Tuesday, January 19, 2010

Special Education Costs Distort Education Cost Comparisons

Yesterday, I provided some detail on our special education budget and presented a chart that shows that the state is planning on continuing to grow the special education mandate deficit--that is the difference between mandatory spending on special education programs and the revenues provided for that purpose.

Today, I want to use that information to explain a common flaw in the approach commonly taken by so-called education pundits at the state and national level, when they try to compare the cost of private or charter education to the cost of a public education. Frequently, I see people taking the total cost of our a district's general fund budget and dividing it by the number of students. Then, they do the same thing for a private school, and compare the two results. Doing that contains a number of fundamental distortions, but the biggest distortion is in failing to account for special education dollars.

In our case the typical approach would be to take our general fund budget, about $88 million, and dividing our number of students into that number and comparing that to the cost of education in private schools or the cost several decades ago. If you just divide the number of students into the total general fund budget, you get a cost of about $9,000 per student. But $18 million of that revenue goes to special education, which the private schools do not have to provide. In addition to that, the $18 million comes with a federal mandate that requires the district to spend $25 million. If you take the $18 million off of the $88 million, you are left with $70 million, leaving you still with an inflated number for purposes of comparison. Why: because you have to take the additional $7 million off of the $70 million, That $7 million must be taken out of the regular education budget and transferred to cover the special education mandate deficit. You can't count that money, because it is being removed from the regular education budget to cover a service that private schools do not provide.

Now you are down to $63 million, which is closer to being an apple to oranges number--about $6300 per student. Now even that number is too high, because it doesn't include a variety of special funds providing services required by law.

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