School Choice in Utah?

Utah could be getting a reasonably serious school choice program.  In Friedman’s vision it is students that are funded not schools and students are funded equally regardless of where they choose to attend school – i.e. no fiscal discrimination.  In the Utah plan, in contrast, the voucher money is still less than is spent per public school student and it is means tested.  Nevetheless, the voucher is reasonably large and the program is state wide which together would make it the most significant voucher experiment in the United States.

Thanks to Fred Hastings for the pointer.


So in your dream scheme how do you deal with the de facto subsidization of education that comes from the people who already have children in private schools pre-voucher? Will you raise taxes or reduce the funding per-child for education? Does the fact that many private schools are subsidized in ways that aren't generally available to public schools (e.g., parish funds going towards the parochial school, alumni contributions etc.) change your view about how the per-child funding should be distributed?

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don Hosek,

This can all play out in a much simpler way than you think. The way I understand it is through the analogy of food stamps. You get some allotment that you can spend at any store, which would probably be a for-profit private grocery store, but doesn't have to be (I suppose there could be government run stores, but it seems silly to think of a government run grocery store). Grocery stores compete for your dollars by offering what you want at the prices you want.

So, you take all of the money the public spends on education a slice it by how many students you have and create "education stamps," like a food stamps. This is a ridiculous amount of money per student by the way (simple arithmetic: 25 students * 10-15k per student = $250-375k†¦25 students to a teacher, pay him/her $100k! and you still have a lot left over for other administrative costs and profit). The government can auction off all of its school buildings too. Schools pop up to try to grab a piece of all this money and compete away the profits by offering customers what they want, be it religious, non-religious, trade schools, college prep†¦all sorts of choices I’m sure. Parents choose the school that is best for their kid like they choose the food that is best for them at the grocery store. If they choose to spend more than the stamp, then they can do so. To appease the paternalists, the government can still have minimal standards to meet, which we are quite familiar with our food.

I may be oversimplifying this a bit; but, it doesn’t seem all THAT complicated. Right now, we have the equivalent of one government run grocery store in each district, which offers basically one product. Hence, there is no choice other than expensive private schools (which you pay in addition to your taxes). And, the quality is probably a lot lower than it should be, as with any monopoly. Profit and competition drive grocery stores to be the best in the world, attracting bright minds/talent who bring innovative spirit and deliver what the customers want.

I think, if nothing else, it would be fascinating to see how this would all play out if a state had the stones to do all this. GO UTAH!

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Excellent news!

At one point, I started to build a spreadsheet arguing for vouchers. It tries to convey that a voucher can be set at below the variable cost of an additional student, thus each voucher used increases the funds available per public school student.

The work-in-progress is posted here (or on the url link):
Any feedback is welcome, and I'd be glad to provide write-ability for anybody interested in furthering the analysis.

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It kind of already works this way in Michigan -- the funding comes from the state on a per-student basis, and many districts have opened themselves to outside students (and the funding that comes with them). And charter schools are included in the system as well. But funding of charter schools is really not equal after all, since what the state provides are operating funds, not capital. Local school districts, of course, already have huge reserves of capital in the form of land and buildings and are still permitted to float bonds for school construction and other major capital expenditures (building upgrades, purchases of computers, etc), which means the local public school districts still have a major financial advantage over charters. And private and parochial schools aren't included at all.

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If it is true that states wildly overspend on education isn't the disparity a potentially good thing?

If private schools can successfully educate a child (or, indeed provide superior education) for a fraction of the cost it would show quite convincingly that the problem with schools today isn't, in fact, lack of money.

My concerns about vouchers have always been that it would lock in school pricing too high - by "underfunding" vouchers they defeat this problem before it has a chance to materialize.

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What about expensive-to-educate kids? No voucher school is going to want to take a kid with Asperger's, or some other disability that requires the kid to have an aide. So doesn't that mean that the voucher schools can skim off the cheap-to-educate normal or bright kids, leaving the disabled kids in bad, underfunded schools?

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Presumably, students with serious health or learning problems would receive more valuable vouchers.

That would be nice, but no voucher plan I've ever seen has that feature. Do you know of any that do? Does the Utah plan offer better vouchers for disabled kids?

Another way to get around the problem would be to require any school that accepts vouchers to accept any student who applies (in the right age range, of the right gender if it's a single gender school). If there were too many applicants, the school would have to have a lottery-- younger brothers and sisters could be given priority because parents like to have all the siblings in one school.

Otherwise schools that accept vouchers could skim off the cream, leaving, again, the harder-to-educate kids no one wants to the public schools.

Here and here are a couple of popular press articles about the education costs of autism and Asperger's. The short version: it costs a fortune to educate a kid on the autism spectrum.

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Bob, you misunderstand the idea of vouchers. Vouchers are not a good idea because private education is better than public education. The idea is that education is like any other industry, competition will make the industry better. First, it will make schools respond to students and parents instead of taking their presence for granted. Second, it should allow for differentiation among schools. Some can specialize in math/science, others in arts. Some can allow prayer in schools and call it Christmas break, others can teach sex ed to 6 year olds. And people can stop complaining about being the victim of the majority because they can change schools to fit their desires.

Also competition will lead to more accountability. If a school is failing, it will be much more noticeable. Either people will be fired or the school will cease to have students. No more day cares where students don't learn.

But the main thing to remember is that the gains from school choice are not from the actual switching from one school to another. The gains are from the incentives this gives to schools, principals, and teachers. Schools have to respond to problems and fix them or else they will lose students and money. The more the competition, the bigger the effect. That's why this universal system is so important from a Friedman perspective.

It's also why the small means-tested programs in some cities theoretically shouldn't work nearly as well as a universal system. The small programs rely on the actual switch making a big difference. A universal system should improve public schools and that is better for everyone.

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What I said about money is that schools that have what I consider to be the best results cost a lot to run. They are all private schools. Andover, Exeter, St Andrew's, Gulliver, Choate et cetera all cost over seventeen thousand a year. It can't be done cheaply because the professors all teach inside their specialty and have advanced degrees from decent universities. "Dumping" money into these schools seems to work quite well. On the other hand, legislatures have demonstrably not responded generously (in my state) where the average budget per student is under six thousand dollars a year. Are you aware of a state where legislators have pumped up the budget to over ten thousand dollars a student basic without counting special programs?

These private schools have always operated in a highly competitive environment. This is where you can examine the experiment of competition in K-12 education. Of course, the same is true for post-secondary schools in the ivy league. Does anybody know of a school where tuition doesn't out-pace inflation?

The schools get highly stratified as a result. In the Baltimore area where private corporations have been running some schools, the results have been uniformly poor. I don't know why.

I do understand the idea behind vouchers. What I don't agree with is that the stated benefits can be predicted accurately.

There is a lot of talk that conflates untested ideas with results seen in places where the characteristic (competition) and result (smart kids) are very loosely coupled. Close examination of a high performing school discloses a host of contributing factors that people consider unimportant because it doesn't fit into their emotional agenda.

The system people are messing with is a complex one where poking it in one place will cause unexpected results. I can guarantee you won't get what you expect. I also believe the example of private school competition proves that it doesn't drive costs down. I limit my sample to schools with average SAT scores over 600-650 per section. When you talk about results you have to talk about specific results and I have standards.

What we don't need is Utah being dishonest like Texas. The problem is that although people *say* it is OK to experiment, the penalty for failure is not something you want to happen, so the states lie a lot. Take Florida for instance. This summer the fourth graders improved a whole standard deviation over last year. Impossible? Yes. In fact they kept enough low performing kids back to achieve the effect. It made Jeb Bush's education package sound like it had worked and helped elect a bunch of Republicans.

If you hitch your wagon to a politician who wants to get your vote and says vouchers will solve the problem, you are just asking for disappointment because the problem is huge and complex. BTW, Paul Ormerod is my favorite economist, not Freidman. The core of my argument is taken from his work on complexity.

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Several of the comments above mention that the writers don't know whether the Utah bill includes some feature or other. So I thought I'd pass on this link to the actual bill. It's an easier read than you might think.

I'm also interested in seeing some of the econometrics work on this just mentioned. When I interned at the Utah state legislature a few years ago, proponents of a similar bill tried to sell it by arguing that since the voucher was for less than the average cost of educating a Utah student, it would actually leave a public school better off financially if a voucher student transferred to a private school. Can you spot their mistake? They ignored the concept of marginal costs. I love the idea of vouchers, but I'll stay very skeptical of claims that they leave public schools better off until I see an analysis showing that they leave more money in the public school than it would otherwise actually take to educate the students that leave.

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People who have handicapped kids would be able to force the public school system to educate thier children.It is part of the federl disabilities act.I think eventually the poor and immigrant and disabled will be in the public schools.Anyone who can afford it will jump ship snd leave the public school system with thier vouchers and the students.Looks like the US is on its way to becoming like Great Britton, A caste society.

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thank you very much

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