Many Catholic schools that accept vouchers rely on that public funding to stay open, a new study finds.

Education Secretary Betsy DeVos has advocated expanding such programs.

Catholic schools' reliance on vouchers highlights the legal gray area in the separation of church and state.

Many Catholic parishes in Milwaukee that participate in student voucher programs rely almost entirely on those public funds to stay in operation, a new study from the National Bureau of Economic Research has found.

In a working paper published Monday, researchers from the NBER found that Catholic schools in the city that are enrolled in a voucher program on average get nearly $1 million annually from the taxpayer-funded program. Experts suggest the dependence could create massive conflicts of interest in the division between church and state across the US.

"The idea that public funding would provide an important, even dominant, source of support to congregations would have been unthinkable a few years ago," the authors wrote. "But this possibility has quickly become reality."

The rise of vouchers

School voucher programs have grown in popularity over the past several years, and they gained extra attention in recent months because of President Donald Trump's selection of Betsy DeVos, a vocal champion of vouchers, to be secretary of education.

Roughly 400,000 kids in 29 states receive school vouchers, according to the advocacy group EdChoice. The monetary amounts of those vouchers and the laws about which schools can take them vary by state — some programs have high scholarship caps and no restrictions on their use, while other programs are open to only kids with disabilities or those from low-income families.

In nearly all cases, the programs are designed to serve the same purpose: Parents who are dissatisfied with the public school in their area can use a voucher to pay tuition at a private or religious school with the hope of increasing their child's standard of learning.

Not much research exists, however, to confirm that's what actually happens. In certain programs — such as those in which only low-performing private schools accept vouchers — performance can actually go down.

A 'blurred, indistinct, and variable barrier'

In the US, roughly 80% of private schools have religious affiliations. Many of those are Catholic schools, which, in general, have experienced tremendous financial struggle for more than a decade. Since 2003, student enrollment in Catholic schools has fallen by more than 400,000 nationwide, and thousands of schools have been forced to merge or shut down.

Nevertheless, the most recent estimates suggest that 85% of schools accepting vouchers are religiously affiliated. (The total number of religious schools that accept vouchers is unknown.) NBER's new research suggests that if the Trump administration expands voucher programs, as both DeVos and Trump have said they intend to do, even more tax dollars could be funneled toward propping up Catholic schools — and by extension the parishes that run them.

Mark Dynarski, an education researcher who was not involved with the NBER study, says that dependence creates a dangerous conflict of interest for the church. "Now you would have the Catholic dioceses arguing on behalf of vouchers, because it's now become intrinsic to their business operations" regardless of whether they actually help students, he tells Business Insider. "And that just seems a little strange to me."

Whether the US Constitution allows public funds to subsidize Catholic schools is open to interpretation.

In 1971, the Supreme Court ruled in Lemon v. Kurtzman that the separation of church and state is not a wall, as Thomas Jefferson envisioned it, but rather a "blurred, indistinct, and variable barrier depending on all the circumstances of a particular relationship," as Warren Burger, the chief justice at the time, wrote in the decision.

The court thus created the three-pronged "Lemon test" to determine when a law or program violates the church-state separation. A policy is considered acceptable if it was created with a nonreligious purpose, does not advance or inhibit a given religion, and doesn't lead to an "excessive entanglement" of government with religion.

Skeptics of vouchers have argued that though the program wasn't specifically designed to help religious schools, the growing dependence of Catholic schools on taxpayer-funded vouchers may not pass the other two parts of the test. The latest study, however, offers a more complicated picture of vouchers' effects.

'It's sort of the worst possible story'

The authors of the NBER report — Daniel Hungerman of Notre Dame University, Kevin Rinz of the Census Bureau, and Jay Frymark of St. Joseph Parish in Grafton, Wisconsin — analyzed funding data among 71 Catholic parishes in Milwaukee from 1999 to 2013. Milwaukee's voucher program is one of the largest in the US, and so it made for a rich experiment in long-term trends.

The data includes each parish's church revenue and expenses, school voucher revenue, noneducational revenue and expenses, and money raised from offerings. "We can thus see how increased voucher revenue affects school finances and non-educational church finances," the authors wrote.

Pope Francis arriving to attend the opening of a meeting of Rome's diocese in Saint John Lateran basilica in Rome. Thomson Reuters The findings indicate that voucher programs, as expected, increased funding for a parish's schools. In fact, for the average church that runs a voucher-accepting school, public funding provides more revenue than any other source, Hungerman noted.

The report also found that income from vouchers prevented school closings and mergers — by and large, Catholic schools received enough public funding to offset falling revenue from offerings and other donations.

The added money gained from vouchers did not, however, lead parishes to raise staff salaries, finance mission support, or fund church maintenance. In fact, the researchers found that spending on noneducational activities, as well as revenue from donations, went down in parishes that began accepting vouchers. (The researchers say they could not determine why this occurred.)

The study notes that while vouchers are clearly propping up Catholic schools, it's hard to tell whether the revenue strengthens the Catholic Church overall. If "one characterizes religion by the prevalence of churches," then they do; but if strength is defined by how much activity is happening within churches, then vouchers may not have an effect on the larger institution.

Dynarski looks at the trend as a negative either way.

"It's sort of the worst possible story that private Catholic schools are basically becoming dependent on vouchers and that it's not even causing a greater degree of interest in that religion," he says. "It starts to sound more and more like a business transaction at that level."

Enormous implications

Hungerman acknowledges that the results in the study don't necessarily apply to every Catholic parish. For instance, he says the design of a given voucher program can influence how the vouchers affect a school's finances. "But it does mean that the implications of vouchers for churches could be enormous in communities everywhere," he tells Business Insider.

The study draws an unprecedented link between local education policy — in this case, voucher programs — and the role these policies can play in preserving religious institutions. For the researchers, the data illuminates "a potentially critical role for vouchers in determining the future of American religion."

Dynarski takes an even stronger stance.

"The reason to have a kid use a voucher," he says, "is not to keep the Church afloat."