How NOT to Think About School Funding - Granite Grok

How NOT to Think About School Funding

I recently heard someone argue that a parent who pulls his child out of a public school to attend a private school should reimburse the district for the adequacy money that the school loses.

Let’s think about that for a minute.

First, consider extending this argument to some other ways in which a child might stop attending a public school.

For example, suppose a child who is attending public school dies.  Should the parents reimburse the district for the loss of income, for the remaining years that the child would have been in school?

Or suppose a child moves out of state as part of a divorce settlement.  Should the parent who stays behind reimburse the district for the loss of income?

Better still, consider potential parents who move into the district, but choose not to have kids.  Should they ‘preimburse’ the district for the adequacy funds that it will never receive, for the kids who will never attend?

It’s kind of ridiculous, isn’t it?  That’s because it’s based on a faulty model of how schools are actually funded.

The district runs a school, and it’s available to kids in the district, whether they use it or not.  The cost of that school isn’t affected by a few kids moving into the district, or moving away.  The marginal cost of adding or subtracting a kid is zero.

(Note that the per-student cost, which is just the total cost of the school divided by the number of students attending, goes down if a new kid shows up, and goes up if a kid leaves.  Which is just one illustration of why per-student cost isn’t a useful number for thinking about anything.)

The cost of the school is affected only if the number of kids is great enough to force substantial changes, like changing the number of teachers employed by the school.  Even the Von Trapp children leaving a public school to attend private schools wouldn’t be enough to force this kind of change.

Second, note that if money isn’t forthcoming from outside the district, the parent is already reimbursing the district through his share of any resulting tax increases. That is, if the district loses any source of income — whether that’s an adequacy grant, or a stabilization grant, or a federal grant, or the closing of a trust fund, or the loss of a benefactor — and doesn’t cut its spending in response, the missing income needs to be recouped from all the property owners in the district.

Third, even if we ignore the foregoing, how much money are we actually talking about?  Note that no district gets the maximum adequacy grant, for reasons explained here.  The per-student grant is only the amount that needs to be made up by a deficit in the amount of money collected via the Statewide Education Property Tax (SWEPT).  In some districts, that will be zero.  In many others, it may be a few hundred dollars or less.

At the same time, the parent is still paying for the school, but by taking his kid out, he’s increasing the share of instructional attention that is available for the other kids who would share classrooms with his kid.

Just to have some numbers to think with, the average teacher salary in NH is about $60,000.  Let’s say a teacher teaches 6 classes, so that’s $10,000 dollars of instructional cost for each of those classes.  (Which is about a hundred times what it needs to be.)

If there are 25 kids in each class, each kid is getting 4 percent of that value, which comes to $400.  If the kid who leaves was taking 6 classes, that’s about $2400 in instructional value that he’s freeing up for other students¹.  Surely the parents ought to be compensated for that, right?

Now, these are just ballpark figures, but the point is this:  The cost of instructional time freed up by a kid who leaves may be more than the per-student adequacy amount received for a kid who stays, in which case the district would end up owing the parents money, rather than the other way around!

So not only is this kind of reimbursement a silly idea, but like many other silly ideas (and like practically every idea in the area of public schooling), if you actually tried to implement it, like as not it would end up having the opposite of its intended effect.

So why bring it up?  Because this is the kind of idea that is considered to be a serious policy proposal by the people who are in charge of figuring out how to fund and operate public schools.  God only knows what other ideas they’re considering as well.  As Holly Golightly might say:  The mind reels.



¹ Doesn’t it make you wonder what the rest of the money is being used for?