If You Want More Money Per Student, Support Vouchers

For someone to categorically allege that there will be less money per student in the Utah public schools if vouchers become legal is to reveal that that person has either not followed the details of the voucher debate very closely, or purposefully ignored them. The likelihood of this (less money for public schools) happening is very small, because it would only happen if more students currently in private schools opt to use vouchers than do those who are currently in public schools.

The State Legislature acted in very good faith last year to increase teacher salaries. We need to do it again. But we can't do it forever. Therefore, the next best hope for increasing teacher salaries and funds for school supplies is for everyone to support vouchers.


In conjunction with a report that the National Education Association now thinks it has a dog in the Utah education voucher fight, the Salt Lake Tribune reported this:

Lisa Johnson, a parent of three children and spokeswoman for anti-voucher group Utahns for Public Schools, said spending public money on private schools is the wrong thing to do when Utah has the nation's largest class sizes and spends less money per student than any other state.

"We've been told for many years that we'd like to do more for public schools, but it's too expensive," she said. "We think it's a little ironic that suddenly they found the $430 million to pay for private school subsidies."
Actually, it is precisely the reason to support vouchers. The $430 million Jones mentions are costs that accrue over 13 years. On that same yearly basis, the state legislature found just about the same amount last year to increase teacher salaries. So I'm not sure what Lisa Johnson is trying to contribute to the debate with incendiary rhetoric such as is quoted above.

Here's what Lisa is not telling you. The $430 million figure represents only one side of the balance sheet.

Lavar Webb stated the prognosis succinctly in the Deseret News (emphasis added):

Because I'm a public school advocate, I'm also an enormous voucher supporter. I am absolutely convinced that by every measure Utah's public schools, students, parents, teachers and taxpayers will be much better off if vouchers are approved by voters in November.

Here's why: Utah schools desperately need more funding. We need more money for teacher salaries, for class size reduction, for computers and supplies. We need to spend more money per pupil.
Here's a key to why Utah spends so much per student in public schools--because we have the fewest percentage of children attending private schools of any state in the nation. Webb says:

But another big reason we're short of public school money is we have relatively few children attending private schools. Utah has about 3 percent of school-age children in private schools compared to 10 to 12 percent in most states. The difference amounts to hundreds of millions of dollars.

If we can encourage another 7 to 10 percent of students to attend private schools, while leaving most of the money we would have spent on them in the public school system, that's an enormous financial windfall for public schools.

This is a concept that only those who don't want to can't understand.

State Sen. Howard Stephenson likes to say that a voucher really is just a way to get families to raise their hands and volunteer to educate their children for $2,000 (the estimated average voucher amount) instead of $7,500 (the amount we spend per pupil from all revenue sources), leaving $5,500 [per child] remaining to educate other children in the public education system. Not a bad deal.

Now to deal with the crux of Lisa Johnson's $430,000,000 argument. Webb says:

And the money adds up. The legislative fiscal analyst estimates that the voucher program could pay out $429 million over 13 years if all qualified voucher students use the program. But it would mean we would not have to spend $1.8 billion for those students in the public school system, a direct net savings of $1.37 billion. That is money that can go to improve salaries, reduce class sizes and improve public education.

There's that $430 million she so dutifully reported. But how did she miss the $1.8 billion less spending and $1.37 billion overall savings? I don't think she did. Public, you are being hornswoggled by Lisa Jones.

Similar to what I've said here before, Webb explains the benefits that will accrue to Utah over the next several years if we start implementing vouchers now.

Even if we had 10 or 12 percent of students attending private schools, public school enrollment would not be cut back. This would all happen over several years, so we're simply talking about slowing the growth in public school enrollment, reducing the number of new students we have to pay for. Our public schools will still be crowded. The vast majority of Utahns will always attend public schools. But with 10-12 percent of students in private schools, significantly more money will be left in the public school system.

There you have it. Both sides of the story and both sides of the equation. I'm not sure what Lisa Jones and her group Utahns for Public Education expect to achieve by not admitting this.

I think it would be a great thing if we could all debate the voucher issue after stating both sides of the story. Lisa Jones and Utahns for Public Education don't seem to want to.

They are afraid of something. They're afraid it's going to work.

Comments

  1. Mr. Webb is counting money that would never have been spent in the first place (with or without vouchers) as savings resulting from vouchers. For more information on voucher costs vs. potential savings to taxpayers you should check out the legislature's "Impartial Analysis" of the fiscal and legal effects of HB148.

    Here's the link:

    http://senatesite.com/Documents/2007/ImpartialAnalysis.pdf

    In short that $1.37 Billion would never have been spent on those students in the first place because the vast majority of them would never have been enrolled in public schools with or without vouchers. You are right that students who don't go to public schools allow for more per pupil funding for the students who do but when we subsidize students who wouldn't have been enrolled in public schools in the first place it represents new tax expenditures not savings. The only possible way taxpayers could get ahead due to vouchers is if a substantial number of public school students adopted vouchers and switched to public schools. That isn’t likely to happen...at least according to the legislative fiscal analyst.

    Under this plan taxpayers don’t save money and while vouchers could provide more funding to the public school system when students switch to private school that funding comes at a the huge cost of the new subsidies for kids who were never going to be in the system in the first place.

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  2. Dang. I really should proofread...

    The last sentence in the second paragraph of my last post should have read:

    The only possible way taxpayers could get ahead due to vouchers is if a substantial number of public school students adopted vouchers and switched to private schools. That isn’t likely to happen...at least according to the legislative fiscal analyst.

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  3. Here's some better math for Jeremy.

    Let's assume that all 17,000 private school students received vouchers right now. That is, no phase in. Since they're all rich -- according to voucher opponents -- they would be eligible for $500 each. Therefore the cost to educate these students over 13 years would be

    17,000 x $500 x 13 = $110 million.

    Of course, voucher opponents say private schools and are already full so we can't assume growth in private school enrollment either.

    Therefore, you can only attribute $110 million to existing private school students, not $1.37 billion. The rest is attributable to switchers.

    You really can't have it both ways, Jeremy. You can't say vouchers will have an astronomical impact and then say that no one will switch. These are mutually exclusive.

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  4. OK, so I forgot inflation, so the amount would be about 20% higher, but it's still a lot less than Jeremy's claim that the $1.37 billion would be for students that would have gone to private schools anyway.

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  5. Frank,

    Jeremy is correct...and...

    LaVarr is just doing his duty in writing his post as both a PCE operative and as a lobbyist that needs a happy GOP to protect his own interests.

    LaVarr, PCE, and the Utah Taxpayers Association are telling you to believe that the legislative fiscal analyst findings are bogus. It's a failed strategy and they know it, which is why all they can do is spout out their false statistics louder and louder in the hopes that people will start to believe them.

    The $1.37 billion is an irrelevant number. The impartial analysis proves that the program costs more than it saves. The impartial analysis factors in:

    (a) the costs of students over 13 years who never would have attended public schools (who without vouchers we never would be paying for)

    (b) the cost of the voucher for those students who are currently attending public schools and then switch to private schools (again, subsidies we wouldn't be paying for), and

    (c) the savings to the districts that would result from students switching.

    When you add all of this up, the costs are $429 million and even with the highest estimates of savings we're still in the hole hundreds of millions of dollars.

    These are the facts! The only way for LaVarr's reasoning to work is is if the number of switchers bests the fiscal analyst estimates by 8 to 10 TIMES the number! This is quite the logical leap.

    Read the impartial analysis for yourself (it will be in the voter information guide) and truly ask yourself just what numbers you can trust. You may still vote for vouchers because you believe in them but please don't vote for them because of a false impression that they will save money.

    Thanks...Craig.

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  6. Craig,

    You can't get to $429 million UNLESS you assume that significant numbers of students are switching, which means savings must be included.

    However, we spoke with the LFA personally and he admitted that his analysis includes ZERO savings even though he assumed that TENS OF THOUSANDS of students would eventually switch. Again, you can't get to $429 million any other way.

    That's the facts, jack.

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  7. UTA,

    You should read before you post.

    I didn't make the claim that vouchers will cost $1.37 billion. I chose to stick with the facts as the legislative analyst has laid them out in the Impartial Analysis. Vouchers will cost around half a billion dollars and "savings" from vouchers won't come anywhere near covering that cost. (Of course we're leaving out the millions that will be spent by Utah's taxpayers defending the dubious constitutionality of this law in court)

    The $1.37 billion number came from the post we're currently commenting on where Frank quoted Mr. Webb's propaganda piece in the 8/16 DMN. Neither side of this debate benefits when people are tossing out phony, unrealistic, and deceptive numbers like Webb did and like you have in your comment.

    Seriously UTA...why is it that when the topic turns to welfare for private schools you guys can't wait to blow taxpayer money? I just don't understand Utah's "conservatives". Vouchers in Utah are an expensive new entitlement that will only get more expensive as the years go by. It would be nice if the Utah Taxpayer Association were actually watching out for taxpayers when it comes to new spending programs instead tossing us under the bus.

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  8. UTA,

    Facts are facts - read the impartial analysis for yourself. The $429 million are the costs. The LFA has shown that the savings, even in their best case scenario, are FAR LESS than the costs. You are still netting out hundreds of millions in the hole. Tell me how that's good business strategy?

    Thanks...Craig.

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  9. Thanks for the comments. I'm now more confused than I was before, but that's okay--I'll get this worked out in my mind sooner or later.

    Jeremy,

    I read the Impartial Analysis, and it may be that I have been making an invalid assumption this whole time, which is based on this statement from the Impartial Analysis:

    "Currently, each school district receives state funds under a formula that is based on the number of students enrolled in the school district. If a student transfers from a public school to a private school, the school district would, under present law, no longer receive the state perstudent
    funding for that student."

    Here is my assumption--if a student would have gone to the public school, but instead chose to use a voucher, that student would count toward the public school enrollment. If that isn't the case, then I can see that Lavar's numbers are not correct. And, unless someone is pulling a fast one on me, that completely pulls the rug out from under one of the main reasons that I support vouchers. But I'm not convinced yet...

    Keep working on me. ;-)

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  10. Jeremy,

    Your "entitlement" argument is interesting, since public education itself is an entitlement and a subsidy. Most taxpayers do not pay enough taxes to cover the costs of educating their own children in public schools. That's why we have public education in the first place, so that higher income households can subsidize the education of everyone else.

    The top 1% of taxpayers pay 20% of all state income taxes (plus or minus a couple of percentage points depending on the year and the state of the economy.) While it is true that the top 1% earn more than everyone else, the bottom line is that their taxes in absolute dollars pay for a disproportionate share of everyone else's education. And that's OK with us. Just don't spew the crap that they are somehow being subsidized when SUBSIDIES are the essence of public education.

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  11. Craig, Jeremy,

    The $429 million are the costs, but the savings due to students switching are not netted from the costs. The LFA has admitted this.

    But going back to my previous mathematical proof, please explain how you get from

    1) no one will switch
    2) all the voucher recipients are rich and
    3) the fiscal impact is $429 million when the impact of the rich will be no more than $8.5 million per year (17,000 existing private school students x $500)

    We've cited this proof several times on our blog, and everytime you and all of the other voucher opponents evade this question. So I'll restate it for the 100th time (at least)

    - How do you get a fiscal note of $429 million when no one is switching, and if you acknowledge that the only way to go from $8.5 million per year to $429 million over 13 years is to acknowledge that students are switching, then why don't you account for the savings. Again, the LFA DID NOT ACCOUNT FOR THESE SAVINGS.

    Please, please don't say the infallible LFA did an impartial analysis therefore we must accept his answers as the gospel truth. Just answer our basic questions yourselves.

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  12. UT,

    The part that I'm suddenly not seeing is the $1.37 billion net savings that Lavar Webb referred to. I thought I had it figured out where it came from, but now I don't know...

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  13. The LFA did a follow up fiscal note per Sen. Bramble's request to account for the savings.

    Unfortunately, it has not received much press coverage.

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  14. UTA,

    All you are doing is evading the real question. Your mathematical proof is silly and your premises are false. You want to talk about numbers until the numbers start going the other way, then you change the subject.

    Now, let's get back to the REAL issue at hand and answer Frank's questions.

    I have a copy of the Bramble memo (Frank I am happy to e-mail it to you if you'd like to see it). The press aren't using it because it is meaningless. Clearly, the $1.8 billion number is incompatible with the $429 million as it was calculated and requested for a specific purpose but it isn't relevant to the discussion.

    To use the $1.8 billion number is to suggest that the two options before voters are:

    1) Enact vouchers, or;
    2) Close down all of the private schools in the state and absorb all of their students into the public schools.

    That's because the $1.8 billion number is the cost to educate EVERYONE WHO QUALIFIES FOR A VOUCHER over the 13 years, which, of course, includes all of the students who would have gone to private schools anyway. We can't count them as savings under the voucher plan if we pay zero for them under the current system.

    I was just waiting for you to subtly discredit the Legislative Fiscal Analyst. I don't think they're infallible, but there is no way on this green earth that they could be off by $1.2 billion dollars!

    The impartial analysis DOES account for those who switch from public schools to private schools. It accounts for both SAVINGS and COSTS. The $1.8 billion figure does not account for costs and the assumptions in it are irrelevant to the voucher discussion. We would only have the cost of $1.8 billion if all private schools shut down and all students over the next 13 years attended public schools instead. Nobody is suggesting that and that is certainly not an option on the ballot. The option on the ballot is the current system or the voucher program. The $1.8 billion number IS irrelevant.

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  15. Craig,

    If you are going to discredit the LFA's savings calculations, then you should discredit the LFA's cost calculations of $429 million as well because they are based on the SAME assumptions (number of students switching, etc.).

    And NO, the $429 million does not account for ANY savings, just the cost of providing the vouchers.

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  16. Craig,

    Please, explain how the 17,000 x $500 = $8.5 million is false.

    Once again, you evaded that simple question. If you are going to assume that no one switches AND all current private school students come from wealthy families, then you MUST assume that the worst case impact is $8.5 million.

    Please, for the 101st time, explain how that is wrong.

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  17. Craig,

    I was waiting for you to say the $1.8 billion is irrelevant.

    The $1.8 billion is irrelevant ONLY if you assume that tens of thousands of students that switch provide no savings.

    And if you don't think tens of thousands of students will switch, then you can't assume the program will cost $429 million even if you assume their are zero savings to be netted against the costs.

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  18. UTA,

    That is absurd. The costs outweigh the savings, plain and simple. You are deliberately attempting to cloud the issue with irrelevant assertions and silly questions - I'm not sure what you're trying to do but it is annoying to those of us trying to get to the bottom of these important fiscal questions.

    I never said the $429 million includes the savings. I said that the IMPARTIAL ANALYSIS includes both the costs and the savings.

    FROM THE IMPARTIAL ANALYSIS (THE RELEVANT DOCUMENT):

    FIRST THE COSTS (using the 13th year as an example):

    "Based on certain assumptions, the Legislative Fiscal Analyst estimates that the Parent
    Choice in Education Program will cost the state:

    $71,000,000 during the Program's 13th year, after all private school students in
    Utah have become eligible for a scholarship."

    NOW THE SAVINGS (using the 13th year as an example):

    "Based on certain assumptions, the Legislative Fiscal Analyst estimates that school
    districts statewide will together save:

    In the 13th year - $11,000,000 to $28,000,000 during the Program's 13th year, after all private school students in
    Utah have become eligible for a scholarship."

    *****************

    NOW, QUOTING FROM THE BRAMBLE MEMO (THE IRRELEVANT DOCUMENT):

    "Per your request this office has estimated the cost of educating in public schools all who would
    qualify for a Parent Choice in Education scholarship over the next thirteen years at
    approximately $1.8 billion."

    This includes switchers and non-switchers. If all of the private schools closed down and the students were absorbed into the public schools, the cost would be approximately $1.8 billion.

    This is completely irrelevant to the discussion and is nothing more than an evasion strategy.

    Thanks...Craig.

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  19. Craig,

    Here is the LFA's methodology for calculating the fiscal impact. This is copied straight from the LFA's own document.

    Please tell me where the SAVINGS are calculated in this methodology

    Step #1. Estimate average scholarship amount

    Step #2. Estimate rate in private school consumption

    Step #3. Calculate the *COST* of current public ed students that switch to private schools

    Step #4. Calculate the *COST* of low income students already in private schools

    Step #5. Calculate the *COST* of new residents that would have gone to private schools

    Step #6. Calculate the *COST* of kindergartners that would have gone to private schools

    Final step: sum all *COSTS* and *COST* of administration.

    In EVERY instance, the LFA states that the cost is determined by the average COST of the scholarship times the number of voucher users. This is the average COST, not the average COST less SAVINGS. Just costs.

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  20. I've already shown you the numbers of the costs and savings from the impartial analysis which everyone has access to. You have not addressed this question. The numbers show that the costs outweigh the savings. You have refused to address that issue.

    Are you saying that the information in the impartial analysis is false?

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  21. Craig,

    If the final year's "cost" is $71 million, how do you get from $500 per student times 17,000 students plus inflation to $71 million WITHOUT assuming switchers?

    Therefore, you assume switchers. Right? (Most voucher opponents won't even admit this part).

    To get to $8.5 million (with inflation plus natural growth w/o vouchers puts us at around $15 million), you need to come up with approximately $56 million in "costs".

    The only way to get to $56 million in net costs is to assume ZERO or nearly ZERO savings for those that are switching, and this is clearly illogical, especially if you assume the average voucher amount is $2,000.

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  22. To get to $56 million, you would need to have 28,000 students switch AND assume that these students generate ZERO savings.

    If you assume that switching students save $1,000 each, then you need 56,000 to swithch.

    If you assume that switching students save more than $2,000 each, then this is proof that the $71 million does not include savings.

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  23. Good night.

    I'll continue this conversation tomorrow.

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  24. Frank,

    If I understand your question correctly the answer is your assumption is almost half correct. When a student takes a voucher and is removed from the public school system their enrollment is still counted as a public school enrollment for funding purposes for 5 years after switching out. This is the mitigation money for school districts spoken of in the legislation and the Impartial Analysis.

    UTA,

    You've brought up an interesting point. Your insistence that I "don't spew the crap that they [the wealthy] are somehow being subsidized when SUBSIDIES are the essence of public education..." doesn't really work.

    All Utahns benefit from the tax money ("subsidies") paid into our existing public education system since we all profit from the well educated populace our school system has proven so effective at developing. Tax dollars spent on public education benefit 100% of Utahns both directly and indirectly.

    The proposed voucher plan primarily benefits those individual families who would never have taken advantage of public schools in the first place. This group represents 3-4% of Utah's student population. Vouchers are basically a new welfare plan targeted at that generally well off population who don't need the new entitlement you're trying to sell us. When you gripe that “...the bottom line is that their taxes in absolute dollars pay for a disproportionate share of everyone else's education...” are you claiming that their disproportionate share of the benefit from this new entitlement is warranted? That is a new argument for vouchers that I haven't heard before. I highly recommend you go public with that one!

    There is no way to compare the benefit Utah's taxpayers derive from their public education tax dollars and the benefit those 3-4% of students would receive from the tax subsidies they'd get under this ill considered voucher plan. You're wrong to contend that the two are somehow the same type of entitlement if that is indeed your contention.

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  25. Jeremy,

    You're having it both ways again.

    You can't say that the wealthy are the primary beneficiary of vouchers and then claim that the voucher impact will be $71 million per year (excluding savings of course) because this number assumes tens of thousands of students will switch.

    The only way to you can maintain both statements is to lower the definition of wealthy to include just about everyone.

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  26. Jeremy,

    If you are going to maintain that only the rich will use vouchers and maintain that the fiscal impact excluding savings will be $71 million per year, then you have to assume that 142,000 rich kids will be using $500 vouchers, which is more than eight times the current private school population.

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  27. Thanks one and all for a lively discussion.

    Craig,

    I would like to see a copy of the Bramble Memo. If you could post a link to it here, that would even be better.

    If I understand it correctly, in a nutshell, (a) $429 million would be the cost over 13 years if all private school students took the voucher money (at the $3,000 rate?), and (b) $1.8 billion is what it would cost over the same period if all private school students returned to the public schools. Is that correct?

    If so, the clouds of my mind are beginning to clear. I think, therefore, that it is important to consider the costs that never occur if students never enter the public schools. Let's imagine what would happen if, through whatever means, (no more Californians moving here, for example) that the public school population remained constant. With the exception of inflation, costs would remain constant.

    So, since they're not going to remain constant, it is helpful to use the $429 million and $1.8 billion as numbers relative to each other and as milestones as to what would happen in either worst-case scenario. The reality will with all probability be somewhere in between.

    Now, (as Enigo Montoya would say) lemme sum up: If 17,000 students coming from the private schools back into the public schools would cost an additional $1.8 billion over 13 years, then if we can keep--through vouchers--that many students from ever entering the public schools, it would be a net savings of a little over 2/3 of the $1.8 billion. The figures would be:
    17,000 [students]
    * (7,500 [cost to educate 1 public school student - 2,000 [average voucher cost])
    * 13 [years]
    = 1,215,500,000.

    That would represent a cost savings to the State of Utah. Now the key (and I think perhaps missing) point is that the $5,500 difference per student between public school cost and average voucher cost NEEDS TO BE AWARDED TO THE PUBLIC SCHOOLS, so that class sizes can go down and teacher salaries can go up.

    I'm not sure if this is happening, but that was my assumption.

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  28. Frank,

    Do your calculations include the fact that mitigation funds only last 5 years?

    UTA,

    You're sidestepping the point you yourself brought up. Even if vouchers don't end up costing as much as the fiscal analyst has estimated this plan still amounts to welfare aimed primarily at those who don't need it. You've never directly addressed that argument...instead you started complaining that the rich pay more in taxes than the poor so I shouldn't "spew crap" about how this new entitlement targets the wealthy with new taxpayer subsidies. Why are you in favor of regressive welfare when it comes to vouchers?

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  29. Jeremy,

    I agree with you that the 5-year mitigation only solves part of the problem. My other point is that for vouchers to really work, the legislature must commit to infusing public education with (at least a substantial part of--I say all of) the savings that accrue as a result of voucher usage. In perpetuity.

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  30. Frank,

    Your proposal would make the plan more palatable to me althought I still have philisophical problems with subsidizing private school attendence while our public schools are doing an excellent job on a fraction of the funding other states pay for their systems. I also don't like my tax dollars funding Madrassas, FLDS schools, and even LDS seminaries. My tithing pays for religious instruction...my tax dollars shouldn't.

    Under this plan the mitigation funds only go to public schools for students who switch from public school to private using a voucher. There are no mitigation funds to schools for students who never would have gone to public school in the first place. As time goes by all mitigation disappears as voucher students go directly to private schools when they reach school age instead of switching from public schools.

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  31. So I agree that as it stands, the voucher system has a HUGE problem. I would like to "get that hole plugged". Then I think we really would get more money per student for the public schools.

    It's funny how this assumption (that savings were all being given back to the public schools) has largely colored my thinking on this whole issue, and I couldn't figure out in light of that how anyone could be against it.

    Now it's making sense.

    ;-)

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  32. I still need to read through all of the comments to try and understand the issue more fully, but I would like to propose an alternative idea...

    I don't see anyway the legislature would consider this because it makes too much sense, but I'll propose it anyway...

    Each citizen/legal resident of school going age receives a voucher at the beginning of the school year. The voucher isn't based on income or anything like that, it's just a flat amount.

    The student can then choose to go either to a public school, a private school or be home schooled. In each case the institution would need to be recognized and approved by the state, and I would propose some form of accountability to make sure that the kids are being taught, but that is all that would be required.

    Once a student has picked a school, the school then redeems the voucher from the State.

    Under this plan, funding is based on students enrolled and it is funded from the bottom up, rather than from the top down.

    The attraction to Private schools would that they could impose various enrollment requirements maintain a higher standard. They would also be permitted to charge fees in addition to the amount they receive for a voucher.

    The way I see it, this creates a true competitive relationship amongst schools and would be far more advantageous for all involved. Better teachers attract more students which means you can pay them more. Bad teachers get taken out of the system because they aren't productive to the school itself, and hopefully with the money flowing up, it would mean less falls into the hands of the fat cats at the district level and more ends up in the classrooms and in the pockets of the teachers that really need it.

    Like I said, it makes too much sense for the legislature to even consider it, but when I run the world...

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  33. It is a good idea and worth considering and fleshing out. One big issue is that ALL schools would have to be required to accept the voucher of any student (problem kids, disabled students, etc.).

    By the way, when you become the ruler of the world, can I be your vice president?

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  34. Frank,

    This has turned into a fascinating discussion. I thank you for raising the questions and for your open-minded approach.

    Urban Koda's idea is similar to the idea known as "backpack funding." With backpack funding, *all* of the money follows the child directly to the school he/she attends. Local school boards are free to use that money as they see fit. However, the schools must not discriminate and must lottery if the applicants exceed the available space.

    Charter schools are the closest thing we have now to such a concept. I am a fan of charter schools (having founded one myself) and I believe them to be a far superior choice alternative to private school vouchers, which, as written in HB148, do not honor the public trust.

    I'll summarize the fiscal discussion in the next post.

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  35. Jeremy,

    You can't say

    1) vouchers are *primarily* targeted to those who don't need it AND

    2) vouchers will cost $71 million (excluding savings) which means that tens of thousands of non-rich students will use it.

    You CAN say that high income folks will benefit from this, but you can't say they will be the primary beneficiary.

    Finally, since the high income households are already subsidizing the rest of us, it's strange to refer to a $500 voucher as a subsidy. That would be like saying any tax cut for the rich would be a subsidy even if they are still paying a disproportionate large share of the public school budget.

    Even with a $500 voucher, the high income are still subsidizing the rest of us tremendously.

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  36. The UTA commenter trying to pin down Jeremy on the rich vs. poor is yet another diversion tactic.

    Alright, here's my summary of the fiscal questions. UTA is clearly trying to cloud the facts by introducing tangents into the discussion.

    1. In summary, vouchers will cost more than they will save. This is made clear in the impartial analysis from the Legislative Fiscal Analyst.

    2. We are currently spending $0 for existing private school students. According to estimates, the overwhelming majority of students who will be attending private schools never intended to go to a public school. The cost to subsidize "non-switchers" greatly exceeds the savings resulting from the "switchers" - hence, the program would cost more than it would save.

    3. According to the impartial analysis, over the 13 years of the voucher program (when all private school students are eligible for voucher money), the COST to taxpayers will be $429 million.

    3. According to the impartial analysis, the SAVINGS, which includes the difference between what we would have spent on the switchers minus the amount given out in the voucher is far less than the total COSTS. In the 13th year, for instance, the estimated COST is $71 million and the estimated savings is, at most, $28 million. That's a $43 million NET COST to the taxpayer in year 13 alone.

    5. To arrive at the exact overall NET COST will require additional detail from the Legislative Fiscal Analyst. I wish they would have included the year-to-year costs and savings in the voter information guide instead of just year 1 and year 13. However, based on estimates and what we do know from the LFA, even in the BEST CASE scenario, vouchers will have a NET COST of at least $200 million dollars over the 13 year period. This is a FAR CRY from the $1.37 billion in savings that Lavar Webb posted in his errant editorial.

    Even if we grant UTA the assumption that the Legislative Fiscal Analyst is not 100% correct on his estimates, there is NO WAY that he is off by over a billion dollars! Even if he were off by 50% (which is absurd) the net cost would still be around $100 million dollars.

    So, to make a long story short, vouchers will COST much more than they will SAVE. This is the ballot measure before the voters. Claims to the contrary are either misleading, irrelevant, or both.

    Thanks...Craig.

    ReplyDelete
  37. Craig,

    There are two types of costs:

    1. Giving $500 vouchers to students that would have attended private schools without a voucher

    2. Giving vouchers to students that would have gone to public schools but are switching

    and one type of savings:

    1. Forgone costs to educate switching students.

    Now, the first cost has no offsetting savings so we can readily calculate that. Assuming, as you have, that all private school students are rich, the cost would be $8.5 million per year (17,000 x $500). Add inflation and natural private school growth and the amount in year 13 will be around $15 million (estimate).

    Now, the only way to get from $15 million to $71 million (a difference of $56 million) is to unrealisticaly assume that cost #2 is greater than savings #1.

    Not only greater but substantially greater, and here's why. If you unrealistically assume that there are ZERO savings when students switch, you have to assume that 28,000 students will switch with $2,000 vouchers (LFA estimate)

    If you unrealistically assume that schools save $1,000 per switching student, the number of switchers increases to 56,000.

    Of course, you have to say 56,000 students are switching while at the same time you say that no one is switching.

    If you more realistically assume that savings exceed $2,000 per switching student, then you start netting out the $15 million from cost #1.

    Btw, the worst case scenario, assuming that savings per switcher exceeds $2,000, is $8.5 million out of a total school distric budget in FY08 of $4.1 billion.

    ReplyDelete
  38. UTA,

    You're fixated on forcing a discussion of bogus points that have nothing to do with the realities of the bill. I see that for what it really is - a desperate diversion tactic because the facts are not with you. The cold hard facts are this bill will cost taxpayers hundreds of millions of dollars.

    I have laid out clear facts. You are merely throwing out irrelevant assumptions and spurious premises.

    Don't spoil the good things your organization has done by becoming fixated on changing the subject and drawing attention away from the actual facts of this bill. It cheapens your advocacy of other issues.

    I trust the impartial analysis as written by the Legislative Fiscal Analyst. I've now seen at least two other studies that confirm their findings.

    The bill costs far more than it saves, period. End of discussion.

    If you have nothing new to add, I'm done for now.

    Kind Regards,

    Craig.

    ReplyDelete
  39. Because undocumented children will not be able to use a voucher but are still required to be accepted at public schools, the net effect of this mess is ti increase the PERCENTAGE of non-English speaking students in public schools. They are very expensive to teach so the money "saved" will be eaten up very quickly.

    ReplyDelete
  40. Sara,

    Why will the "savings" be eaten up by undocumented children?

    First of all, voucher will be available to all Utahn resident children, including undocumented.

    Besides, even if that weren't the case, the real issue is the incremental cost and the incremental savings of vouchers. Even if only white students took the voucher, there would still be more money for everyone else in the system.

    ReplyDelete
  41. Craig,

    Diversion tactic? Our points directly address the issue at hand: costs vs savings.

    Spurious premises and irrelevant assumptions? We basically working off your assumptions.

    Impartial analysis? That's just code for "it backs up my point". If the impartial analysis didn't back up your point, you would say the mean Republican legislators made the LFA do a bogus analysis, and then you would state why it's bogus.

    ReplyDelete
  42. Sara,

    You raise a good point, and I hope UT's answer to you is correct.

    UT,

    The problem as I see it is that it does not seem to be guaranteed that this extra money will be going back to the public schools. As the law stands now, I don't think it will. If I'm correct, then Craig's and Sara's and Jeremy's points of view make a lot of sense. If not, and the extra money from kids who never did actually attend a public school DOES go back to the public school, then I guess/hope that allays a lot of their concerns.

    ReplyDelete
  43. I find myself unable to make heads or tails of the impartial analysis. The problem I've found is that the impartial analysis (which apparently is some kind of sacred cow) is that it fails to note if the savings are net or gross. I've heard plenty of assertions that it's gross, but I can't find any definitive confirmation. Outside of the impartial analysis (which raises as many questions as it answers), I can't find much on the Legislative Fiscal Analyst's website.

    If the savings are net, then the discussion about cost is over. If the savings are gross, then we're able to start arguing over which numbers are accurate. Until someone proves that point, all of these numbers are no better than made-up figures.

    ReplyDelete
  44. Jesse,

    Thanks for your comments. I appreciate your blog and have read it on several occasions.

    The impartial analysis is not a sacred cow - it simply exposes the fact that it is inaccurate to suggest that HB148 saves money. Voucher supporters may have other arguments to advocate their position but saving money cannot be one of them because it is clearly false.

    What additional proof do you need? What additional information would you like to know? Groups like PCE and UTA will continue to try to confuse this issue because the impartial analysis disproves one of their most cherished talking points.

    Tell me this - how can the Legislative Fiscal Analyst, whose professional career is to advise the entire legislature on the fiscal impact of their work, be off by over a BILLION dollars? If this were true the entire staff should resign immediately. If we can't trust what they say then we're all in a world of trouble in this state.

    PCE is running a misinformation campaign. They're hoping to throw so many numbers into the mix that it confuses people. But the cold hard truth is that if HB148 takes effect the final bill to taxpayers will be hundreds of millions of dollars.

    I now have additional detail from the Legislative Fiscal Analyst's office. It simply reaffirms the information found in the voter information guide.

    What more possibly needs to be said?

    Thanks...Craig.

    ReplyDelete
  45. [I]t simply exposes the fact that it is inaccurate to suggest that HB148 saves money.

    But if we have never satisfied the net/gross question, that claim can't be made.

    What additional proof do you need? What additional information would you like to know?

    I just want the net/gross question answered by an impartial party. As much as you're a stand-up guy, Craig, I can't trust someone with a dog in the fight. ;)

    I now have additional detail from the Legislative Fiscal Analyst's office. It simply reaffirms the information found in the voter information guide.

    Care to share?

    ReplyDelete
  46. Jesse,

    I'm proud to have a dog in this fight. It's important to me that if we're going to move forward with a program like vouchers that we do so responsibly. HB148 is not a responsible bill.

    Since you want to hear it straight from the source, give John Massey's office a call. Ask them for the year-by-year cost and savings breakdowns for HB148. I'm sure you can also ask your gross vs. net question.

    I don't pretend that answering this question will change your mind on vouchers; but at least it should put to rest the notion that HB148 saves money.

    Thanks for being a gentleman through this debate and on your blog.

    Kind Regards...Craig.


    John Massey
    Legislative Fiscal Analyst's Office
    jmassey@utah.gov
    538-1034

    ReplyDelete
  47. Hey guys,

    I just posted this analysis on Frank's other voucher thread. I think it answers your net/gross question fairly well Jesse. I'm open to corrections if I'm wrong in any of my calculations, assumptions or conclusions.

    For all of my calculations I’ve been using the Legislative Fiscal Analyst’s average voucher figure of approximately $2000 and the Utah Taxpayer Association’s figure of $7500/student for public education. With these assumptions each student who switches from public education to private (switchers) will save the state $5500.

    In order for a fully implemented voucher system to just break even, the number of switchers must be just over 36% relative to the total number of private school students.

    Here’s how the numbers break down for a total private student population of 30000.

    30000 x $2000=$60,000,000 total voucher amount.
    30000 x .3636 x $5500=$59,994,000 total savings from “switchers”.

    This gives us a net loss of $6000, basically a wash.

    Now, to get to a private school population with 36% switchers, the actual switch rate relative to the base private school population is about 57%. (19092 base population + 10908 switchers = 30000 total population). A 57% switch rate is simply unrealistic in the real world. In fact, it is almost four times the 14.5% rate estimated by the LFA.

    Don’t forget, this wildly unrealistic switch rate is just to get us to the break even point. In order to get any type of real savings from the voucher program, the switch rate would have to be even higher. For comparison’s sake, a 100% switch rate would lead to a net savings of about 28.6 million. Again, this is hardly a windfall for taxpayers or public schools and it is based on a virtually unattainable number of switchers.

    In the end it is hard to conclude anything other than Parents for Choice in Education, their media lackeys (Lavar Webb) and the Utah Taxpayer’s Association are being completely dishonest in touting the voucher program as some great benefit to public schools and/or a huge savings for taxpayers. It’s either that or they just don’t know what they’re talking about.

    ReplyDelete
  48. Craig: Thanks for the contact info. I e-mailed Mr. Massey to see if I can get that point clarified.

    Don: I'm not sure I follow the calculations. What's this 36% figure used to calculate the savings? Is that presuming that only 36% of the future private school population is comprised of switchers? If that's the case, it means bumping private school enrollments from 3% to 4% of Utah's students. Given that the national average for private school enrollment is around 12%, it doesn't seem as far-fetched to me to have such an increase. (Of course, I'd like to compare us to other farm/rural states to see how we compare to them as well. It'd be more apples-to-apples that way.)

    Given these numbers, it would seem that a break-even point would be easier to hit. This would be especially so if the "non-switchers" are primarily from higher-income families that would receive lower voucher amounts, lowering the percentage of switchers required for a break-even point. (I don't suppose anyone has a breakdown of current private school students by income bracket, do they?) If we're making assumptions that most current private school students would be qualifying for the $500 voucher, that drops the threshold for break-even substantially, potentially to the 14.5% figure estimated by the LFA.

    I don't to make too many assumptions absent hard data, but this is certainly something worth considering. I'd also be interested in finding out how many students become ineligible if a cap on income were instituted. Please correct me if I'm mis-interpreting the numbers.

    ReplyDelete
  49. Jesse,

    Yes, the 36% is the percentage of future private school enrollment that must be composed of switchers (those who without the voucher would otherwise go to public schools). It is actually the ratio of the average voucher amount to the average per pupil public school spending less the average voucher amount [2000/(7500-2000)].

    You're right that the increase as a percentage of total student population is not that great. I did not look at it from that angle before and I probably should have. It definitely makes the goal seem more attainable (i.e. not quite "wildly unrealistic" as I said before). That being said, I started with the 14.5% switch rate stated by the LFA. I am not a statistician so I don't know what exactly goes into choosing this figure (elasticity and price reduction are mentioned in the LFA fiscal note). I'm assuming the LFA knows what they are talking about and that the 14.5% is a fair estimate. (Otherwise, why would we be paying them for fiscal analysis?)

    In the first year of implementation, the LFA is estimating a total of 2379 switchers. Obviously that is a pretty low number relative to the 540000 currently in public school. But that is the number they estimated in order to actually fund the voucher law so I must assume it is a "good" number. If you get in touch with the LFA, maybe you could ask him what the probability of the switch rate being closer to 57% would be? If it's somewhat a possibility then it would seem we have a great deal of unpredictability in estimating the actual cost of the system. It may even end up being woefully underfunded if the Legislature has only appropriated the 9.9 million specified in the fiscal note.

    Regarding the price elasticity effect on the decision to switch, you could obviously increase the number of switchers by increasing the maximum voucher amount. But this would of course increase the average voucher amount, consequently increasing the break even point as well. For example, if the maximum voucher was $5000 and the average voucher increased to $3000, the breakeven point would be about 67% ($3000/$4500).

    You're also right that if the non-switchers are primarily wealthy and only get $500 it could drive the average voucher amount down, thereby lowering the breakeven point. But I'm not going to get into second-guessing the LFA on the average voucher amount. They gave us the $2000 figure; I think we should just stick with that.

    I also would like to know how much could be saved by implementing an income cap for the minimum voucher. Even if it saves only the 8.5 million UTA keeps throwing out as the cost for non-switchers (17000 x $500), that would drive the average voucher amount down to 1716 and the breakeven point down to about 31%.

    The fact that there is no income cutoff is actually one of the biggest sticking points for me with HB148/174. It's not the only one, but to me, it's simply bad public policy to be subsidizing those who do not need it with taxpayers' money.

    Thanks for bringing a new perspective to the data Jesse. I'll be very interested to hear what the LFA has to say if you hear back from him.

    ReplyDelete
  50. Guys, it's real simple. Private school costs less, educates as well if not better and is a win-win for the students and the populace. The money now being spent per pupil in public schools will ultimately be larger then before and the public school kids will have a better education. Win-win. It's a win-win-win-win. Get over it and move on.

    ReplyDelete
  51. Anonymous,

    I agree with you except for that they should just get over it and move on.

    They have valid concerns that need to be addressed. I still will vote for vouchers, but there are issues (funding) that need to be fixed. I trust that the legislature showed good faith in the last session by increasing public school funding, that they will do what needs to be done to make this a true win-win-win situation.

    ReplyDelete
  52. If public money is spent for private schools, they should answer to the public and be under public control. This is nothing more than welfare for the rich.

    ReplyDelete
  53. Steve,

    Thats a very simplistic and inaccurate argument. The very public school systems are welfare for all children. Vouchers, as implemented, will save the State of Utah approximately $5,500 per every child who decides to transfer from the public to the private schools. The rich are the least likely to benefit from vouchers (although I wish the legislature had phased the voucher stipend down to $0 for the rich). Instead it is a redistribution of an already existing redistribution of wealth--to everyone who wants to use it.

    If you don't advocate requiring families to pay for all their children's public education, then your line of "welfare for the rich" logic doesn't make much sense either.

    ReplyDelete
  54. I went to the Utah.gov page and found the education budget number for FY2008. It was $3.46 billion.

    So if we take $3.46 X 13 = $44.98 billion.

    Even if we are talking about an increase of $430 million over 13 years, when you comapre it to the existing education budget, not even taking future increases or inflation into account, it turns out that it would be a 0.95% increase in spending to fund the vouchers.

    What if that money had gone to increase the education budget instead? I can see the commercials from UEA now: "The Legislature has increased spending on education less than 1 percent in the last 13 years. Utah students deserve more..."

    ReplyDelete
  55. Excellent point. The supposed amount spent is very minuscule.

    But the amount that can be saved overall is huge when we think that JUST ONE student leaving the public schools before kindergarten saves the State of Utah $71,500--in 2007 constant dollars--throughout the course of that one student's education. (13 years * $5,500)

    ReplyDelete

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