McKeon: Open Enrollment: Good Intentions, Devastating Price Tag

By Aaron McKeon, NH Journal

Allowing families to choose their school is fantastic for education, something we fully embrace in Croydon as one of the state’s pioneering districts in school choice.

Open Enrollment has the potential to be a great advancement. But unfortunately, its proposed design will lead to terrible unintended consequences. In Croydon, it will most likely lead to a whopping 66 percent increase in property taxes. For everybody, it will remove local control of budgets, and there will almost certainly be major blowback.

Let me give you a concrete example of how this will devastate Croydon.

Next school year, Croydon will send 73 students to other districts under our Town Tuition program. Our contracts are typically $17,000 per student, a mutually beneficial number negotiated by both districts. If Open Enrollment passes, it will set the rate at a minimum 80 percent of per-pupil cost, which for Croydon is $27,000, and the resulting increase to our tuition expense would be $730,000. When added to the existing $1.1 million property tax, this amounts to a 66 percent increase in property taxes, completely unauthorized by Croydon taxpayers.

In a recent op-ed, Sen. Tim Lang states, “Open enrollment doesn’t replace established tuition agreements, regional schools, or AREA plans.” Although technically true, this is misleading. What incentive will receiving districts have to maintain their tuition agreements? Most of Croydon’s tuition agreements expire after only one year and can simply be left to lapse, forcing Croydon into the more expensive Open Enrollment option.

The problem is not the intent of Open Enrollment – the intent is great! The problem is the price tag being attached to it. There is no reason to charge 80-100 percent of the fully loaded per-pupil cost, because this does not reflect the true cost of the incoming student. By Sen. Lang’s own words, “Each year, the school board considers the school’s capacity to accept students without adding more staff.” In other words, districts can limit enrollment so that no additional resources (i.e., costs) are required. Therefore, if a receiving district does not need to add more staff, buy more buses, hire more administrators, or build new facilities, this pegs the actual incremental cost of each student much closer to zero.

Similarly, when a student leaves one district for another, the sending district doesn’t fire any teachers or cancel any bus contracts. Put simply, the cost of running both the sending district and the receiving district remains largely unchanged.

The solution to the funding issue is, therefore, surprisingly simple. The tuition rate should not be set at 80-100 percent of the all-in per-pupil cost. It should be set at the state adequacy amount, which is typically closer to $4,000. This still provides financial incentive to receiving districts without punishing sending districts (districts are used to losing adequacy aid when a student leaves). As for students with special needs, the receiving district should be able to charge this as extra to the sending district, a practice that is standard operating procedure in town tuition agreements.

Some say this may disproportionately benefit town tuition districts such as Croydon, but this is not the case. Croydon and other similar districts would still have an incentive to enter into tuition agreements to gain priority access for their students. Competing with other districts for Open Enrollment seats leaves too much to chance when the district doesn’t have a school of its own.

Instead of pitting districts against each other by creating conditions that lead to revenue chasing, we should allow free movement of children between districts in a way that doesn’t disadvantage either district. Only then can school choice reach its full potential.

Aaron McKeon is chairman of the Croydon School Board. He wrote this for NHJournal.com.

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.