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Following up on $7,500 per student in FY2008

We’ve received some questions about our $7,500 per Utah K-12 student spending estimate for FY2008. Click here to see the original post. Here are our answers to the questions we’ve received.

Does your $7,500 estimate include “one-time” money?
Yes it does, as it should. Those who want to minimize the amount taxpayers spend per student try to exclude all sorts of things, such as facility construction, interest, “below the line” items such as Social Security, Medicare, retirement, block grants etc. Now, some want to exclude so-called “one-time” expenditures.

Here’s why one-time expenditures should be included

- One-time expenditures are still expenditures of tax dollars. These are real tax dollars, not pretend tax dollars.

- One-time expenditures will be replaced in succeeding years by additional one-time revenues or by ongoing revenues.

- To exclude one-time expenditures would be to assume that per student spending will be DECREASING in FY2009 because the one-time money would not be replaced. History strongly indicates that FY2009 spending per student – which will also include one-time funds -- will be even higher than FY2008. Only once in the past twenty years has nominal per student spending decreased from one year to the next.

- If these one-time expenditures had been diverted to higher education which would have then diverted general funding to transportation, then the opposition would not be dismissing these expenditures as “one-time”.

- One-time expenditures in the Minimum School Program are less than 4% of estimated school district expenditures in FY2008. Therefore to reach $7,500 per student in FY2009, the legislature would have to add an additional 3% for enrollment growth and 4% to replace one-time funding.

- All budgets have one-time money. A lot of the current one-time money is from budget surpluses, and these budget surpluses are the result of conservative revenue estimates by the state. If the state were less conservative in estimating revenue, then a lot of the one-time money in the FY2008 budget would automatically become ongoing money. During recessions, one-time money comes from transfers from the Rainy Day Fund and the “working” Rainy Day Fund (cash for capital projects).

What about federal money?
Our estimate includes federal money, as it should. Afterall, Utahns pay federal taxes just like everyone else. A voucher program that results in educating students at a lower cost to federal taxpayers makes sense just as a voucher program that educates students at a lower cost to state and local taxpayers.

Besides, most federal dollars are driven by poverty levels. Therefore, if voucher opponents are going to argue that vouchers are going to result in “loss” of federal dollars, then they must be assuming that low income students will be using vouchers. Besides, federal dollars for K-12 education are generally allocated to the states based on Census Bureau poverty levels.

What about adult education?
No, our estimate does not include adult education or fund 23 expenditures. Even though these are tax dollars, this would not be an appropriate inclusion in the voucher debate.

In the context of the voucher debate, how much of these costs are variable?
Considering that Utah’s enrollment is expected to grow 3% annually, virtually all K-12 costs are variable. There are no fixed costs associated with teachers that have not yet been hired, buildings that have not yet been built, or equipment that has not yet been purchased. Even districts that have experienced declining enrollment have demonstrated that costs are largely variable by redrawing school boundaries. They can also convert underused traditional district schools to charter schools.