if voters continue to believe that public education is stumbling, a private school voucher measure could pass.

Last time around, the voucher proposal showed surprising strength, given its puny war chest and the opposition of every major education group and most business leaders and politicians.

Stung by that showing, and concerned that a new initiative could succeed if the public perception of the state’s schools does not change, Gov. Pete Wilson commissioned a national education consulting group to write a comprehensive reform plan for the state.

That report is one of a dozen now being pushed by education groups in California. However, amid ongoing financial problems and historically low test scores, no central vision of reform has emerged to break a decade-long political gridlock on education policy. And some fear that time is running out.

“If we don’t address those issues,” DiMarco said, “public education is going to be out of business.”