Monday, January 23, 2006

Not As Easy As It Looks

Owen over at "Boots and Sabers" lays out the proposal by Democrats on expanding school vouchers in Milwaukee. He takes particular issue with the "Hold Harmless" provision in the proposal. Current law states that MPS must pay for 45% of the voucher program through deductions in state aid. The provision in the current Democratic proposal would allow MPS to recoup the money it loses in state aid by allowing the district to count 0.45 FTE of those students enrolled in the voucher program when calculating state aid (phased in over five years).

Owen, however, claims that this provision would not only allow MPS to recoup its loses, but that it also would provide MPS a means for making extra money above and beyond what it loses in state aid to the voucher program. To demonstrate, Owen lays out the following simple scenario:

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"Let’s do the math. If 10,000 kids go to a choice school, MPS pays 45% of the cost. The cost per kid is about $6,500. So, MPS pays $6,500 x 0.45 x 10,000 = $29,250,000.

Under this bill, 45% of those kids would be counted for enrollment purposes. The state pays MPS about $8,400 per kid in equalization aid. So, under this bill, the state would pay MPS 10,000 x 0.45 x $8,400 = $37,800,000.

As you can see, this bill would give MPS $8,550,000 in additional revenue for kids that it does not have to educate. It’s a ripoff."

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Owen's misstatement of how much state aid MPS receives per student aside (the figure was actually $6507.81 per student in 2005-2006, according to what I'll call state record #1 found here...scroll down to page 28 for MPS), the oversimplified example he provides does not even start to explain how the Democratic proposal would actually work in practice.


In reality, the Democratic proposal allows MPS to add 0.45 x the total number of voucher students (in FTE) to their total "Aid Membership" that is then factored into the very complex calculation the state uses for determining state aid to school districts (see details here). In order to get an accurate picture of how much money MPS would ultimately gain out of the Democratic proposal, you would need to start with the new "Membership Aid" figure and work your way through calculating the primary, secondary, and tertiary aid amounts MPS would be entitled to under the new number of students its claiming. It's not as simple as multiplying the number of voucher students by 0.45 and then multiplying that figure by the amount of state aid MPS receives per student because the amount of state aid changes when MPS is allowed to add 45% of the voucher students to its total "Membership Aid."

According to what we'll call state record #2 found here, the total number of voucher students in 2005-2006 is 14,751 FTE. We could take a hypothetical situation that assumes the Democratic proposal passed five years ago and we are now at the point when MPS is able to calculate the full 0.45 FTE from the voucher program into its "Aid Membership." By multiplying 14,751 by 0.45 (and rounding up for simplicity) we find that we could add 6638 FTE to the "Aid Membership" for MPS. The "Aid Membership" before this addition was 96,874 (figure A7 on page 28 of state record #1), thus making the new "Aid Membership" figure 103,512.

Now all we need to do is run the new "Aid Membership" figure of 103,512 through the gauntlet of calculations to get the new state aid amount provided to MPS under the Democratic proposal. I could give this a shot later, but whatever amount I come up with will only be the best a history major can do using the formulas provided next to each line in state record #1. If one of the fixed numbers happens to change, let's say, with the rise in "Aid Membership," my calculations will be off. In other words, without understanding how the calculations process is intended to work in addition to knowing the actual formulas, there is much room for human error. The only people I would truly trust to figure this out are those who do it officially for the state. If we have any who read this blog, please help us out by commenting on this post.

As for the rest of us, our time as political commentators is probably best spent debating the broader intent and potential effects of the Democratic and Republican proposals. Unless you are very confident in your math skills and--like a good math student--can show your work through the state aid calculation gauntlet, let's leave the number crunching to the pros. Oversimplification (e.g., one-line calculations) and speculation (e.g., MPS is making money off the Democratic proposal) on truly complex numbers only leads to misinformation and thereby does a disservice to the public debate on this issue.

UPDATE: I contacted the DPI to get a professional explanation of what the result would be if the Democratic proposal went through. I'll put up another post on the topic if I get a response.

1 Comments:

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February 14, 2006  

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