February 21, 2010

Jon East responds on corporate tax-credit voucher expansion (HB 1009)

Jon East, a former reporter for the St. Petersburg Times and now Research and Communications Director at the corporate tax-credit voucher non-profit Step Up for Students, was unable to put the following long response in comments to my discussion of HB 1009, and when he e-mailed them to me, I agreed to post them here:

As always, my friend, you offer a provocative commentary and I appreciate your recognition that this bill adds two new mechanisms of accountability even if they don't go far enough for you. Please allow me to probe two different claims you made here, though, because I don't think they present the clearest picture.

First, the assertion that the bill "expands the dollar amount per voucher from the state beyond what the state gives local school districts" feels a little like it was intended to obfuscate. Any general assessment of cost should probably begin with the fact that this option is now and would continue to be the lowest-cost education option in Florida -- lower than traditional public schools, charter schools, McKay scholarships, even virtual instruction programs. That aside, the amount the state "gives local school districts" is controlled by a 1973 law that essentially puts all the money for the base funding formula, called the Florida Education Finance Program, into one pot. As we know, the state has been putting less money into the formula while increasing the amount of "required local effort" for property taxpayers. But the larger point is that the FEFP is intended to make funding more equitable, with the breakdown between state and local portions varying county by county according to the size of their property tax base. To then turn around and compare the state portion as though it is some isolated variable in school funding seems contrived. The bill would place the scholarship at a 20 percent discount on this FEFP formula, and the FEFP is only part of the overall revenue picture for schools. By way of comparison, the per-student FEFP in 2007-08 was $7,143. The total revenues per student, including state, local, federal and capital, that same year (this is the most recent one DOE has published) was $11,017. So back to your point: The bill would indeed increase the scholarship amount up to 80 percent of FEFP. But if it took effect all in one year instead of four and it took effect today, the scholarship would translate to $5,490 -- which is almost precisely half the total per-student spending in public schools.

Second, your concerns about the "elimination of the cap" take a little liberty with the wording of the bill and a little more license with the current marketplace. The bill absolutely eases the process of increasing the cap, but one fact worth noting is that this would still be the only major education option with any cap at all. There are no caps for charter schools, McKay scholarships, virtual schools. And the McKay scholarship, as one example, grew only about 3 percent last year. The controlling factor for any school option is ultimately the students. If students and families aren't interested then the program doesn't grow.

In e-mail correspondence, East made clear that when he was discussing the Florida Education Finance Program, he was combining the state, local, and federal sources, and that HB 1009 also was discussing a voucher of eventually 80% of the combined state and local (but not federal) funding. From one perspective East is correct: the legislature sets the amount of funding that comes in total from the state's general revenues, from state trust funds, and from "required local effort" property taxes at the local level, and then a complex formula determines what the required local effort is from each county. Counties have a certain amount of additional property taxes they can levy on a discretionary basis, but FEFP is a unitary mandate in the sense that the legislature determines the base funding for students, and that legislative mandate is met jointly by state revenue and local property taxes.

On the other hand, I think that legislative history will be cold comfort to local school board members and county commissioners who have seen the state shift school funding in the past decade away from state revenues and towards local property taxes. That use of FEFP to shift taxes allowed former Governor Jeb Bush and the Bush-era legislative leadership to claim that they were lowering taxes when a good part of that was a clever shell game. (This is not a particularly partisan flaw: the Democratically-controlled legislature played a similar game in proposing a state lottery in the late 1980s which legislators claimed would boost education funding without raising taxes.) Many school board members will see HB 1009 as a drain of state revenues that will contribute to the shifting of education funding away from the state and towards local property taxes. When the legislature created FEFP in the early 1970s, they quickly ramped up per-pupil state support of education, effectively shifting the revenues from local property taxes to the state's general revenue pot. HB 1009 looks like it will continue a reversal of that original intent.

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Posted in Education policy on February 21, 2010 3:20 PM |