20230425 UFA plan-V11

 

 

Advance response to RFP concerning Utah Fits All program manager contract

 

 

 

Here is my plan in a nutshell:

 

 

General rule:

At the minimum administrative cost, supply the maximum in scholarship funds to the maximum number of individual students, allowing everyone concerned to quickly learn the benefits and problems of this new program.

 

HB 215 assumes that the first year of operation will have a budget of $1 million, and the second year of operation will have a budget of $42.5 million.

 

I propose spending $700,000 from the first year of operation to deliver actual scholarships to students. That would leave $300,000 to spend on staffing and research. I believe it is crucial to begin the scholarship-granting process as soon as possible so that administrators can learn how people react, and the public can learn how to use this program, mostly by seeing examples. Spending one year in an ivory tower thinktank mode seems like a suboptimal use of time and money. It seems more fruitful to spend administrative resources reacting to real challenges in real-time as opposed to trying to anticipate theoretical challenges. Administrative and computer software changes can be made very quickly in our time so that only a few days are required to react to most needs as they are clearly identified.

 

The critical social parameters need to be explored as soon as possible, involving a necessarily small pilot group of people, while learning many practical lessons, so that the second year can be done more correctly and with more confidence. In the event that more years beyond year two are funded by the legislature, perhaps at higher funding levels, then there will be an excellent basis to anticipate and evaluate the costs, benefits, and problems of the program.

 

For the second year of operation, I would assume that $600,000 would be an appropriate administrative cost expectation, leaving a full $41.9 million to devote to actual scholarships. The $2.5 million seemingly reserved for administration seems overly generous at this point, and more should be planned for use as scholarships.

 

During year one I would propose to supply a total of 197 scholarships to that many students, devoting $140,000 to each of five different groups of students, where one group receives one day of schooling per week, another group receives two days of schooling a week, and so on through five days of schooling a week. This will explore many of the possible uses of the scholarship money, and the various possible reactions and outcomes.

 

Somewhat similarly, during year two I would propose to supply 156 scholarships to that many students in each of the 75 districts of the House of Representatives, for a total of 11,959 students statewide. In this case, $8.38 million would be devoted to each of five different groups of students, distributed statewide, where one group receives one day of schooling per week, another group receives two days of schooling a week, and so on through five days of schooling a week. This means that $558,667 would be delivered to the citizens of each of the 75 different districts of the House of Representatives. The 75 district representatives would be invited to participate in the student and family selection process, if they wish to.

 

   

Year 1 Funding Plan  (Year total student funding $700.000) ($1 million allocated, minus $300,000 for administration costs)
Days of classes per student		Total Funding	Per student	Calculated Students		Actual Students
1 day per week		140,000	1,600	87.50		87
2 days a week		140,000	3,200	43.75		43
3 days a week		140,000	4,800	29.17		29
4 days a week		140,000	6,400	21.88		21
5 days a week		140,000	8,000	17.50		17
		$700,000		199.79		197

 

 

Year 2 Funding Plan  (Year total student funding $41,900.000) ($42.5 million allocated, minus $600,000 for administration costs)
Days of classes Per student		Total Funding	Per student	Calculated Students/category	Calculated Students per district	Actual Students per district
1 day per week		8,380,000	1,600	5,237.50	69.83333	69
2 days a week		8,380,000	3,200	2,618.75	34.91667	34
3 days a week		8,380,000	4,800	1,745.83	23.27778	23
4 days a week		8,380,000	6,400	1,309.38	17.45833	17
5 days a week		8,380,000	8,000	1,047.50	13.96667	13
		41,900,000		11,958.96	159.4528	156
$558,667	per district
11,959 students, statewide

 

 

=====================================================================

 

That completes the overview, but I presume that still leaves a host of questions to be answered about all the philosophical and practical matters involved. Some of them will be answered below:

 

 

 

 

Other Topics and Issues

 

1. Staffing expectations

The general goal is to keep down the administration costs so that the actual scholarships distributed can be maximized, especially during year one.

 

For the first year of operation, I would budget $300,000 for staffing. That would be spent on 6 FTE positions at $50,000 each. Most likely that would mean 3 full-time positions and 3 FTE in part-time positions which might be distributed among three or six or even nine different people

 

For the second year of operation, I would budget $600,000 for staffing. That would be spent on 12 FTE positions at $50,000 each. Most likely that would mean 6 full-time positions and 6 FTE in part-time positions which might be distributed among from 6 to 18 different people.

 

There is even a possibility that some of the voluminous staff work could be done by volunteers, since voluntarism is a big part of today's homeschool community, and many of these people will want to see this program succeed and provide the largest amount in scholarships.

 

It seems possible that the workload could be quite different every month throughout the school year, so that it would make sense to have far more people working at some times than at others.

 

Some of the staff positions might be held by people who are retired public school teachers. These people have a great deal of teaching and school administration experience, but, having earned their pensions, they will probably not feel the need to again be part of a large and competitive bureaucracy. Many of them continue to do substitute teaching after their retirement, and perhaps they would consider working on this staff as a kind of substitute teaching position.

 

The $50,000 figure seems to be about what teachers typically receive, although they may receive other benefits that might reach $75,000 in total value. I am assuming that these other benefits will not be necessary for people who are retired and have those benefit needs already taken care of for them. This proposed flat salary structure would also be consistent with operating a charitable program, where the focus is on services delivered, rather than on salaries received.

 

2. Staffing functions, duties, and information products

1. The first duty of the staff, of course, will be to see that the scholarship money is distributed properly to the right educational suppliers on behalf of the students and parents.

2. The second duty will be to compile and maintain a catalog of the known educational product resources available to people in Utah. Where possible, evaluations of these educational resources will be done by the UFA staff and by the parents and children who use these resources. The goal of this effort is to make it as easy as possible for parents to choose an appropriate set of educational resources for their children.

3. The third duty will be to help provide some recorded measure of the educational progress made by the children.

4. A fourth duty might be to analyze the overall project experience to see if there is some reason to suggest new areas of educational services to be provided. These hints might result in people producing new educational services.

5. A fifth duty might include collecting data on just what is happening in the lives on the approximately 105,965 school-age children in Utah who are not participating in the public school system. If there are truly that many people outside of the public education system, then perhaps this new UFA program can be adapted to help their needs.

 

3. Payments and quality policy

Expect to keep payments on a short leash at first to gain experience, then lengthen it out. This should require a little extra staffing at startup for years one and two. To the extent possible and practical, pay for educational services one month or one quarter at a time. The goal is not to slow down the delivery of services but to get a good record at the beginning of where the money is going and whether it is being used well. One goal is to avoid paying for a semester or an entire year and then finding out that the educational service provider cannot really execute their promise or that there is a mismatch or misunderstanding between the parents and children and the educational institution or provider.

 

(If the parents were paying for all these services themselves, this delay-time between finding a problem and solving it would be very short indeed. Simply because we are a centralized provider of scholarships necessarily slows the reaction process down somewhat, but that reaction time should be minimized to the extent possible.)

 

This situation involves a tension between moving the program forward quickly and making our payments timely and reliably to those who provide services, while at the same time making sure that there are no scam or shady operations going on. At this point, I have no idea what might happen in the area of waste, fraud, and abuse, or some kinds of scam operations, but whenever money is flowing, those things usually appear. Our goal is really to minimize them through early detection and action.

 

The educational resource providers and the Utah Fits All program manager are not required to create and keep detailed records of progress made and services delivered. However, at the same time we cannot allow there to be any serious unanswered complaints about the quality of these services.

 

4. New private schools

I hope at least one new private school starts up during year 1.

I hope at least four new private schools start up during year 2.

 

5. Continuity issues – avoid disturbing other existing scholarship programs

Our beginning goal would be to try not to interfere with existing scholarship flows to private school families, homeschool families, and other students now outside the public school system. There may be a flood of students who want to jump into this new "Utah Fits All" program, but I believe that would be a bad idea at this early stage, because otherwise we will not be able to gather in the data about how it would work in future versions with larger amounts of funding. It should be easy to see that just one tiny category of students could quickly absorb all the money which is available, leaving out all other potential categories of students who might benefit.

 

This situation requires some metering to happen at the beginning so that one group which is more well-informed or more aggressive than another group will not have any particular advantage. For example, there should not be more than about 1047 existing private school students in the state who receive scholarship money from this fund in its second year to attend existing private schools. That metered limitation would leave money for the remaining 10,959 students to receive scholarship money to fund other plans.

 

At this point, there are numerous sources of money going to students who are receiving educational services from outside the public school system. Organizations such as those known as MyTechHigh, Harmony, and others, are already delivering state school money to individual students outside the public school system network. Charter schools apply state educational scholarship money through another system. Many private schools probably have arranged for scholarships for their students.

 

We want to make sure that our little startup pilot program does not interfere with or dislocate what has already been established. Relatively speaking, the funds that will be available through this new Utah Fits All program are really quite small, and are certainly not adequate to replace any of these other ongoing systems. It is conceivable that perhaps in years five and six of this program, the funding levels would be high enough to begin to replace some of these other funds distribution systems, but that is certainly not the case before this new project even begins. We need to remember that there seem to be about 16% of the state's school-age students who are operating completely outside the public school system. This new Utah Fits All program will serve no more than 0.7% in the second year (from 5000 up to 11,958 students) and only 0.029% (197 students) in the first year.

 

6. Continuity issues – avoid disturbing students attending public school

Just as we will try not to interfere with other scholarship programs that operate outside of public schools, we will also try not to interfere with or distract those who are already attending public schools. Again, the numbers seem to say that we have about 106,000 students in the state of Utah who are not attending public schools. Certainly, we don't want to immediately increase that number through any efforts of the HFA program. As things stand, at most we can eventually provide scholarship money to somewhere between about 5000 and 11,000 students who are not attending public school, but that still is only a tiny portion of the children who might benefit from these scholarship funds, even without inviting more public school students to look to the scholarship program to meet their educational needs.

 

Modifying the methods suggested for choice of students

HB 215 seems to assume that part of the activities of the first year of the program would be to advertise to every child in the state the fact that this new scholarship program is available, inviting them to apply to receive some of that money themselves. I don't know the history of the bill, but it appears that that portion of the bill was written while they were still assuming that enough money would be allocated so that nearly everyone who wanted to use the new scholarship funds could do so. However, in the end, the money was only appropriated for about 5000 students, making the original plan for choosing students seem quite implausible.

 

If we spend hundreds of thousands of dollars individually notifying everyone in the state of this new opportunity, and then only 1 out of 140 of those students is actually able to receive some money, there will be a lot of people who are very irritated for having been invited to participate, and probably going through a lot of trouble to do so, when there was only the tiniest chance that they could actually receive any scholarship funding. Making nearly everyone in the state of Utah disgusted at this new program before it even begins does not seem like sensible public relations. We wouldn't want the people of Utah to think that their legislature has no idea what they're doing. It seems like a simple oversight, and we should not "march off the cliff" just because it seems to say to do so in the text of the bill.

 

What I suggest is a more appropriate solution is that we begin the program as soon as possible, during year one, and let a few people know that about the 197 children who are going to receive some scholarship money. I believe the parents of the homeschool and private school crowd would quickly take note of this situation and word-of-mouth would spread the exact information and lessons intended throughout the state, dispersing it to all the right people and no one else. The parents and children who are ready to act on this new program would find out very quickly, and public-school parents and students would probably hear much less about it. This "tell-a-mom" and "social media" mechanism would be completely free and would probably be almost instantaneous. This is in contrast to the potentially extremely expensive methods of trying to contact every family and child in the state to tell them about the new program, while also telling them that only about 0.7%, 1 in 140 of them, could have any chance of getting any money. This would presumably cause most of them to wonder why we even bothered to tell them about it.

 

If the Utah legislature later decides to increase the amount of scholarship money, perhaps following the lead of the legislature in the state of Iowa, then their original suggested procedure in HB215 would make perfect sense. In Iowa, about $350 million was allocated to reach about 8% of their school-age children, about 40,000 in all. That could indeed meet the needs of everyone in Iowa who would like to participate in this kind of scholarship program, so that there would be very little need for waiting lists and random selection of children, etc. Even formal applications would mostly be unnecessary, since everyone could be accommodated.

 

7. Continuity issues – expanding the HFA program to more participants

HB 215 talks about continuity and predictability so that if someone gets in the program, they can count on staying in the program as long as they want to or need to. This also applies to siblings of children in the program, presumably to make transportation issues simpler and to improve the consistency of education for the family. These basic considerations of fairness and convenience should be recognized.

 

However, in opposition, is the need to have this small amount of scholarship money spent as widely as possible throughout the Utah school-age children population. As it is, since very few children can receive any of this money, it would be highly desirable if those who have "had their turn" would allow others to "have their turn" by receiving a year’s worth of scholarship support for their own schooling. This sort of rotational plan would allow the largest number of children to be involved in this program.

 

Someone needs to come up with a clever and wise way to balance these two interests. Perhaps we can say that when a family has very good arguments for helping a child continue with the program they are in, that should be respected. However, if students are not expected to suffer very much if that source of money is removed from them, then perhaps they would be willing to allow others to have a turn. This might especially apply to the students which have only been allocated the money for one day of formal schooling a week, simply because of the way the lottery worked. Those who are attending private school five days a week would probably be the ones who would feel the greatest need to have continuity in their schooling. But notice, that they are a much smaller group than those who received only enough money to attend formal schooling one day a week.

 

8. The puzzle of the existing private school share

One of the goals of HB 215 was to make it easier for Utah students to attend private schools if they fit their educational needs better. However, the money allocated at the beginning would not even be enough to pay tuition for a fourth of the existing private school students in the state, and there is a recognized need for many more private schools to be created in the state of Utah, especially in the more rural areas. One resolution to this puzzle would be to allocate a small portion of the HFA money to existing private school students, just to follow through on one of the intentions of HB 215, at least to a token extent, and then to allocate the rest of the money to establishing other small private schools in the more rural areas.

 

We might assume that those who are already attending private schools have worked out the tuition-payment details, and we ought not to interfere with that. That argues that we should not pay ANY tuition for students who are already attending private schools. However, that seems too ungenerous, especially if there are private schools which charge a relatively low tuition and some students still struggle to be able to attend those schools.

 

Speaking of program year two, perhaps we could strike an appropriate balance for this stage of the program if we planned to pay for tuition for 200 existing full-time private school students attending existing private schools, and then pay tuition for 200 new full-time private school students attending existing private schools, and then pay for 600 new private school students attending new private schools, presumably with those new private schools created just to meet the needs of this new program.

 

9. The puzzle of the missing 105,965 students, 16% of total school-age children

Comparing the census records and the number of students reported by the Utah State Board of Education, it appears that there are about 105,965 children of school age who are outside the public school system. About 21,060 are thought to be attending private schools, but that still leaves 84,905 unserved by any organized school system. The Utah State Board of Education estimates that there are 16,085 homeschooled students in the state, but that still leaves 68,820 students with an unknown status.

 

We may find that this new "Utah Fits All" will find and reach more of those students.

 

See longer article on the same topic at the end of this document.

 

10. HB 215’s inherent idealism

HB 215 incorporates principles of freedom of choice, charity, and the forming of contracts involving personal responsibility. These are unusual principles in legislation related to government administration of anything.

 

Charity focuses on meeting individual needs rather than treating everyone exactly the same. It typically involves voluntarism rather than holding out specific tempting career paths and associated salary money and benefits. Bureaucratic structures are intended to enforce a particular standardized ideology, where charity is based on individualized ideology and behavior. In other words, there is Christian charity and there is government charity, but government charity cannot really be the same as Christian charity, because it is not done spontaneously, and based on personal philosophy, responsibility, and possibly sacrifice as is Christian charity. Government charity is done mechanically based on some measure of law and government force. The typical government tax-and-spend program sets the exact parameters which apply to everyone regardless of their circumstances. It might be age or sex or skin color or some other such immutable characteristic that gives them some particular entitlement or burden. And everyone who meets those criteria gets the same entitlement.

 

Government bureaucracy and government monopoly are typically the basis for most government programs. HB 215 tries to change this pattern, and there is a question whether it can be successful. My goal would be to make it successful, but someone else may not agree if they come from the school of thinking that prefers government monopoly and a well-paid regimented bureaucracy.

 

11. The IRS 501(c)(3) determination requirement written into HB 215 appears unnecessary and even counterproductive.

The IRS 501(c)(3) determination seems unnecessary because in the situation where state money is being spent for a state purpose, the organization administering that money is already automatically exempt from federal taxes. That IRS 501(c)(3) determination requirement becomes counterproductive if it limits the people who are allowed to compete for the program management contract at any stage of the program's life.

 

See two articles at the end of this document that provide more information.

– "Some questions concerning HB 215 administration"

– "Charter Schools: Statutes, Cases, And Commentary"

 

12. Some of the many good reasons why it would be a bad idea to follow the exact application procedure currently outlined in HB 215

Argument summary

To be brief, using the prescribed procedure in HB 215 with precision would probably require quite a bit more than the entire million dollars allocated for the first year, with all of this money being quickly eaten up through communications costs and staff effort, while also severely irritating almost everyone in the entire state, whether they are in the public school system or outside the system.  And it would still not begin to accomplish the basic task of locating, properly informing, and registering all the proper people who should be in this new program.  It does not seem like a good idea to start out this program with a monumental and highly newsworthy public-relations disaster, just for the sake of following the letter of the law.

 

If we just generalized the language of the bill a little bit, to produce what was most likely the real legislative intent of the bill anyway, and we said that all the people who are likely to be most interested and most eligible for this new program and to benefit from it, should be informed and invited to register, that would allow us to proceed in an inexpensive and sensible and effective way.

 

See an article at the end of this document that provides more information.

– “Some of the many good reasons why it would be a bad idea to follow the exact application procedure currently outlined in HB 215”

 

Appendix

20230422 Utah Fits All plan-V04

 

Relates to issue 9 above:

9. The puzzle of the 105,965 apparently missing students, 16% of Utah’s total school-age children

 

 

Planning The First Two Years Of

This New Education Experiment Called "Utah Fits All"

 

Optimizing For Research

 

The Puzzle Of The Missing Students

 

 

In order to be better prepared to offer my services as the program manager for the new Utah Fits All scholarship program, I thought I should try to get an understanding of the people and the money involved in the current Utah education program, and perhaps also see how Utah compares to other jurisdictions.

 

I see that the entire state budget is about $29 billion and the state school budget is about $5 billion, with about another $5 billion coming from local jurisdictions to pay part of schooling costs.

 

It appears that there are about 675,000 K-12 students in Utah attending the public schools. There are another 21,060 students attending private schools and another 16,085 students engaged in Do-It-Yourself kinds of homeschooling education. (One report was that there were only about 1,227 homeschooled children in the state, although I don't know where that very low number came from. It may have something to do with how these things are recorded and reported).  Altogether, that is a large number of people and a lot of money, but that still doesn't seem to be the whole story.

 

As a check on the numbers offered by the Utah Board Of Education, I thought it might be useful to check the census records for Utah. The 2021 census seems to show that there are 780,964 Utah children in the age range from ages 5 through 17, which presumably is the age range for the typical K-12 schooling. But notice that, beginning with the Utah School Board number of 675,000 students, that leaves 105,965 students not accounted for. Presumably these are potential students who are not being taken care of by the Utah public education system.

 

Someone might want to seek out the answer for why there are 105,965 students who are not being served by the supposedly universal Utah public school system. I certainly don't know the answers, but perhaps someone does. One of the lower-level goals in this new educational experiment would be to find out why that is so.

 

We do see that 21,060 of these people have access to private school and about 16,085 have invented a Do-It-Yourself home school program, but that still leaves 68,820 students outside of ANY kind of educational system.

 

Public schools are always quick to say that they are required to provide education for everyone in the state, but obviously for some reason, there are still 15.7% of the children the state who are outside of the public school system. It may or may not be the fault of the public school system that they are not serving any of those children, but at least we ought to know what the reasons are. Perhaps this new Utah Fits All program is one effort to reach out to this 15.7% of children who are not included in the public school system, for whatever reason.

 

We might also notice that if the state intends to allocate money to serve all of the potential students in the state of Utah, with 105,965 students being outside the system, then, at the fairly low number of $8000 per student, that is still $848 million that we are short. One might wonder whether the state school administrators are aware of this problem, and have simply been able to ignore this nearly $1 billion size problem, simply neglecting to pay those bills.

 

A data collection suggestion

Again, it should be very useful to set up a system for the first two years of operation of the Utah Fits All System to answer the many questions which seem to be unclear. To do that, I'm going to suggest that, since we can, at most, offer educational assistance to only about 1 child out of 140 children in this experiment anyway, a very small group in all, that we ought to do it in a way which helps inform everyone involved -- the parents, the children, the state school board, the legislature, the governor, etc. -- on what exactly is going on in this education area, and what should be the goal for the future.

 

To do that, I would suggest a fairly simple system: We would allocate one-fifth of the money available each year, for two years, to each of five categories: 1) funding students who would benefit from one day of school a week; 2) two days of school a week; 3) three days of school a week; 4) four days of school a week; and 5) five days of school a week. Obviously, the amount of money each would get, and the kind of schooling which each student would receive would be quite different, and the families would likely have different reactions and different rates of success. I know there are already many students in the homeschool world who now receive enough state money (through other programs) for one or two days of school a week, and they seem to like it and do well with it. For them, this would just be an expansion of a program they are already familiar with.

 

By allocating the same amount of money to each of these five different categories, that will mean that there will be a lot more children in the one-day-a-week category than in the five-days-a-week category, but, since we really don't know what all of these people will want to choose at this point, it is as good a way as any to begin. Obviously, we expect to learn something from this process so that we can do a better job, beginning at least in year three.

 

The bill HB 215 allows for some random allocation of scholarships in the case of there being too many applicants for too little money. In the beginning case, where we are off by a factor of 140 times from being able to allow anyone to choose the kind of education they would prefer, we might as well set it up so that we have a good chance of getting statistically useful data and experience and wisdom from this experiment. If someone has a better idea than what I have suggested, we can certainly consider that.

 

One other effect from doing it this way is that we can do two things at once. 1) We can try every combination of level of support for education, while 2) also educating the largest number of people as to what the possibilities are for education outside of the public school system. In other words, for example, if there are 5000 students who receive money to attend one day of school a week, and the rest of the time they use a homeschooling mechanism, we will have introduced the maximum number of people to what the state is trying to do with this experiment, and we can get the benefit of their experience and their opinions.

 

Certainly, one of the jobs of the employees of the project manager group will be to collect and record the experiences of all these different groups of people. That will allow us to advise other parents and children who are making these choices and also to give feedback to the Utah State Board of Education and to all of the legislators who passed HB 215 into law.

 

We should notice that the state of Iowa is conducting a similar experiment, and they have apparently assumed that about 8% of their K-12-age children will want to be part of their scholarship program, attending some form of school outside the public school system. They are allocating $350 million a year to make this happen. The population of that state is similar in size to Utah, so they might be a good model to observe closely.

 

Notice that where Iowa is estimating and aiming for an 8% participation rate in this program, we already see that Utah has an apparent situation where 16% of its school-aged children function outside of the public school system. If we assume that most students in the state of Utah have about $11,000 expended on their behalf, counting all of the money coming from several different sources, that would mean that to be fair and consistent, it would cost about an extra $1.165 billion to include all of the unserved 105,965 school-age students in the public school system, or some other state-financed system.

 

We may have found an unexpected result here, where, although the public-school teachers and union may feel like they are potentially being cheated out of students and money because of this Utah Fits All Program, in reality, that Utah Fits All program, affecting only about 5,000 students, is only a very small potential problem for them. The much larger factor and problem is that the current situation is currently saving them $1.165 billion in school costs, simply because there are 105,965 students which the public school system is not serving in any way.

 

It seems to me that if one is preparing to make some big policy decisions about education, it would be important to have all the facts. If some people start out with some bad assumptions about how the public school system works, then they are probably going to develop some suboptimal opinions based on those incomplete and possibly false assumptions.

 

As another policy angle to consider, it seems quite possible that the 105,965 students and associated families, who are not part of the public school system, have actually been paying about $1.1 billion into the tax base for the school system for their entire lives, and getting no return on that tax cost. Or, to put it another way, the Utah tax system is getting $1.1 billion to run their school system from these people, and these people are getting nothing for their contribution. Just as a simple matter of fairness, this ought to be investigated and rectified. It could be that this Utah Fits All program is an acceptable way to return these peoples’ money to them in a form which they find useful. If there are cases of resentment against the unfairness of government in taxation and in the delivery of services, this could be one of them.

 

 

 

 

20230222 HB215 questions-V05-trim

 

Relates to issue 11 above:

11. The IRS 501(c)(3) determination requirement

 

 

Some questions concerning HB 215 administration

 

 

1. No apparent need for an IRS 501(c)(3) determination before the RFP process

I assume under the terms of bill HB215, as passed, this new scholarship agency will be operating as a state agency, and therefore is already completely tax exempt under state and federal law because it is a state agency, and so there is no obvious reason why it also should have to meet the terms of the federal 501(c)(3) laws and rules for a public foundation. I believe it is a state agency, not a public foundation. I believe charter schools have been considered by the courts to be state agencies, so I assume the same will apply here. We might consider this new organization to be a “virtual charter school,” that is, one that, like charter schools, has no taxing authority, and also has no students, but only issues scholarships. It might be desirable to have the state attorney general or the state school board issue a legal opinion on this important point to clear up any questions.

 

As far as I can tell, the only effect of continuing this seemingly pointless requirement for a 501(c)(3) determination would be to unreasonably limit the number of people who can compete for the RFP. One might expect the state school board to want to encourage as many people as possible to compete for the administration of the scholarship grant, so it makes no sense to arbitrarily limit that number through this otherwise irrelevant 501(c)(3) requirement. It may not be that difficult to eventually get a 501(c)(3) determination, if it is really needed, but it could be extremely difficult, in terms of administrative time and money, to get that paperwork done in the few months before the RFP is issued.

 

Suggested solution: Remove that requirement from the bill, or simply have a state agency declare that that requirement is unnecessary to meet the legislative intent of HB215. Otherwise, the state contracting agency would seem to be unnecessarily limiting competitors.

 

A closer look at the text of the bill:

 

53F-6-401. Definitions.

[At lines 259-260 of published bill:]  

53F-6-401 (4) (4) "Program manager" means an organization that:

53F-6-401 (4) (a) is qualified as tax exempt under Section 501(c)(3), Internal Revenue Code;

 

First of all, as is demonstrated in the separate attachment below, this new program manager organization is automatically "qualified as tax exempt" simply by being a state-sponsored and state-funded organization, regardless of whether one applies the legal standards for IRC 501(c)(3) or not. 

The bill does seem to remove all ambiguity about its demands concerning the 501(c)(3) requirement by requiring the IRS determination certificate to be part of the response to the RFP. However, because I consider this requirement to be unnecessary in this context, legally speaking, and almost impossible for any new person to comply with on short notice, I am going to suggest that the RFP administrators choose to read the text of HB 215 slightly differently.  Perhaps they should focus on the “is qualified” phrase, and, in turn, read it to mean “COULD reasonably expect to eventually be qualified if the need arose” as another way to read the text of the bill so that it does not unreasonably discriminate against otherwise perfectly qualified potential participants in the RFP process.

 

That reading would remove the requirement to be prequalified, that is, to have an IRS determination of public foundation status before being able to participate in the RFP process. The IRS recognizes that its processes are often slow, so it allows determinations of tax-exempt status to be retroactive for up to 27 months. If the IRS did not act especially quickly in issuing determinations for any would-be RFP participants in this case, then that relatively unimportant paperwork process would unnecessarily restrict the field of participants. Even the IRS would let such an organization operate for at least two years without causing a problem.

 

There are some strange situations which arise in the area of charter schools. It seems to be fairly common that charter schools are actually operated by for-profit companies. That sometimes seems to mean that there is a shell company which has received a 501(c)(3) determination, which then contracts for all of its educational work to actually be done by a for-profit company. This seems like a strange arrangement, but it also seems to be fairly common. Obviously, the for-profit operator of the school would not be eligible to receive a 501(c)(3) IRS determination, but the "shell” company that completely controls it, apparently would need that determination. This is all very strange and seems to be quite confusing. Perhaps the extra and seemingly unnecessary complexity of such a situation has come about through some strange historical happenstance or legal quirk which I cannot explain at this point.

 

One could imagine that this new program manager organization might eventually want to also have status as a 501(c)(3) federal public foundation status, but not for the purpose of administering this particular state government contract. The other reasons for getting the 501(c)(3) status might conceivably be so that this same organization, or a closely related organization, could accept contributions 1) from religious organizations and 2) from private and corporate donors who were interested in expanding the number of scholarships which were granted through this organization. In those possible cases, plus also perhaps in 3) the case of this new organization receiving federal money, it might be useful to have the 501(c)(3) status of a public foundation so that these three other operations (four in all) could go on simultaneously. But none of those three extra arrangements would be necessary (or perhaps even desirable) to conduct business under the contract with the Utah State School Board.

 

Taking it a step further, even in the three extra cases of receiving money from three extra sources, beyond the state money which is intended by HB 215, it seems highly likely that the tax-exempt status of the program manager organization under state rules would still be sufficient to handle those extra three kinds of contribution streams, even without an IRS determination concerning 501(c)(3) status under separate federal law.

 

HB 215 does indeed intend to create some new ways of handling education processes, but it's hard to imagine that the original intent was to have the state legislature create an organization which was totally unaffiliated with the state government, so that the only rules left to apply to it from the US legal universe would be federal public foundation rules.

 

Perhaps there is another issue lurking here concerning HB 215 and the 501(c)(3) question that has to do with the 10th amendment. The 10th amendment reads “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.“ That should probably mean in this situation that the states are perfectly empowered and qualified to take care of their own state business, especially including education matters, completely separate from having to receive any permissions from the federal government to do so. It seems like it would be good state-level constitutional law practice to keep pushing those boundaries of state power outward for greater state freedom in all important areas.

 

In such an experimental state-level program as this new Utah Fits All educational program, which tends to loosen the grip of the one-size-fits-all federally-supported public school system on state and federal citizens, that seems like an unlikely place for extra federal monies to be supplied by an expansive and jealous federal government. I don't know much about how the states relate to the federal Department of Education, but I assume that the federal Department of Education is always pressing to expand central powers over state education. It may be that the so-called “Common Core" movement amounts to an attempt by the federal government to surreptitiously get more control over state-level educational matters.

 

2. The start-up process for allocating scholarships

The bill contemplates people indicating an interest in receiving a scholarship by applying for it, and if there are too many who apply, then there should be some lottery process to choose which ones actually get the money.

 

The problem with that seemingly simple process (which might work just fine if this process were operating on a larger scale) is that there are about 700,000 students in the state who are eligible to receive the scholarship money, but only about 5000 can actually receive it. That is, 0.7%, or about 1 out of 140 children in the state will be eligible to actually receive it. That implies the administrator of this program doing an enormous amount of work, for very little gain, and requiring the parents and students to do a great deal of work, with most of that effort wasted.

 

(As discussed in more detail below, in contrast, the new Iowa law concerning education savings accounts works similarly, but with perhaps nearly 12 times the funding, so that almost anyone who cared to could get a scholarship, supposedly within the terms of the original bill as passed.)

 

If this program is viewed as just another entitlement program, with everyone being able to collect an extra $8000, merely by applying, then it is likely that all 700,000 students and their parents will actually apply for the $8000, and that will likely lead to quite an administrative muddle.

 

It would probably be necessary to set up a special computer system just to handle this expensive and redundant function, and then that computer system would probably have no further use, most likely, at least not for several years.

 

This bill seems to contemplate advertising this new program to all 700,000 students and their parents. That implies the program manager having access to information about all the potential students in the state and their parents. Just putting a few signs on a few billboards, or putting ads in a few newspapers, is not likely to catch the eye of every last person in the state. Probably only individual mailings would have a chance of catching everyone, and then it might take multiple mailings to be sure of making everyone aware. Even with a very low cost of only one dollar for each student to inform them, that represents the cost of at least $700,000, most of which will do no good, and will probably do much harm in terms of confusion and disappointment.

 

I have no personal experience with direct-mail operations, but I attempted to use a direct mail cost calculator to get a more realistic estimate. Using some seemingly sensible parameters, I got a cost of $875,000 to send one piece of mail first-class to 700,000 people using a commercially available mailing list. If we had to do that three times to make sure that everyone was properly notified, that could cost $2.625 million. And, of course, that does not include the salaries for the staff who would administer this process. Altogether, that obviously greatly exceeds the $1 million allocated for such startup administrative processes.

https://www.uspsdelivers.com/direct-mail-cost-calculator/

 

And then after 700,000 people have been told about the program, and they choose to apply, then there will be much disappointment and disillusionment when only 1 out of 140 can actually receive any money. This would give the program a bad name to start with, when there is no need for that to happen. If it is really only a pilot program, then it ought to be operated as a pilot program, and not pretend to be the real thing, which would perhaps require it to cover up to 20% of the state's students. That could require that the appropriation be from 28 to 30 times larger.

 

It seems unlikely that the state school board would even provide the necessary information on 700,000 students to this new program manager unit, although the state school board probably has that data. There would also be some good reasons for this new program manager to not even WANT to have all that student and family information and be responsible for it, when only a tiny part of it is relevant to their activities. Data breaches, potentially initiated by or beneficial to curriculum publishers, could end up causing some bad press coverage.

 

We should note that the most likely outcome of this shotgun approach to notifying students and receiving applications is that people in urban areas who are already attending private schools will make up most of those who apply for the money and receive it. I would consider that result to constitute a significant failure of this pilot project. If there are about 30,000 private school students in our state, one percent of those students would only be 300, and that is probably about the right number of students in urban areas who attend existing private schools who should receive some of this money. All the other 4700 students should probably be distributed across the entire state of Utah and be expected to use other educational facilities, existing or new.

 

Suggested solution: There are 75 House districts in the state where state representatives to the House of Representatives could participate in this program by helping select about 67 students to be in the program from each house district. This small group of people could be chosen specifically because they are very interested in expanding their school choices, and are willing to take full responsibility for doing so as parents, and express a willingness to put enough energy into the system to make this work in their district. There is no point in awarding the money to people who have no desire to use it as intended by the new legislation. It would just cause confusion and pointless administrative effort.

 

The idea and strategy would be to select a small number of each category of person who might want to benefit from the system. There might be those who wanted to have it pay for a few specialized classes for their homeschooled children, or it might pay for some small group private schools, which might be especially useful to groups of larger families, and there might be perhaps two or three examples in the state of groups of parents using this money to create a small private school of up to 150 students, probably in some urban area. The successes and failures of these educational experiments might be recorded so that we can learn something useful from this pilot project.

 

3. Clarifying some accounting rules

It should be clarified that any money designated for administration which is unused can simply go into the scholarship category. That way, if the program manager is able to save money, perhaps as in the ways suggested above, that money can be used for actual scholarships. It is hard to predict the costs of getting this program started properly, so it is nice to see that the legislation allows for up to $1 million for that process. However, if ways can be discovered to administer this program inexpensively, then the potential students should benefit. For example, if $500,000 out of the $1 million allocated to administration can be used for scholarships, because efficient solutions were found to various administrative problems, then somewhere between 60 and 300 extra students could receive money helpful to their education.

 

4. Offering another kind of pro rata or partial scholarship

The bill does talk about "prorated scholarships" so that people could attend the public schools for part of the year, and one of these new Utah Fits All school arrangements could be used for part of the year, and the scholarship money could be properly divided between the two.

 

Beginning with that "pro rata" theme, I would like to suggest that we encourage many people to continue teaching their children just as they are today. Sometimes that includes paying for specialized classes one or two days a week. If they were taking classes one day a week, that might logically mean that they were getting 1/5 of a scholarship which would be $1600 for the year for one day of classes each week. We already have groups such as My Tech High and Harmony who are doing this sort of thing by providing state money through different channels. I think they are able to offer up to $1800 a year for these sorts of payments for classes.

 

To mention an extreme example, if many homeschool students in the state were to use this program of receiving 1/5 of an $8000 scholarship, then instead of 5000 students getting some benefit from this money, there would be 25,000 students who could get some benefit from this money. I don't expect the outcome to be that extreme, but I mention it by way of illustration of how people's current choices of education can be helped, while spreading the available money as widely as possible.

 

Many homeschool families worry about the state trying to use money or other means to interfere with the freedom of their homeschooling process. We might find that many of them prefer to have a limited involvement with the state and to maintain their homeschool independence rather than jump into being heavily dependent on the state by attending a full-scholarship private school.

 

After some real experience, and perhaps after an increase in the amount of appropriated money, then the procedures for allocating scholarships could become more like that suggested in the HB 215 legislation.

 

A similar parallel project in Iowa

The state of Iowa has recently passed a school bill similar to the one in Utah. They use the term "education savings account." Many of its terms – funding, enrollment projections, and administration are similar to the Utah bill, and should provide some interesting helps in interpreting and administering the Utah bill.

 

Surrounded by private school students, Reynolds, a Republican, inked her signature on a law that will allow any Iowa family to use taxpayer funds to pay for private school tuition — at a cost of $345 million annually to the state once fully phased in.

…

The law will phase in over three years and eventually allow all Iowa families to use up to $7,598 a year in an "education savings account" for private school tuition.

…

For the first year of the program, the 2023-24 school year, the funds will be available to all incoming kindergarten students and all public school students. It will also be offered to current private school families who make at or below 300% of the federal poverty level.

              Eligibility will expand to include private school families at or below 400% of the federal poverty line in the 2024-2025 school year.

When the law is fully phased in by the 2025-2026 school year, every Iowa family will be eligible for the program.

…

The program is expected to cost $345 million annually by its fourth year, once it is fully phased in, according to an analysis from the nonpartisan Legislative Services Agency.

              Over the course of the first four years, the state will spend about $879 million as the program phases in.

              The Legislative Services Agency's analysis predicts 14,068 students will be enrolled in the program in fiscal year 2024, its first year. That includes an estimated 4,841 students who would transfer from a public school to a nonpublic school.

              By fiscal year 2027, the agency expects 41,687 students in Iowa to receive education savings accounts to pay their private school costs. Over that time, the agency projects enrollment in public schools to drop from 486,476 in fiscal year 2024 to 475,207 in fiscal year 2027.

              By the fourth year, the agency estimates public school districts will receive $49.8 million in new per-student funds for private school students within the public district's boundaries. The agency also expects a net decrease of $46 million in public school funding as a result of more students attending private schools.

The nonpartisan analysis says the cost to administer the program is unknown. The bill allows the Iowa Department of Education to contract with a third party to administer the education savings accounts, but the state hasn't issued a request for proposals from companies seeking to manage the funds.

Jubilant [Gov.] Kim Reynolds signs Iowa's seismic 'school choice' bill into law. What it means:

https://www.desmoinesregister.com/story/news/politics/2023/01/24/iowa-governor-kim-reynolds-signs-school-choice-scholarships-education-bill-into-law/69833074007/

 

Iowa Legislature passes massive private school bill, sending it to Gov. Kim Reynolds

https://www.desmoinesregister.com/story/news/politics/2023/01/24/iowa-house-senate-lawmakers-pass-kim-reynolds-private-school-scholarships-education-bill/69822687007/

 

It is also interesting that Iowa is of a very similar size to Utah concerning total population and student population. The total Utah population is 3.338 million and the total Iowa population is 3.2 million. There are 675,000 students in Utah and there are 517,444 students in Iowa. Iowa is providing $7,598 per student per year and Utah is providing $8000 per student per year.

 

The biggest difference between the two programs is that Iowa has already provided that in the fourth year of operation of their new program about 8% of the state students will be in the program, estimated to be 41,687. In Utah, the only plan in effect at the moment is that 0.7% of the state students, about 5000, can enter the program the first year, and there are no projections for the future.

 

My personal guess is that the 8% student participation in Iowa will turn out to be a very low estimate, and that some number which is two or three times that size (16% to 24%) will be the number of students wanting to make the change from public schools to private schools. There may indeed be 41,687 students in the plan in the fourth year, but there are likely to be two times that number on waiting lists hoping to get into the program. That will be especially true if the private schools show a very noticeable improvement in student performance and satisfaction, as one might expect. That high demand situation will leave the legislature to fight another funding battle with the public school system in the near future. One of the tricks will be to have the data showing the superior performance of private schools, while also not inundating and harassing the private school students with endless testing just to help fuel the impending political battles.

 

I expect Utah to be in a similar situation, with at least 20% of the students wanting to move to an alternate schooling method, but the legislature has yet to provide for that likely situation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20230224 cases on charter schools-V03-trim

Relates to issue 11 above:

11. The IRS 501(c)(3) determination requirement

 

Charter Schools: Statutes, Cases, And Commentary

 

 

In HB 215, the Utah legislature has invented a new kind of educational organization which only issues scholarships. That is why I am suggesting that someone needs to issue an official legal opinion on the status of this new organization. The closest thing in existence right now is probably the charter schools. Some define a charter school as a state organization, to be treated essentially as a separate school district but without any taxing authority. That means that the charter school is limited to the amount of money provided by the state Board of Education for each student, and does not receive any extra money through local property taxes or other tax sources.

 

I would like to invent a new name for this new HB 215 entity and call it a “virtual charter school” because it not only has no taxing authority, but it also has no students. It is hard to imagine that this entity can be anything but an agency of the state, since that is the only way it is expected to receive any money whatsoever in order to operate. Presumably, it operates under state laws and regulations, however permissive those laws and regulations may be. It would be completely unreasonable to call this organization an independent “public foundation” under the rules of IRC 501(c)(3). However, since the potential 501(c)(3) status is mentioned in HB 215, that issue needs to be dealt with in some way.

 

I am not trying to be exhaustive in trying to answer this question, but the following citations should be helpful.

 

Law review articles are often good ways to understand the state of the law in certain situations. A 2015 University of Massachusetts Law Review article covers many legal aspects relating to charter schools. Here is a segment of its table of contents:

 

VI: ANALYSIS OF HOW COURTS HAVE TREATED THE STATUS OF CHARTER SCHOOLS, CHARTER SCHOOL OFFICIALS, AND EDUCATIONAL MANAGEMENT ORGANIZATIONS............. 267

A. Are Charter Schools Public Entities That Should Be Subject to the Same Treatment As Other Public Entities?................................................................................................................................ 268

B. Are Charter School Officials Public Officials?................................................................... 269

 

A part of the actual text is as follows:

 

A. Are Charter Schools Public Entities That Should Be Subject to the Same Treatment As Other Public Entities?

In six cases discussed in this Article, courts addressed whether charter schools were public entities that should be subject to the same treatment as other public entities. In three cases, the courts answered

this question in the affirmative. In two cases, King v. United States,²¹⁸ and Zager v. Community Charter School,²¹⁹ the courts found that charter schools were entitled to the same treatment as governmental

entities because charter school statutes declared that they were carrying out the governmental function of education.

²¹⁸ King v. United States, 53 F.Supp.2d 1056, 1066 (D. Colo. 1999) (charter schools are entitled to immunity the Colorado Governmental Immunity Act).

²¹⁹ Zager v. Chester Cmty Charter Sch., 934 A.2d 1227, 1231 (Pa. 2007) (charter schools were public agencies under Pennsylvania’s Right-to-Know Act).

“The Legal Status of Charter Schools in State Statutory Law,” University of Massachusetts Law Review,

Volume 10, Issue 2, Article 1, January 2015 by Preston C. Green III, Bruce D. Baker, and Joseph O. Oluwole. Can be cited as 10 U. Mass. L. Rev. 240.

https://scholarship.law.umassd.edu/cgi/viewcontent.cgi?article=1098&context=umlr

 

Much more is discussed in the cited article, but this should serve as a short introduction.

 

The case logic is mixed and a bit confusing, but in general, the answer is yes that charter schools are public entities. The courts look closely at the specific state statutes to reach their conclusions. The relevant Utah state statute seems to agree that charter schools are public entities. That means that charter schools are tax exempt by definition because they are performing the accepted state function of education under state direction. That is the right and duty of states under our federal Constitution.

 

Utah State Statute

Effective 5/5/2021

53G-5-404.  Requirements for charter schools.

…

53G-5-404 (4)(d) For the limited purpose of compliance with federal and state law governing use of public education funds, including restricted funds, and making annual financial audit reports under this section, a charter school is a government entity governed by the public education code.

 

53G-5-404 (5)(a) A charter school shall be accountable to the charter school's authorizer for performance as provided in the school's charter agreement.

 

Here is a quote from a document found on the IRS main website:

 

CHARTER SCHOOLS

…

3. Exemption Under IRC 501(c)(3)

For-profit businesses operating charter schools are not eligible for exemption under IRC 501(c)(3). If the public school district is an integral part of the municipal government, the public school and any charter school it operates will not qualify for exemption under IRC 501(c)(3), as it has no separate existence from the municipal government. The income of a municipal government is exempt from federal income tax under the theory of implied intergovernmental immunity. If the school district is separately organized and satisfies the requirements of Rev. Rul. 60-384, 1960-2 C.B. 172, the district may be recognized under IRC 501(c)(3) provided it otherwise meets the requirements for exemption

https://www.irs.gov/pub/irs-tege/eotopicj00.pdf

 

The above quotation is part of a much longer document which was used for Continuing Professional Education purposes. Presumably that means it has been reasonably well checked for accuracy, especially since it is provided on the IRS website. The full document appears at the following website – The Planned Giving Design Center (PGDC) – where advice is given on numerous tax-exempt organizations and how one can contribute to them.

https://www.pgdc.com/pdf/CPE-FY2000.pdf

 

Other Materials

 

On the interesting question of how to sue a charter school, we have this comment from the FindLaw site:

 

The legal liability of charter schools is often governed by state law, and in most cases charter schools (and their employees) are treated like public schools.

“How to Sue a Charter School,” By Christopher Coble, Esq. on August 30, 2016, Last updated on March 21, 2019. https://www.findlaw.com/legalblogs/law-and-life/how-to-sue-a-charter-school/

 

Here is a comment from Ballotpedia, the Encyclopedia of American politics:

 

Charter schools in Utah are public schools operated independently of public school systems, either by nonprofit or for-profit organizations. Although they are largely publicly funded, charter schools are exempt from many of the requirements imposed by state and local boards of education regarding hiring and curriculum. … As of March 2017, 44 states and the District of Columbia had approved legislation authorizing the creation of public charter schools. Six states had not.

https://ballotpedia.org/Charter_schools_in_Utah

 

The following article discusses cases dealing with two interesting side issues related to charter schools concerning dress codes and legal liability for inaccurate enrollment projections.

“Court cases consider charter schools’ ties to state government,” Mitch Kokai, February 23, 2023

https://www.carolinajournal.com/opinion/court-cases-consider-charter-schools-ties-to-state-government/

20230429 good reasons UFA-V03

Relates to issue 12 above:

 

Some of the many good reasons why it would be a bad idea to

follow the exact application procedure currently outlined in HB 215

 

 

Argument summary

To be brief, using the prescribed procedure in HB 215 with precision would probably require quite a bit more than the entire million dollars allocated for the first year, with all of this money being quickly eaten up through communications costs and staff effort, while also severely irritating almost everyone in the entire state, whether they are in the public school system or outside the system.  And it would still not begin to accomplish the basic task of locating, properly informing, and registering all the proper people who should be in this new program.  It does not seem like a good idea to start out this program with a monumental and highly newsworthy public-relations disaster, just for the sake of following the letter of the law.

 

If we just generalized the language of the bill a little bit, to produce what was most likely the real legislative intent of the bill anyway, and we said that all the people who are likely to be most interested and most eligible for this new program and to benefit from it, should be informed and invited to register, that would allow us to proceed in an inexpensive and sensible and effective way.

 

Background and logic

To start over at the beginning of the process, it appears from its face that the bill probably went through several iterations while it was being written and amended so that the different parts of the bill, amended at different times, are not necessarily internally consistent in its final form.  Most likely, what was originally intended was something like what has been passed in Iowa and is being implemented there at the same time as Utah's bill HB215.  This school age population in Iowa is very similar to that in Utah. In that Iowa case, the legislature appropriated an annual amount of $350 million for this new program, which would allow about 40,000 students to be part of the long-term program or about 8% of their school-age students.  That would likely mean that almost every student who wished to take advantage of this private scholarship program could receive the necessary money.  The necessary money could be reallocated from the public school system with probably very little change to the public school system, especially if they have a growing student body, and everyone could go merrily on their way.  The obvious point is that if essentially everyone who is interested can get scholarship money, in only a few cases might there be a need for a waiting list or some kind of lottery allocation system, and the problem could get solved quickly and locally. Or there might be a legislative mechanism which would make necessary adjustments the next year so that within a year, everyone could find themselves in the right school settings based on their preferences.

 

If the thinking in the original Utah bill was something like Iowa's, then we would get the result we see before us – a bill that was designed to solve the entire private education problem all at once, which was then suddenly cut to a tiny fraction of its original intended size, presumably for short-term political reasons.

 

In other words, at some point the amount to be allocated for this program was probably much larger and was then drastically cut so that the new assumption was that in the first year of the program there would be no students receiving any scholarship money at all, and in the second year of the program there would only be 5,000 students receiving scholarship money. That is only about 0.7% of the school-age students, or only about 1 out of 140 of the state's school-age children who could receive one of these scholarships.  It's interesting that $200 million was assigned to raise teacher salaries rather than go into a new scholarship program.  If that presumably short-term political action had not been necessary, then at least $240 million could be available the second year, which would have allowed about 4.4% of Utah students, or about 30,000 of them, to be part of the program.  That would most likely not meet all the demand, but it might make it so that one had better than a 50-50 chance of receiving scholarship money instead of 1/140 chance of receiving scholarship money. 

 

Even that change would make the procedure described in the bill semi-workable.  Again, if this were a program that was intended to be adjusted quickly to meet the actual demand, then at worst, students would have to wait an extra year to join the program.  As it is, there is no clear indication that any extra money will ever be allocated to serve all of those who would be interested in receiving their state education through that kind of the channel. For planning purposes, one must assume that this is all that the program will ever be, and adapt accordingly.  It may be that the program will become the size of the Iowa program at some point, but there is no reason to make any assumptions about that kind of a future.  In other words, a practical person would simply begin where we are rather than where we might have been if other hundreds of millions of dollars were waiting to be spent.

 

One scenario – the worst case

Let's say we want to start out with the most rigorous way of enforcing maximum thoroughness and fairness in dispensing scholarship money.  That would probably mean making sure that every school-age child and their parents in the state received proper notice of what this program entails, and, to make sure that our coverage was complete, we would need to either receive a clear indication that they were not interested, so we could check them off, or we would receive their application.  But doing anything so rigorous would probably require several communications by specific letter to every child in the state, perhaps first informing them and requesting that they make a clear choice, and then other rounds of follow-up letters for all those who didn't respond the first time.  Just that process alone for 781,000 children would probably cost several million dollars, costing more than two dollars apiece just for the mailing costs.

 

The process would be somewhat simpler if the public school system would provide the name and address of every child currently in the system, and perhaps any information they have about children who are waiting to enter the system.  It seems highly likely that the state public school system would not provide that information, giving some reasons about not wanting to compromise the privacy of all these students.  If that were true, then the communication process would require either creating our own school-age student database from scratch or purchasing commercial mailing databases, if any such are available, and updating them to be more precise.  One could imagine trying to use census records to do this sort of thing, but it seems likely that the federal government would not give us that detailed data either.

 

A single mailing on this scale could easily cost $600,000, just for the first mailing to Utah's reported 780,965 school age children (of whom 675,000 are attending public school), and perhaps another $600,000 in staffing costs to create this verifiably complete database of potential students.  So, with the original mailing and follow-up mailings, the entire cost could easily reach $2 million.  And then what would we have accomplished?  We would have probably received a statement of interest and application from perhaps 600,000 out of the 675,000 school-age students in our state.  But there are 106,000 students who are not part of the public school system at all, according to general census figures, so we would have to create our mailing list to include at least that extra 106,000 students.

 

Let's assume that 75,000 of the existing public-school students said they were not interested, and 600,000 of the existing students said they were interested, plus 106,000 students who are not part of the public school system also said that they were interested, and we received applications from them all.  If we had not done so before, we would then inform them that only 0.7%, about one out of 140 students, would receive any money and so we were then going to conduct a lottery to see who could receive this money. (Incidentally, if we told ahead that only 0.7% of them could ever get a scholarship, then we would probably not been hear from most of them, and we would never actually know whether our notification and application process was adequate and fair.)

 

We could then conduct a lottery, and we would most likely find that about two-thirds of the people who were chosen really had no idea what this program was about, and were not really willing to sign a contract to become responsible for the full education of their children, and actually follow through with that contractual commitment, being happy to let the public school system make all these choices for them as in the past. So, once they fully understood what this all meant, they would say that they would simply stay where they were, probably attending public school, and our lottery would essentially have been a pointless failure.  We would probably have to re-conduct that lottery multiple times after fully interviewing and perhaps investigating each of the families who supposedly "won" the lottery.

 

We might have asked them to sign the contract which is part of bill HB 215 requiring them to say that they would accept complete responsibility for their children's education, but it's likely that very few of them would understand what that meant, or would have the wisdom to act wisely on it, so that if they were given the money they would treat it as simply a return of taxes or some kind of a child credit allowance, and they wouldn't go through the steps of actually finding any new and more proper educational facilities for the children.  This situation would probably generate a very interesting scam where parents could designate some "school" to receive their scholarship money, and that "school" would agree to simply give most of that money back to them to spend as pure income.  The parents would still send their kids to public school, just to get them out of the house, and they would be highly offended if they were not able to send their children to public schools, because they had supposedly agreed to go the private school route and had received some of the associated money.  All of this would end up meaning that all the money spent the first year and the bulk of the money spent the second year would be a complete waste, having accomplished nothing that it was intended to accomplish.  The startup staff of this Utah Fits All program would have worked their way through this fun house maze and essentially all of their efforts would have been wasted.

 

Having created massive confusion, spent large amounts of money uselessly, and made the entire program a complete failure, then what happens in year three?  Most likely the Legislature would look at this and say that the whole thing had been handled it in such a way that it probably could not have been done any worse, and they would simply scrap the whole program, and that would be the end of it for another decade in the state of Utah on the issue of supplementary private schooling for children who need it.

 

Or, we could avoid all of this public nonsense, confusion, and waste, with a large number of uncomplimentary news articles written about it, and just take a few simple and expensive steps and get the result which is appropriate in this case.  That is what I have outlined above.  If someone is determined to create a huge and painful failure, then let that be someone else. The world's militaries have these kinds of colossal failures all the time, and they have special names for them, but I won't mention them here.

 

 

There are certainly other scenarios which are less complex and less expensive than the one I have outlined here, but as a general rule, I believe those procedures will be less thorough and less fair. Strangely enough, in our imperfect world, striving for "perfect cosmic justice and fairness" often actually makes life less sensible and fair than using some wisdom to consider trade-offs and avoid extreme solutions. It seems better to use available scholarship money to help specific students with their education rather than waste it chasing interesting but pointless theoretical outcomes.

 

Public-school misunderstandings

The way this startup activity of informing families of scholarship possibilities and encouraging applications would probably be interpreted by the public school system as that the legislature had provided millions of dollars with the explicit purpose of trying to convince people to leave the public school system and enter some new private school system sponsored by the state.  If you are communicating specifically with every student who is now in the public school system, and trying to convince them to join in a private school system paid for separately by Utah scholarship money, what else would be public school system people think?

 

It seems like a very bad idea to start off this new program by thoroughly irritating the entire public school system and convincing those public-school people that all their worst nightmares about dissolving the public school system were about to come true because of this new bill.  All of that uproar, irritation, confusion, rejection, and political opposition is completely unnecessary if we look at the situation in slightly more general and objective terms.  There appear to be 106,000 students who are now living outside of the public school system, and have probably always been operating outside of the public school system for any number of reasons.  If we simply retitled this effort as a way to help with the education of all of these students who have never been part of the public school system, then who has grounds to complain? The state has a duty to educate them just as much as it has a duty to educate the currently existing public schools. Implementing this program with the focus on those kinds of "off the books" students is extremely easy to do and should cause no confusion and conflict.  This program will still only serve a small portion of those 106,000 students, so it should not be the slightest threat to any public-school people who actually understand what's going on.  I have suggested that the 5,000 students originally contemplated be expanded to about 12,000 students by varying the size of the scholarship awards to fit the actual need, but even at that expanded size, the program would still only be serving about 11% of the student body which currently has nothing to do with the public school system.  This new program could go on its merry way and be very successful, and the public school system people would see no effect whatsoever on their own operations.

 

 

 

 

Bio for Kent Huff: Born 1941, now age 81. Born and raised in Utah County, including Payson and Spanish Fork. Attended local schools and BYU. Studied mathematics, engineering, and political science. Moved to Washington DC to work for the Navy Department and attend law school. Received two law degrees focused on government regulation of the economy and taxation. Worked in contracts and computers for the Navy, as an attorney in the Interstate Commerce Commission, and in computers in the US House of Representatives, Department of Justice, Federal Trade Commission, Labor Department, Census Bureau, Treasury Department, and Department of State. Worked at embassies in Saudi Arabia, Mexico, and Russia as a computer consultant. Married Suzanne Snow from Palos Verdes, California. Six children, 9 grandchildren.