Tuesday, February 16, 2016

Robin Vos' proposed amendment to choice funding formula would not "gut" public schools

A current legislative proposal, introduced by Speaker Robin Vos,  to change the funding mechanism for the statewide school voucher program have been widely mischaracterized. For example, a recent article in the Journal Sentinel suggests the "districts with voucher students face a funding cut" and that proposed funding mechanism for the statewide (not Milwaukee) voucher program could "cost" districts with voucher students (other than Milwaukee) $ 22 million dollars next year. An article yesterday said that, under existing law, districts are allowed to simply "recoup" the funds they lose due to participation of students in the choice program.

It's true that current law permits districts to recoup reductions in state aid to pay for vouchers for children a district no longer educates, but it isn't the whole story. And, under the Vos amendment, districts would still be able to recoup aid reduction..

Let's start with existing law. Although the districts may recoup the reduction in state aid attributable to a student departing for a private school, whether that reduction amounts to a "loss" depends on the circumstances.  But many districts are doing much more than "recouping" what they have lost in state aid.

Last June, my organization released a report concerning the contemplated statewide expansion of school choice. We pointed out that changes in the way that vouchers were funded statewide could create a "school choice bonus" for districts with students departing for private schools. This, we explained, was because districts could continue to count departing students for purposes of their revenue limit and state aid. State aid, in turn, would only be reduced by the amount of the voucher. Because this will invariably be less than the revenue limit, districts could receive a combination of state aid and local property tax revenue greater for each departing student than the amount by which their state aid would be reduced. Thus, while districts receive less total revenue, their revenue per student would - in almost all - if not all - instances, increase.

Apparently some legislators believed that the funding formula as passed would permit districts to tax only to the extent of their lost revenue per departing student or that, in any event, districts would not levy up to the revenue limit for students that they no longer educated. But that's not what has happened.  According to the non-partisan Legislative Fiscal Bureau, most school districts, which have children in the voucher program, have helped themselves to the school choice "bonus" that we predicted and then had the temerity to "blame" the voucher program for the excess taxes that they chose to impose. The MacIver Institute highlights this issue.

The question is this: Should school districts be able to continue to receive state aid and levy taxes for students that they no longer must educate even if the sum of state aid and taxes exceeds the amount of revenue they lose for each departing student? Districts are not simply "recouping" lost funds. Those who choose to tax to the extent of their revenue limit are making up for what they have lost and then some.

At very low levels of participation, it is possible that the savings attributable to departing students will be less than the voucher amount (and lost revenue) for those students. The impact won't be large but it may make sense - both for the school districts and taxpayer equity (it is not clear why there should not be a local component of voucher funding) to allow districts to recover some or all of the portion of their lost revenue. Of course, at higher levels of participation, a well managed district ought to be able to offset revenue losses because marginal costs should become closer to average costs and the aid reduction will always be substantially less than the average cost per student.

In any event, the amendment to the law proposed by Speaker Vos would only change the timing of this school choice "bonus." Rather than allow school districts to count all choice students (kids that a district no longer educates) for purposes of state aid and taxing authority immediately, it "phases" in the counting of these students as would be the case if these were new students (and phases them "out" after they no longer attend a private school within the district). In other words, the Vos amendment only changes the timing of the school choice "bonus."

The public narrative has been that current law simply drains the public schools and the amendment would make it worse. It's not that simple.

Cross posted at Purple Wisconsin.


Anonymous said...

Your analysis ignores the fact that 70+% of the kids entering the voucher program are not moving from a public school to a voucher school. They are already in the voucher school and are merely switching the tuition-payer to the local school district.

You imply that adding them to the public school membership count for a voucher student's first year represents a windfall for the district, since the levy limit amount per child is greater than the voucher payment.

That's not the case with a student already in the voucher program. When a district's membership increases, the increase in "count" is phased in over three years. In other words, a district may only be permitted to levy for 1/3 of the cost of the student but must lay out $7000+ for each student. This is a revenue loss to the district.

You speak authoritatively about what is in the Speaker's amendment. The amendment the Speaker shopped in committee has been dumped, according to press reports. With the bill being voted upon tomorrow in the Assembly, hopefully the shroud will be lifted from the revised amendment so that it can be vetted before it is adopted.

Assembly Bill 751 deals with technical fixes for the special education voucher program, while the first two versions of the amendment deal with open enrollment. The Speaker's amendment isn't even remotely germane to the original bill under the rules of the Assembly. Vastly expanding the bill at the last minute at the whim of the presiding officer sets a very dangerous precedent, as it eviscerates the rule of law. Surely a conservative such as yourself should see the follow in such a course.

Rick Esenberg said...

I think the notion that 70% of voucher students will already be in private schools as the program expands is unlikely. If eligibility remains at poverty level, I just don't think that there are that many poor kids on scholarship. And if there are, I have not heard the Democrats in this state often admit that they don't want to support private outreach to the poor. I've never heard, for example, that food aid or expanded subsidies for medical care need to be discounted in some way because it displaces - or augments - private charity.

But putting that aside, a bump in the revenue limit will still leave districts richer than they were and this will be even more true if the kids were never in the district to begin with. To be sure, the Vos amendment may phase in the bonus but just as the hit comes up front, the loss of the revenue trails the loss of that hit.

I can only comment on what has been discussed in the press and I think that discussion has been incomplete. As for the rules of the Assembly, I'm not sure they rise to the level of the rule of law but they are important. But that wasn't the issue I was addressing. If, however, I wanted to rail against non-germane amendments, I think I'd need to hire more help, wouldn't I?

Anonymous said...

You seem to be in violation of copyright law over on Right WI. It's highly unlikely either you or the Rt WI folks took that photo of WC Fields, or have any legal right to it. Much more likely you grabbed it off the Internet like ignorant people who aren't big deal law professors. Theoretically you would know better, but then again (like some of your pals) you may only obey the laws you find personally convenient.

Rick Esenberg said...

I think you better take a closer look at the picture. It's not WC Fields. Beyond that, your complaint should be directed to RW. I don't publish that website or place images on it. I sell them articles. I don't "grab" their images off of the internet or otherwise decide or participate on what images they post. So ask them. My guess - giving that RW is run by one of the largest media conglomerated in the country - that you will turn out to be wrong. You see, some images are in the public domain. Others can be licensed. In this case, the photograph - if it was taken before July 1 1945 - which (given the reason for the photograph) I suspect it was - then it was almost certainly in the public domain. I could explain why but since I didn't choose it or publish it, the question is not for me.