Analysis of Proposition 174

On November 2, 1993, Californians will decide whether to amend the California Constitution according to the provisions of the "Parental Choice in Education Initiative," Proposition 174. In this policy brief, Policy Analysis for California Education (PACE) has undertaken an analysis of the initiative's provisions to provide policymakers, parents, educators, and the general public with objective information. PACE is not taking a position on the initiative; instead, its analysis reviews significant components of the initiative and raises policy questions and issues for voters to consider. Additional informational materials related to this initiative and the general issue of school choice are available from PACE.

Proposition 174 proposes providing state-funded scholarships, approximately $2,600 per year, to every California resident school-age child for use at any scholarship-redeeming public or private school. The initiative allows unused scholarship funds to be held in trust and applied toward future educational costs, including higher education. PACE’s analysis highlights several concerns, including the administrative burden of maintaining individual scholarship accounts and potential constitutional challenges related to the separation of church and state. The initiative’s allowance of supplemental financial support from any source without state restriction raises questions about funding equity and accountability.

Additionally, the initiative seeks to minimize government regulation of scholarship-redeeming schools, requiring only that they comply with basic standards in place as of October 1, 1991. Private schools may accept scholarships but are permitted to establish their own admissions criteria, raising concerns about potential discrimination. PACE’s analysis points out that while the initiative empowers parents to choose schools for their children, it does not guarantee access to preferred schools or address disparities in school availability. The fiscal impact of the initiative is uncertain, with potential savings depending on how many public school students transfer to private schools and how state funding policies are adjusted.