10. THE MYTH THAT YOUR CONSTITUENTS SAVE $ WHEN FAMILIES MOVE TO PRIVATE SCHOOLS (April 14, 2016)

From: Julee Kaye
Sent: April-14-16

To: ‘educ.minister@gov.bc.ca’; ‘mike.lombardi@vsb.bc.ca’;
‘allan.wong@vsb.bc.ca’; ‘Janet.fraser@vsb.bc.ca’;
‘fraser.ballantyne@vsb.bc.ca’; ‘christopher.richardson@vsb.bc.ca’;
‘patti.bacchus@vsb.bc.ca’; ‘joy.alexander@vsb.bc.ca’;
‘penny.noble@vsb.bc.ca’; ‘stacy.robertson@vsb.bc.ca’;
‘david.eby.MLA@leg.bc.ca’; ‘andrew.wilkinson.MLA@leg.bc.ca’;
‘communications@vsb.bc.ca’; ‘nbrennan@vsb.bc.ca’; ‘jpearce@vsb.bc.ca’;
‘jstewart@vsb.bc.ca’

To VSB’s trustees & Superintendents, our Minister of Education, and my local
MLAs:

Subject: THE MYTH THAT YOUR CONSTITUENTS SAVE $ WHEN FAMILIES MOVE TO PRIVATE SCHOOLS (April 14, 2016)

Yesterday I was made to realize that there are people who view the VSB’s
failure to retain students in public schools as a victory on the road to
reducing taxes – people who might support cuts to attractive educational
programming not in spite of the likely loss of students to private schools
but actually because of that loss!

Therefore, let’s take a better look at how that could work. Here is the
punchline:

ONLY UBER-WEALTHY PARENTS COULD EXPECT A NET LIFETIME SAVINGS FROM CUTTING PUBLIC EDUCATION SPENDING AND USING PRIVATE SCHOOLS INSTEAD. In the case of $20,000-per-year private schools, a BC parent making $340,000/year would
need to see a 50% reduction in current education-related taxes in order to
balance the cost of private school fees for even one child. Parents at all
‘normal’ levels of affluence are much better off if the quality of public
schools is sufficiently high as to allow them to keep their kids out of
private schools.

And here then are the economics of education spending in one easy email:

Imagine a sample population of 200 taxpayers evenly divided into 4 groups:
50 taxpayers each of whom have 1 school-aged child, 50 taxpayers who expect
to have children in the future, 50 taxpayers who have adult children, and 50
taxpayers who will never have children (Parents, Future Parents,
Grandparents, and People with no Children).

If all 50 sample children are in public schools, then at current BC funding
levels the 200 sample taxpayers will bear a cost of $7,166/year for each
child’s education – a total of $358,000, or $1,790 on average per taxpayer.
Of course, no one wants to pay more than necessary so there is always
pressure to maintain efficiency in the school system.

But let’s look at one of the comfortably affluent parents, Votee McVoter,
who makes $200,000 per year. She pays $45,648 in federal taxes and $22,780
in provincial taxes. The province of BC spends 12% of its total budget on
education (1). However, BC’s education spending is equivalent of 33% of all
revenue from taxes (the province gets more than half its revenue from
natural resources, crown corporations, etc (1)). Using that larger
percentage, $7,530 of Votee’s provincial taxes are potentially being
collected in order to fund education (remember this number).

Votee has heard a lot of bad press about schools and is concerned that the
needs of her bright, compliant child will be overlooked in a large public
school classroom. She enrolls her child in her closest private school at a
cost of $20,000/year. Because BC provides only 35% as much funding to
children in the private school as to public school children (2), Votee’s
decision to put her child in private school will save the sample taxpayers
$4,658/year (65% of the base amount of $7,166), or about $23 each.

Who is happy about this? Certainly not the other parents, whose schools are
now somewhat less well funded than before (the incremental cost of having
Votee’s child in an existing class was much less than the amount of funding
now lost). Moreover, seeing Votee move her child to private school leaves
the other parents more worried than before that maybe public schools are not
good enough for their children either. However, some of the taxpayers who
currently have no children may be pleased with situation (depending on how
far-sighted they are).

One person who is certainly not happy is Votee. Her taxes have fallen by
only $23/year but she is now paying $20,000 extra in private school tuition!
She resents having to pay for other people’s children to attend the public
schools that her family is not using.

Over time, Votee and some others successfully lobby the province to reduce
total educational spending by one half. By this time, conditions have badly
deteriorated in public schools and one quarter of all students have moved to
public schools. The remaining three quarters of students are receiving much
less per-student support than before, and schools have also struggled to
adapt to the loss of their accustomed efficiencies-of-scale.

The sample tax payers are how spending only $179,000 on funding public
schools – yay! But the 12.5 private school parents in our sample are
spending $250,000 on private school fees, so total educational spending has
increased to $429,000 in the sample group as a whole. That’s $70,000 more
than at the start.

On the plus side for Votee, though, the 50% reduction in government support
for education means that portion of her tax bill falls by 50% – she is
paying $3,765 less in taxes every year (half of the number you remembered
above!). She tries to console herself about the $20,000 in annual tuition
fees by reasoning that the tax savings will apply to every year of her 35
year career but she will only have a child in private school for 13 years.

That adds up to $132,000 in lifetime tax savings over 35 years but $260,000
in increased private school tuition costs over 13 years. Oops. It didn’t
work. Votee sadly realizes that she would have been about $128,000 better
off if only public schools had been a little better funded and so had held
her faith.

So who is happy now? Certainly not the private school parents at Votee’s
level of affluence or below; by successfully lobbying for reductions in
education spending and switching to user-pay schools instead, they have only
succeeded in greatly increasing their lifetime spending on education.
Certainly not the public school parents, whose children’s schools are much
worse off. Not the future parents or grandparents, who see themselves facing
the same awful trade-off between massive spending on private school tuition
or letting their descendants flounder in the ill-funded public schools. Some
of the people with no children might be happy with their reduced taxes – an
average of $896 savings in our sample group – but even many of them would be
growing increasingly uncomfortable with the changes they see in society.

The majority of people will still want to raise children and educate them
well. The only parents who would see financial benefit from even 50% cuts to
public education spending with concomitant transfer of their kids to private
schools are parents making over $340,000. At that level, the amount of taxes
that they pay to support public education is much higher than what Votee was
paying so that a 50% reduction in that tax bill over an entire career is
sufficient to offset the $20,000/year in private tuition (for one child). Of
course, more modest controls on education spending will not support the
private school costs of even those parent.

In conclusion therefore, please let go of any mistaken idea that crippling
public school programming to further reduce enrolment could benefit a
majority of your constituents. Over a lifetime, any plausible level of tax
savings that could be achieved by driving families into private schools will
only provide a net benefit to very, very wealthy parents and people who
never have children. Everyone else will be worse off.

“Just Say No” to unreasoned program cuts.

Email me if you would like a copy of my spreadsheet.

Julee Kaye
(Concerned Parent from QEA, JQ, General Gordon, Kerrisdale, Kitsilano & soon
Point Grey)

!) http://bcbudget.gov.bc.ca/2016/bfp/2016_budget_and_fiscal_plan.pdf
2) http://www2.gov.bc.ca/gov/content/education-training/administration/legislation-policy/independent-schools/grants-to-independent-schools