To raise Oklahoma per-pupil funding, use school vouchers

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Mickey Hepner, Professor of Economics at the University of Central Oklahoma, suggests one way to raise per-pupil school funding, other than raising taxes or cutting non-education spending: Offer vouchers to encourage parents to put their children in private schools.

In 2008-2009 Oklahoma education funding averaged $8,006 per student. This figure though, is based only on the number of students enrolled in public schools. If Oklahoma was able to shift more students from public to private schools, state funding would be spread out over fewer students, thereby raising the per-pupil average. Of course, the only way to shift large numbers of students from public to private schools is to help pay for private school tuition...a cost that offsets some of the gains. However, if structured correctly, a voucher system could still generate cost-savings for the state, allowing it to raise per-pupil spending.

For example, last year I proposed my own school voucher program for Oklahoma--one that would provide a $3,000 tuition scholarship for every K-12 student attending an accredited private school. To pay for the scholarships, each school district would see their allocations fall by $3,000 for every student they lose to a private school. This means though, that the remaining $5,006 can be redistributed to the remaining students enrolled in the public school. Essentially, this program allows schools to outsource the education of some students (to the private schools) to free up more resources for the remaining public school students.

Interesting way to look at vouchers -- outsourcing education, much as we do with government functions like road construction.

Do read his entire piece, for the context (what if SQ 744 passes?) and some qualifiers (e.g., $3,000 may not be the optimal voucher amount).

Via Brandon Dutcher at Choice Remarks, who offers an amendment to Hepner's proposal:

My only suggestion would be to phrase it this way: "they should embrace a school voucher or tax credit program." There's nothing wrong with vouchers, of course, but until Oklahoma can solve its Blaine Amendment problem (preferably through repeal), tax credits are going to be a much cleaner way to go.

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Anna said:

Back in April, one of the principals at Broken Arrow High School told my sister (a first-year teacher that he was laying off) that the school was seeking an exemption from the state rules on teacher-to-student ratio. They simply did not have the money to pay for the number of teachers those rules require. I have not heard anything about it since then, but outsourcing education through vouchers would help this problem, too. Despite Nancy Pelosi's best efforts, there are a large number of teachers looking for work, so private schools will not be drawing teachers away from the public schools.

XonOFF said:

How about we put all students in private school (at $3K/student) and eliminate $5K of costs? That would save taxpayers over 60% and get better student outcome.

Educators, who 'do it for the children' would support this, I'm sure.

David Thayer Author Profile Page said:

According to Mr Hepner's article we have per pupil funding available in the amount of $8,006. He stated that this figure is based on the number of pupils enrolled in public schools. He then says that we could give $3,000 of these dollars as a tution scholarship for a student to attend a charter school and still retain $5,006 for public education spending. We lose a student but still retain the $8,006 dollars less the $3,000. How does this work?

It's a simple matter of ratios. If you reduce the denominator (number of students) by a greater proportion than the numerator (amount of money to spend), the ratio ($ per pupil) will increase. In this case, a 10% reduction in the denominator results in only a 3.75% reduction in the numerator.

The $8,006 is calculated from the total amount we spend on education divided by the number of students. For the sake of easy calculation, let's suppose there are 1,000,000 public school students, and let's round the average to $8,000. That would mean $8 billion spent divided by 1 milliion students. So suppose 100,000 students opt for the tuition scholarship. That reduces the number of students by 100,000 and the amount of money by $300 million. That would leave government with $7.7 billion to educate 900,000 students, an average of $8,555. That amounts to a 7% increase in per pupil spending.

If half the students opt for the voucher, you'd have $6.5 billion left to educate 500,000 students, $13,000 per pupil, an increase of 62.5%.

To take it the example to extremes: Let's suppose 999,999 students take advantage of the $3,000 vouchers. The government would still have a pool of $5,000,003,000 to educate the one remaining public school student, an 62 million percent increase in per pupil spending.

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This page contains a single entry by Michael Bates published on August 16, 2010 12:08 PM.

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