Tag: School choice

As the residents of USD 259, the Wichita public school district, consider a bond issue whose purpose, partly, is to reduce overcrowding, we should consider a way to reduce overcrowding in schools that would be much less expensive.

The district is not likely to consider this method. Whenever school choice implemented through vouchers or tax credits is mentioned, district officials and the teachers union immediately claim that school choice will drain money from public schools and lead to their ruin. But is the claim that school choice drains money from public schools true? Let’s sharpen the pencil and do some arithmetic and see what happens.

USD 259 receives funding from three sources: the federal government, the state of Kansas, and the tax levied on property within the boundaries of USD 259. These funding sources react differently to changes in enrollment.

According to information on the Kansas State Department of Education website, state funding for education is based on this formula: “Base state aid per pupil (BSAPP) times adjusted enrollment equals state financial aid (SFA).”

There may be subtleties in the way that state funding is calculated, but let’s assume the worst case for local school districts that the formula implies: that when a student leaves a school district for any reason the district loses the entire amount of state aid per student. Similarly, let’s assume the district loses the entire amount of federal funding per student.

The local district, however, won’t lose the local funding. That’s because the source of local funding is the property tax. The amount raised depends solely on the assessed value of the property in USD 259 and the mill levy (the rate at which property is taxed). The number of students enrolled in USD 259 schools has no effect on the amount raised locally.

The following table illustrates what happens to school funding as enrollment changes. The row “2006 – 2007 figures” shows figures obtained from the Kansas State Department of Education, and the row below that calculates the funding per student from the three sources of funding.

Now suppose that some students leave USD 259. The row “Reduction in funding” shows how much money USD 259 would lose, based on the number of students that leave. Note that the funding from federal and state sources decreases, but local funding, because it is based on property tax, does not change. The row “Remaining funding” shows how much USD 259 will receive, and the next row calculates the funding per student.

Note that as the number of students in USD 259 declines, the funding per student increases. The following chart shows what happens to available funding per student as increasing numbers of students leave USD 259. Again, it doesn’t matter why the students leave USD 259. The effect on funding is the same. There is no “draining” of money. The total amount the district has available to spend will decrease, but their costs do, too.

Opponents of school choice have many arguments to refute the simple arithmetic of the financial impacts of school choice on local school districts. One important consideration is that schools, like most businesses or institutions, have both fixed costs and variable costs. Opponents of school choice often claim that the costs schools face are mostly fixed costs, so reducing enrollment leads to little cost savings.

Research, however, shows otherwise. A 2006 study in South Carolina found that fixed costs were 20 to 25 percent of per pupil costs. A study using data from New Hampshire for the 2001-2002 school year found that 73 to 87 percent of total costs of schools are variable, meaning that 13 to 27 percent of costs are fixed. So fixed costs are a relatively small part of a school district’s total costs, meaning that schools can adjust their costs quickly when faced with changes in enrollment.

Furthermore, fixed costs become variable over longer periods of time. School districts can adjust their level of fixed costs as they adjust to changing enrollment levels over time.

Is the analysis really this simple? Fundamentally, it is. School districts, however, may face numerous constraints on the way they may spend the funds they receive from various sources. There may be all sorts of strings attached. That is a problem itself, as it prevents public schools from allocating their resources flexibly and effectively.

In summary, school choice does not drain money from local school districts. Yes, total funding and spending declines as students leave to attend other schools, but costs decline too. School overcrowding –- a major reason given for the need of the bond issue in the Wichita public school district — is reduced or eliminated.

If the administration of USD 259 has information or reasoning to the contrary, let them make their case. Until then, the citizens of the Wichita public school district must wonder why the district is unwilling to consider this method of reducing school overcrowding without an expensive bond issue.

Note: Implementing school choice in Wichita funded through vouchers or tax credits would require a change in Kansas state law. If the board and superintendent of the Wichita school district were to ask the Kansas legislature for such a law, it would probably happen. Especially because one important Kansas lawmaker is a resident of the Wichita public school district. That’s Jean Schodorf, Kansas state senator and chair of the senate education committee. We could hardly have a more powerful ally to help us effect meaningful reform in USD 259.

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According to USD 259 (Wichita public school district) officials, one of the prime reasons a bond issue is needed in 2008 is that schools are overcrowded. New classrooms and new schools must be built, according to district officials, to solve this overcrowding problem.

This is another way to reduce overcrowding, and it won’t require spending any new money. In fact, the Wichita school district might even save money, and satisfaction with schools in Wichita will increase.

How can we do this? The State of Kansas and USD 259 can implement wide-spread school choice funded by vouchers and/or tax credits.

This may seem contrary to common sense at first. After all, one of the primary criticisms of school choice is that it “transfers precious tax dollars from public schools,” according to a national teachers union.

But facts don’t back up this claim. In 2007, The Milton and Rose D. Friedman Foundation published a study titled “School Choice by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006.” According to the executive summary: “Every existing school choice program is at least fiscally neutral, and most produce a substantial savings.” How can this be? The teachers union and education bureaucrats would have us believe that vouchers would kill public education.

Here’s the answer, from the same study: “In nearly every school choice program, the dollar value of the voucher or scholarship is less than or equal to the state’s formula spending per student. This means states are spending the same amount or less on students in school choice programs than they would have spent on the same students if they had attended public schools, producing a fiscal savings.”

In Wichita, if the school district would loosen its monopolistic grip on the use of public tax dollars for schools, some students would take advantage of a voucher or tax credit program and go to school somewhere else. These students that left the Wichita public schools would reduce or eliminate the overcrowding problem.

Yes, the Friedman Foundation advocates for school choice. It was Milton Friedman himself who promoted school choice as a way to solve problems with public schools. It’s an idea that is very popular with parents in the several places in America where school choice is in place. This is especially true with poor and minority families, as they have the most to gain from expanded choices in education.

Expanding school choice in Wichita through vouchers or tax credits would give parents greater control over their children’s education, and it would solve the overcrowding problem without spending many millions on new classrooms and schools.

Writing from New Orleans, Louisiana

“The AFT supports parents’ right to send their children to private or religious schools but opposes the use of public funds to do so. The main reason for this opposition is because public funding of private or religious education transfers precious tax dollars from public schools …”

This is a typical criticism of school vouchers, here expressed by one of the nation’s teachers unions. But what about the reasoning behind this claim?

A common plan for vouchers calls for the school that loses a student to a voucher school to also lose the funding that accompanied that child. So it appears that the voucher critics may be correct — if the amount lost due to the voucher was equal to per-pupil spending.

But most voucher plans call for the voucher to be just a small fraction of per-pupil spending. Most vouchers are for less than $5,000. With USD 259, the Wichita public school district, spending some $12,000 per student per year, a $5,000 voucher is only 42% of per-pupil spending.

Because the voucher is for less than per-pupil spending, the school that loses the student is actually better off, financially, than before. As long as the amount the school loses to a voucher is less than per-pupil spending, the school has more money to spend, on a per-pupil basis.

We have to wonder why the public school bureaucracy and newspaper editorial writers do not realize this. Perhaps their opposition to vouchers isn’t solely financial. There is evidence from Utah is that this is true. This has been reported in the Deseret Morning News: “When a student leaves a public school [in Utah], the legislation requires the state to continue to supply that public school’s district the portion of the per-pupil funding that is over and above the state-wide average voucher amount, and to continue doing so for a period of five years following the transfer or until the student was scheduled to graduate.”

Even this provision does not satisfy the opponents of vouchers. It also doesn’t do much to provide competition to the public schools, which is one of the positive things vouchers will do. The article realized this: “Unfortunately, this will minimize the voucher program’s competitive effect that might otherwise spur innovation in the public school system.”

The advocates of the public school monopoly say that education isn’t about money, that it’s all about the children. But when it comes time to oppose vouchers (even though the argument is false), or to sue the legislature for more funding, or to raise property taxes, or to float the idea of a bond issue, well, it turns out that it is all about money.

In a recent Wichita Eagle article, Wichita school superintendent Winston Brooks promoted accountability. But if he truly believes in being held accountable, he would advocate allowing competition through school choice funded by vouchers and/or tax credits. It’s one thing to say you want to be held accountable. But it is another thing to actually be held accountable by parents who would have the credible threat of taking their children somewhere else.

In Kansas, most parents don’t have a credible threat of sending their children to a non-public school. Incremental reforms have been tried for years, and more such proposals appear every year. It is time, however, for radical change. School choice implemented through vouchers or tax credits (a better idea) would allow the magic of entrepreneurial competition — instead of the present amalgam of education bureaucrats, self-serving politicians, paid lobbyists, and teachers unions — to supply schools that parents really want.