Fiscal Note Fantasy

The debate over vouchers began this week in the Tennessee House and Senate. A new vehicle for carrying vouchers (HB1049/SB999) is the chosen method for implementing a voucher scheme in Tennessee.

Of particular interest is the Fiscal Note, prepared by the legislature’s new Executive Director of Fiscal Review, who previously worked at the Friedman Foundation — an outfit dedicated to school choice.

The analysis of costs points out a shift of state and local dollars to non-public schools in an amount that goes up to nearly $70 million by FY 18-19 and beyond.

For local education agencies that have schools in the bottom five percent of achievement and are mandated to participate in the statewide scholarship program, the shift of state and required local BEP funding from these local education agencies to the non-public participating schools is estimated as follows: $16,570,000 in FY15-16; $25,473,800 in FY16- 17; $34,815,000 in FY17-18; and an amount exceeding $69,630,000 in FY18-19 and subsequent years.

In an unusual twist, the analysis notes a long-term savings to local governments and LEAs. Specifically:

LEAs with participating students will be relieved of the long-term educational cost burden of educating such students. Using the third year of the statewide program as the baseline, the cost burden relieved in FY17-18 is reasonably estimated to be $24,275,000.  This amount will increase in FY18-19 and each subsequent year. The long-term result of such cost burden relief could be a permissive decrease in local expenditures, a permissive reallocation of local funding, or a permissive cost avoidance of local expenditures. Cost burden relief may also result in a higher per pupil expenditure for students that remain within an LEA school. An LEA’s capacity to make any such permissive choice depends on the number and dispersion of students that participate in the scholarship program.  If the number of participating students is small and widely dispersed across grade levels it is less likely that any such permissive choice could be implemented, but more likely if the number is large and concentrated in just a few grades. 

What is not mentioned is the net loss of $10 million if these assumptions are accurate. That is, the FY17-18 “cost shift” is $34 million and the savings or “relief” is $24 million. In FY18-19 and beyond, the cost shift is nearly $70 million, with no estimate provided for cost relief, though it should “increase.”

First, I’d note this is still a net loss to school systems.

Next, I’d point out that fixed costs would mean the projected relief is more fantasy than reality. This is admitted to some extent when the note says:

If the number of participating students is small and widely dispersed across grade levels it is less likely that any such permissive choice could be implemented, but more likely if the number is large and concentrated in just a few grades. 

Additionally, a recent report on the impact of charter schools on MNPS gets to the same point in terms of students lost versus fixed costs:

“The key question for determining fiscal impacts is whether enrollment reductions allow a district to achieve expenditure reductions commensurate with revenue reductions. Fixed costs are incurred regardless of whether students attend traditional or charter schools. The problem is that some fixed costs, such as building maintenance, computer network infrastructure, and health services do not vary based on enrollment. Therefore, teachers and their salaries are a key cost driver tied to student enrollment … However, it is not always possible to reduce teacher costs proportionate to losses in revenue. For these costs to be reduced significantly, the school would need to close altogether.”

This analysis suggests two things: First, that the Fiscal Note assumptions about cost “relief” may be suspect and second, that the only way to gain true cost savings from a voucher program would be through school closures.

That’s right, to get true savings from a voucher program public schools would have to close. If they don’t, the cost shift noted in the fiscal analysis would mean increased costs to districts who then operate with decreased revenue.

This may be the fantasy of voucher advocates, but it’s a nightmare for public schools and the families they serve.

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4 thoughts on “Fiscal Note Fantasy

  1. Pingback: TNEdReport: Voucher Program's Fantasies - Bluff City Education

  2. Pass this bill and when there is no gain to the LEA in the future who is going to make up for the lies that are being told. People need to understand that Charters and Vouchers are the vehicles that will be used to destroy traditional public schools, private schools and religious schools. If a private and/or religious school takes students with vouchers are they not required to now follow state mandates for standards and testing? Believe me they will and federal is right around the corner. I don’t need to repeat the other issues stated in the article. The REAL agenda behind Charters is NOT to help poor children achieve academic success. That argument is just the window dressing so people cannot say no to them. At the end of the day the agenda is to privatize traditional public schools and eliminate those pesky old elected school boards. And when this happens parents will not only have NO CHOICE they will have NO VOICE. Just ask the parents in New Orleans. We need to stop the Voucher and Charter madness before it is too late. Chris Barbic of the ASD has been trained at the Broad Superintendent Academy (2001) Eli Broad believes that education should be run like a business and his academy trains its graduates on the art of privatizing our schools through Charters. Think about the bottom 5%. What happens when this years bottom 5% are moved to Charters….do they stop? No. There will ALWAYS be schools at the bottom 5% so it will just continue until the majority of our schools are transformed into Charters. Sen. Harper (SB975) and Rep. Mitchell (HB508) have a bill to shut down ASD and if we don’t accomplish anything of real substance this year we MUST get those two bills passed. Call your Rep and your Senator and ask them to support SB975 and HB508.

  3. Pingback: Tennessee Education Report | TSBA Talks Vouchers

  4. Pingback: Tennessee Education Report | Vouchers Gone Wild

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