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New Fiscal Impact Study Reinforces Benefits of Dougco Choice Scholarship Program

The Friedman Foundation for Educational Choice has released an interesting new study titled “The Fiscal Effects of School Choice Programs on Public School Districts.” Author Benjamin Scafidi took a state-by-state look at total per-pupil spending, breaking out the fixed costs from the variable costs.

Here’s the basic idea. Take a state’s K-12 “expenditures on capital, interest, general administration, school administration, operations and maintenance, transportation, and ‘other’ support services” and set them to one side. Subtract these “fixed costs in the short run” — as Scafidi conservatively considers them — from the total spending.

What’s left over are the expenditures tied more closely to actual enrollment, which districts have shown can be easily reduced when numbers of students leave. A voucher or tax credit given to student up to that amount safely can be considered not to have any fiscal harm on the district.

On a national scale Scafidi finds:

The United States’ average spending per student was $12,450 in 2008-09. I estimate that 36 percent of these costs can be considered fixed costs in the short run. The remaining 64 percent, or $7,967 per student, are found to be variable costs, or costs that change with student enrollment. The implication of this finding is that a school choice program where less than $7,967 per student is redirected from a child’s former public school to another school of his or her parents’ choosing would actually improve the fiscal health of the average public school district. And, it would provide more resources for students who remain in public schools.

But what about in Colorado?

Using national numbers that look a little low compared to our state education department’s latest revenue and expenditure data, Scafidi breaks it out as follows:

  • Colorado spent $10,669 per pupil in 2008-09;
  • Short-run fixed costs come to $4,370, or 41 percent of the total;
  • $6,299, or 59 percent, is left as the safe cap for a voucher amount with no fiscal harm to the departed school district.

As is well known, Colorado has no statewide voucher or tax credit program. But the groundbreaking Douglas County Pilot Choice Scholarship Program was designed to allot three-fourths of Per Pupil Revenue (PPR) to students for private school partner tuition. In 2011-12, that “voucher” amount would have been $4,644 — if the program had not been enjoined by a Denver District Court judge.

Dougco comes in a little below the state average on overall K-12 funding, which means the Choice Scholarship Program is not close to representing any sort of negative fiscal impact to the school district. In fact, it means more money on a per-student basis, a boon in challenging budget times. It’s good to see that point clearly reinforced by Scafidi’s analysis.

Then again, it doesn’t hurt to remember that our first concern should be for the benefit of students. Of course, it’s all hypothetical for now. Hopefully that soon will change.