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Monday, February 12, 2007

Vouchers: By the Numbers

By Greg Bell
Utah State Senator, District 22

The following figures are gleaned from Utah Pubic Education Funding: The Fiscal Impact of School Choice, January 2007 by Susan Aud, Ph.D.

Student Revenue Sources / Revenue Per Student - 2005

Revenue from LOCAL sources

$2,220

Revenue from State sources

$3,508

Revenue from Federal sources

$597

Total revenue

$6,325

Of this $6,325 per student, $3,651 varies with enrollment and $2,674 does not. The voucher program we just adopted for Utah creates vouchers of between $500 and $3,000. "As long as the average voucher amount [is] less than $3,652, every child using a voucher would cost the state less money than if he were in the school system." Aud p.15

With our new voucher system, "...the public schools do lose part of the money associated with the student, [but] they also lose the whole student, so on a per-student basis school choice actually leaves the public school system with a better, not worse, fiscal situation." Aud, p.15. [Emphasis added.]

This is the point that most voucher foes do not admit.

Dr. Aud calculates the benefits to the Utah school system as follows: Assuming an average voucher of $2,731 the savings per student would be about $920 in variable costs, for a total of about $9M. (Based on an assumed 9,662 students using vouchers). Moreover, the school district would also retain the $2,674 per student which doesn’t vary with enrollment.

Total Voucher Cost

(9,662 students X $2,731 avge. voucher)

Savings to State in Variable Costs ($3,651 per student)

Net Fiscal Savings to State

Fixed Revenue savings ($2,674 per student)

Total Savings - Fixed and Variable

$24,440,041

$35,277,524

$9,837,483

$25,837,322

$35,000,000+

Under the new voucher program, the Utah system of public education is expected to retain a net of $35M to enhance educational opportunities for Utah public students and teachers. Not only is there no loss to the system, there is a net gain of about $35M.

There are two other major benefits of our new voucher program. Every child who uses a voucher reduces by one the class size at the public school he or she won’t attend. Class sizes are one of the primary focuses of the education community. In light of the fact that 15,000 new students will enter our education system each year for the next 10 years, it certainly behooves us to divert students to private schools.

Secondly, in light of the 150,000 new students (that’s 150,000 new desks) we expect in the next ten years, we would have to build hundreds of schools to house them. Vouchers will stimulate private schools to take some of these students; thus private investment will build, own and operate school buildings, reducing the amount of public dollars iti would take to build new schools.



Reference: Dr. Susan Aud, Utah Pubic Education Funding: The Fiscal Impact of School Choice January 2007. Dr. Aud is a Senior Fellow at the Milton and Rose D. Friedman Foundation and teaches at Johns Hopkins University and George Mason University.

9 Comments:

Blogger Utah Taxpayer said...

Thanks for posting this.

In the past, the official legislative fiscal note has excluded local savings. The state fiscal analyst has typically focused on STATE revenues and expenditures, not local. We assume that is the case this year as well.

Voucher opponents argue that the fiscal impact would be $30 million to $50 million if all current private school students were immediately eligible. This is not correct. The worst case fiscal note would be as follows:

- all 16,000 current private school students would receive a voucher immediately

- the average voucher amount would be about $500 since, according to voucher opponents, parents of private school students earn more than $115,000 per year.

- no current public school students would switch (which means savings would be zero)

Therefore, the worst case fiscal note would be

16,000 x $500 = $8 million

However, thousands of students will switch and these students will yield savings to taxpayers. For example, if three thousand students switch with an average voucher of $3,000 and if the state spends $7,000 in FY08 per student (including all costs, not just the ones officially reported in the media), then the savings would be

3,000 x ($7,000 - $3,000) - $8 million = $4 million.

2/12/2007 12:56 PM  
Anonymous Anonymous said...

How could any be against this voucher system? It is such a logical, practical, well thought out plan that it boggles the mind that people are against it. Good work Senate!

2/12/2007 1:26 PM  
Anonymous Anonymous said...

Let's be perfectly clear on one thing. Voucher opponents aren't worried about the (non-existent) harm to public schools. They want to maintain the status quo where they control system.

2/12/2007 3:06 PM  
Anonymous Anonymous said...

Control the system? NCLB? UBSCT? "Creatures of the Legislature?" Unfunded mandates? Funded mandates? Annual pile of education bills? Site councils? Voters?

Pshaw.

2/12/2007 4:16 PM  
Blogger Dave said...

Sorry Anon, but I really think it is about control, at least for the teachers union.

If the Legislature proposed a bill that created vouchers but also took away every mandatory test for public schools, took away all of the state-level micromanaging, doubled per student spending, and left it all to the districts to decide how to spend that money, the teachers union would still oppose the bill.

Why? Becuase it includes the v-word. Perhaps it's for philosophical reasons, but I think it's got to be more than that. I have my philosophies, but I'm willing to compromise (for example, I advocated for HB 148, but it definitely has things in it that I don't philosophically agree with, like paying a public school for losing a student to a private school. That seems counter-intuitive, but it's a compromise).

I don't get that same feeling from the union that they'd ever be willing to compromise on vouchers. And so it makes me think that they fear losing control more than anything else.

2/13/2007 9:26 AM  
Anonymous Mike Haines said...

OR is the legislature afraid of "losing" control? They've controlled education policy for many years.

What if we wanted to give more money to Democratic candidates or have open primary elections?

2/13/2007 1:06 PM  
Anonymous Anonymous said...

It's amazing this finally passed! Thank you senators! It's obvious that this will save money, and I love the emphasis on lose the whole student above. That's the one fact missing from the education lobby's comments on the fiscal impact. Competition is great! Of course we're uncomfortable when we have to face a new competitor (be it in business, government or wherever) but it's what makes us stretch and reach for higher quality. This will be good for Utah.

2/13/2007 5:10 PM  
Anonymous dave n said...

So let's reduce the regulations on public education too while we're at it.

When will the "special" interests of all types lose control too?

How about some "reform" in that area?

2/13/2007 7:49 PM  
Anonymous Anonymous said...

So the argument is, since we are not willing to fund public education properly, let's give students incentives not to come at all?--an interesting way to support democracy!

2/20/2007 1:48 PM  

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