What does $5,000 get you in Georgia?

Posted on March 9, 2009



This proposal caught my eye the other day… but it took me a few days to round up the relevant data and figures.

http://www.beaconcast.com/articles/20090307

The proposal is to give every kid in Georgia a $5,000 dollar voucher to take to the public or private school of his or her choice. At the time of this blog post, I am currently working on a massive research project compiling the financial statements of private schools (IRS 990) and combining those data with enrollment data for those schools in an attempt to figure out what private schools actually spend per pupil. NOT WHAT THEIR TUITION RATE IS, BUT WHAT THEY SPEND! I’m looking at total expenditures per pupil in a given tax year (2006) and comparing with total expenditures per pupil in public schools in the same labor market (mainly metro areas).

I’m all for any plan that could substantially disrupt the educational disparities that result from racial and socioeconomic segregation in neighborhoods, housing stock, etc. that ultimately dictate who goes to what school, who chooses to teach where and as a result, strongly influences the distribution of schooling quality in ways that contribute substantially to persistence of black-white achievement gaps. Watch this exceptional lecture for a more thorough explanation:

http://www.uark.edu/ua/der/Lecture_Series/Hanushek/Hanushek.html

The first simple critique I have of the current Georgia Senate Bill (SB) 90 proposal is that it fails to provide at least some transportation support/subsidy… which means that choice will be severely limited for lower income families. That’s a serious problem which undermines most if not all good that might come of such a proposal.

But aside from that little problem, let’s take a look at some basic stats on private schooling enrollments, types and per pupil spending in Georgia… to see how this $5,000 voucher stacks up.

Figure 4 (sorry about not including 1 though 3, limited space in the blog) shows that the largest two sectors of private schooling in Georgia are Christian (not Catholic) schools (affiliated with AACS and/or ACIS) and Independent Schools. Actually, the strong presence of independent schools could potentially lessen concerns that most if not all choices made by students and families would result in channeling funds to religious schools. That is, if funding was sufficient for independent schools.

georgia-private-schools

Figure 5 displays the student weighted frequency distribution for independent school per pupil spending in Georgia in 2006 based on IRS filings of 43 independent day schools serving nearly 26,000 students. The minimum expenditure was $9,579, nearly twice the proposed voucher level.

From my most recent data source, there are over 850,00 students in public schools in the Atlanta metro area alone. So, if even 1% of those students wanted to attend even the lowest spending private independent school (8,500), someone would need to cough up and additional $38,921,500 to cover the gap in annual costs (ignoring the capital expense of taking on an additional 8,500 students). If 1% of students in the Atlanta metro area attended the average (statewide mean, Atlanta mean even higher) independent school, at a gap of $10,061, someone would have to cough up an additional $85,518,500. So much for the big savings from vouchers here. If state government is saving, then it’s only because someone else is forced to pick up the tab.

Private Independent School per Pupil Expenditures in Georgia

Private Independent School per Pupil Expenditures in Georgia

Okay… so lets assume instead that 1% of Atlanta area children shift over to Christian schools. Surely they must be a lot cheaper than the public schools. Everyone… I mean everyone knows and fully accepts the conventional wisdom that private schools spend a whole lot less than public schools… and of course… get much better results… right?

Figure 6 shows the distribution of per pupil spending for Christian schools from IRS filings of 36 Christian schools statewide in Georgia, serving 13,777 students. My IRS filing rate is lower here than for independent schools for two reasons. Many formally religiously affiliated schools don’t file IRS 990. Second, I eliminated from my data, schools with expenditure budgets smaller than $500,000 (mostly really tiny schools, some start-up, some dying out). Figure 6 shows that there are some Christian schools that show spending levels below 5,000 (about 8 schools). But still, the enrollment weighted average is nearly $8,000, meaning that a 1% shift in Atlanta metro public school students to “average” private Christian schools would still require $25,500,000 to come from somewhere.

Perhaps some rethinking of Senate Bill (SB) 90 is in order.

Christian School per Pupil Expenditures in Georgia

Christian School per Pupil Expenditures in Georgia

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