Answering the critics of liberty in learning: SB 57 in committee today
Tuesday, May 6th, 2008 By David Hansen
Up for a vote today in the Ohio Senate Education Committee is a bill giving families of children with disabilities new options for their education. The provisions of Senate Bill 57, also known as a special needs voucher, were passed by the General Assembly last year as part of the budget bill but were vetoed by Governor Strickland.
The Governor gave two reasons for his veto: first, school choice programs lack accountability; and, second, school choice programs harm public schools and the children who remain in them.
When debating SB 57 in committee, on the Senate floor tomorrow and hopefully in the House of Representatives in coming weeks, legislators should keep these two points in mind refuting the reasoning used by the Governor and others in opposing this measure:
- SB 57 offers accountability far superior to that of the status quo. Parental-based accountability embraced by SB 57 is superior to the regulatory accountability championed by the education establishment. Through politics, superintendents and teachers unions can game the regulatory system to their advantage, avoiding true accountability to parents and taxpayers for their performance as educators of our children.
But there is no gaming of a parent, and this makes parental-based accountability so effective.
(For more see: “Accountability and School Choice” by Beth Lear and Matt Carr.)
- SB 57 helps all children with disabilities, including those who remain in public schools. Florida’s special needs voucher has been shown to improve the performance of public schools in educating disabled students through the power of parental-based accountability. Faced with either improving their performance, losing students, or, whining about how they were being hurt by school choice, Florida’s public schools took the high road and got better at educating the special needs students who remain in their care.
The fact is that not only is school choice not harmful to public schools, it actually spurs better performance from them.
(For more see: “The Effect of Special Education Vouchers on Public School Achievement: Evidence From Florida’s McKay Scholarship Program” by Jay Greene and Marcus Winters.)
Tags: Education
May 6th, 2008 at 11:46 am
I would be fine with SB57 if the state was paying the bill, but the vouchers are being paid partially or, for around 300 school district, totally with LOCAL taxpayer dollars raised through LOCAL property tax levys. I find it hard to believe that the buckeye institute would advocate forcing your neighbors to pay the bill for private school for your child but that is exactly what SB57 does for those districts that are on the state’s transitional aid guarantee.
There is a solution and it is one that the buckeye institute and all champions for school choice should advocate for, and that is to fix the funding formula in the state so that the money truly follows the kid.
The other problem with SB57 is that it requires the local school district to reevaluate the child every year, even though the child is educated elsewhere. The local district has to have staff available for evaluations and every evaluation has to be brand new because they have no clue what’s happened in the last year.
In a nutshell, if the state wants to make vouchers available, I’m all for it, but the state should pay the entire bill and the local school district should be left out of it.
May 6th, 2008 at 5:36 pm
There has been much misinformation dissemanated by school choice opponents concerning the funding of Senate Bill 57. The language in the bill itself requires that only state funds are used.
Some of the confusion could be the result of a term that is used when discussing this issue, and that term is “local share”. According to the Ohio Department of Education, the term “local share” does not refer to locally generated tax dollars. “Local share” refers to a method used in the state’s calculations to make adjustments in the funds distributed by the state to the resident district.
The bottom line is, the state distributes money in essentially one big pot. While the district puts in their local tax dollars to ensure at least minimum funding levels, voucher money is only removed from the share the state sends to the school. But Marc has a great point — the best funding would be a system where the money truly follows the child.
Regarding reevaluations, the sponsor believes that issue is going to be addressed through an amendment that will simply relieve the public schools of this responsibility, but an initial IEP will still be required to obtain a scholarship. The federal government also has a requirement that the public school district offer to review the IEP every 3 years.
May 7th, 2008 at 11:41 am
Beth:
Please review the SF-3 from Worthington City Schools. You may find it here:
http://www.mschare.com/finance/021408sf3.htm
As you can see, the money that Worthington pays for school choice now is below the guarantee line. Since Worthington is on the transitional aid guarantee, it receives zero dollars for each additional student, however, the we pay the full cost of each scholarship.
In other words if an autistic student moved into Worthington tomorrow and decided to use a scholarship Worthington would lose the entire $20,000. We would get nothing additional (state share = 0%) from the state to offset that lose, therefore, the entire cost of the scholarship would be paid with local taxpayer dollars.
I urge the buckeye institute to get clear on this point. Before school choice has a prayer (no pun intended), the state must pay 100% of the cost. In Worthington, the state pays 0% of the cost and as much as I agree with choice, I could never advocate for local property tax dollars paying the cost of the scholarships.
If SB57 becomes law, and this is a hypothetical because the governor will veto it, Worthington would face a loss somewhere between $200K and $900K annually. Since the entire loss would have to be made up from local taxpayer dollars, that would add somewhere between .25 and .5 mills to our next levy request, and that assumes the best possible outcome from the next state budget.
Note that 300+ school districts are on the transitional aid guarantee. Your explanation would apply (somewhat, not entirely) to the 300+ others that are not on the guarantee.
Respectfully,
– Marc.
May 7th, 2008 at 4:29 pm
Marc,
I should probably delve into the specifics before writing, but isn’t it the case that Worthington’s revenue is more or less fixed? Simplified, isn’t it merely the tax base times the tax rate, leaving a fixed pool of money that is entirely independent of the student population? Thus, if you are the Lake Erie islands with lots of tax value and few students, your per student funding on a local basis is astronomical, whereas if you’re in a county with any kind of population but no tax base other than trees and hills, your per student funding is tiny.
I wonder whether what you’re saying might be true, but what it is really about is how big the state check is that comes to you. If your state share were zero, you’d still have to pay for that autistic student moving into your district; it would only reduce the money you have per student. The large urban schools have been in catastrophic free fall, population-wise, for years, but that has the effect of massively increasing the per-student local dollars. Not because there’s more money; that’s fixed. It’s only because there are fewer students.
This is essentially the same argument that was before the Ohio Supreme Court a year or two ago about charter students; those students would leave, but they would take only their state share with them when they did. That upset the schools, though, because they argued that there was no marginal savings (could not close a school or lay off a teacher for one student, etc. Somehow, though, the marginal argument never worked the other way: Add a student, and by golly they want that incremental per student amount from the state, even though they don’t have to hire a teacher or open a building).
So am I right or wrong? If I’m right, then what the state is saying is, “Sorry, your share is being cut. I’m spending the money elsewhere.” It just happens that they’re spending it on autistic students.
Cheers,
Mike
May 7th, 2008 at 11:52 pm
Mike, you want to base your argument on “Cost Per Pupil”, but any argument based on cost per pupil fails becaue the cost per pupil in any school or any individual district is a random number based solely on the years of experience and degrees earned of the certified staff that happens to be there at that point in time. There is little correlation between the cost per pupil and the services delivered to that pupil. So long as teachers are paid in accordance with ORC 3317.14, it is wrong to use costs as a metric for efficiency. A better metric would be FTE per pupil and this is a difficult number to come by, at least at the state level.
You make (I think) two points. Your first point is that absent SB57, we would still have to educate an autistic child that moves into the district. You are correct, however, we can easily employ economies of scale. It is unlikely we would need to add a teacher or open a building and can easily absorb the cost of an additional child. In Worthington, we do it all the time. Of course, the state continues to mandate class size requirements and, in some cases, class ratios between special needs children and typically growing children. With SB57, we lose the entire cost of the voucher and you are correct, the loss of one student would not allow us to close a building or eliminate a teacher.
Your second point is that with SB57, all the state is saying is that we are cutting your share and spending the money elsewhere. That’s not how it works. Perhaps an explanation is in order.
Currently, when a student attends a charter school, the state adds one to a district’s ADM (theoretically to provide additional state funding for that student) and subtracts the cost of the charter school. Charter School tuition will deduct between $5,565 and $20,000 per student depending on the specific schools or disabilities from the district’s state aid formula amount on the SF-3. For districts on the state guarantee, adding one to the ADM does not change the funding and the entire cost of the voucher is still deducted from the SF-3.
The way that it should work is as follows.
The state should modify the formula to not add one to district’s ADM for students attending charter schools and to not deduct the tuition amount from the district’s SF-3. Essentially, it would appear, at least as far as the district is concerned, that the student did not exist at all. An allowance would be required for those charter school students still requiring services such as transportation from the public school district but in general, this modification would require the state to pay the entire cost of the voucher and it truly captures the spirit of the money following the child.
If we are to take school choice in Ohio seriously, the state must do something similar to this change. Local school districts cannot be put in a position of having to pass levys to keep up with the cost of vouchers. If the state wants to mandate school choice with their money, I’m all for it, but does anyone really believe that local taxpayer dollars should be used to pay for a private school for your neighbors child?
May 8th, 2008 at 9:34 am
Generally I think we’re on the same page. I’ve written before how the cost per child is a pure fiction, a minor metric elevated to Holy Writ.
And of course having money follow the child is a basic tenet of school choice and indeed good business practice.
Bottom line disagreement, though, is that you think it’s local money doing the job and I do not. I liken your view to the idea of “tax expenditure.” Bureaucrats love the idea of declaring a tax, let’s say 10 percent on a base of $1000, and then valuing the base at 600 or the rate at 6 percent. Then they claim a “tax expenditure” of $400. It’s silly. Why not just declare that 100 percent of the base is taxed at 100 percent, then give everyone a living allowance as a “tax expenditure”? Or be more direct and honest, and simply declare the tax rate as 6 percent. I heard that lament yesterday in a discussion between Bob Hagan and Randy Gardner in Ways and Means. Hagan essentially believes all money is better off the hands of the government and the government is being darned generous with its tax expenditures, and Latta whines that the government isn’t collecting the money and then is shown “spending” the money, aggravating its unhappy tax and spend statistics.
My view is there is no such thing as a tax expenditure, because the government can’t give you money that it doesn’t own, and the claiming of ownership by the government does not accomplish ownership. I admit that’s problematic and we can hash it out another time. But the point is this: Government officials could use this method to claim all income as theirs.
You are doing something similar; you are claiming that your district’s revenue includes, not merely your local funds, but the funds the state gives in addition. If you started with a base point of only your own revenue, the picture is different. Then you’re in a position arguing for a larger state grant based upon whatever factors you want to argue, including ADM or particular needs or whatever.
Your local money is fixed; the state in theory could add zero additional to it. Instead, the state adds, on average, 50 percent (what is it in Worthington? 25 percent?) As you well know, the state runs that number up and down for all kinds of justifications. I’m much less concerned with the silly contortions they go through to get the numbers than what the number is; in the end, it would make sense to greatly simplify the process they use to create the number, because what they are doing now simply cannot correspond to any salient reality of the individual child’s circumstances.
The accounting method of having money flow through the school district seems silly, but since it’s merely an accounting method, I don’t know that in itself it is damaging. (I don’t know the history of it, but I’ve often thought about whether it acts as a protective device in the current situation, where you have a governor who is so hostile to choice. My guess is it was included originally by union and district supporters who wanted to keep control within the existing public structure.)
You’re simply saying the state should pay for the voucher and not reduce the funds it pays to the district. I’m saying the state is paying for the voucher, and it’s choosing to do so by reducing the funds it pays the districts. The ineffectual courts notwithstanding, this isn’t intellectually different than the state reducing funds paid to the district so that it can increase funds paid for Attorney General trips to Turkey.
Where I see us disagreeing is you are focused on a financial need for the schools-it’s hard to pass levies, costs are rising-while I’m focused on the idea that the state share is the state share, and all this gimmicking around about how to calculate that share is is a sideshow. “Here, you get some money from the lottery; here, you get some money from casinos; here, we’ve increased the Phillis Factor from .086 to .092 over three years, which helps districts subject to the inside millage Cordray Guarantee” is all a bunch of silly, distracting mumbo-jumbo that becomes irrelevant, not merely as soon as it’s enacted, but even before they think of the idea.
May 8th, 2008 at 11:21 am
Mike:
Yes, I agree that the formula used for calculating state aid is silly. I agree that the accounting methods should be changed. I agree that many members of the Democratic party and at least two (and maybe three) Presidential candidates believe that money is better off in the hands of the government.
Where we disagree is that your argument is all about theory while mine is based on the pragmatic aspects of the legislation. Our local revenue is more or less fixed and the state gives us back a share of our own income tax in the form of state aid. They are both revenue sources and they are fungible.
If SF57 were to become law, our revenue would be decreased while our expenses, unless we were remarkably lucky, would not be. Because our expenses would not be decreased, we would have no choice but to either cut programs to pay for the vouchers or increase the amount of the next property tax levy. This is really basic arithmetic.
I would prefer your fictional world where we live off our local revenues. If Governor Strickland does away with the state guarantee, it may come to pass since Worthington and other “wealthy” districts get very little from the state but until that day, we have to deal with the pragmatic aspects of legislation and the pragmatic aspect of SB57 is as above.
Rather than reflexively argue that vouchers are good and do not impact local revenues, I really do urge the Buckeye Institue to work at understanding the realities of the state funding formula. The pragmatic result of SB57 is that real taxpayers are paying with real property taxes for the states generosity and that can’t be something that the Buckeye Institute would support.
May 8th, 2008 at 1:06 pm
Well, here’s the nub of it: You say real property owners are paying with real property taxes for the state’s generosity. I say the real property owners are paying the same as they always have, but they’ve chosen a bum partner in the state, which promised them one thing, then cut it back.