## Wednesday, February 25, 2009

### Spreadsheets to the Rescue, Part 2

Second in a two part series.

In the first of this series The Other Dunwoody challenged the citizens of Dunwoody to take the city to task just as they have the DeKalb County School System. In this, the second part, we will hop, skip and jump through the minefield known as Public Education. In keeping with the title, we'll focus on the financial aspects discussing the operational characteristics at a later time and leaving the more philosophical aspects of this great entitlement for your own discussion.

Some facts:
• 2009 DCSS approved total expeditures: $1,174,700,781 (That's right, 1.1 Billion USD) • 2009 anticipated K-12 enrollment: 101079 students • 2009 DCSS millage rate 22.98 • 2007 median household income for 30338:$111,884
• 2007 median house/condo value in 30338: \$467,426
• State income tax rate is 6%
Some assumptions:
• the average family with children in public school is consistent with the above income and home averages
• one half of state income goes to support K-12 education
• a reasonable long-term rate of inflation is 4%
Now, the model requirements:
• determine the total education costs by number of children in the household (1,2,3,4,5)
• determine the DCSS property tax on the median home
• determine the state income tax on the median income (assume it is all taxed)
• determine the amount of state income tax dedicated to education
• determine the total annual household contribution to the education system
• calculate the number of years it would take the average household to pay back their children's education cost (for 1,2,3,4,5 children), assuming no interest, no inflation
In and of itself this is a pretty interesting model[1]. It provides some startling revelations:
• It is highly unlikely that anyone with children in DeKalb public schools pays the annual cost to the county.
• It is equally unlikely that anyone with two or more children in DeKalb public schools, even in upscale locales like Dunwoody, will ever pay back the cost of educating their children.
• Without adjusting for inflation (which only really counts after your children graduate since it applies equally to house values and education costs) it takes the average Dunwoodian almost 50 years to pay off their education debt.
• The per-student cost greatly exceeds any voucher amount proposed by politicos.
• These proposed voucher amounts, for a single student, greatly exceed the taxes paid.
• If it is this bad for the Dunwoody demographic, it must be much worse for some parts of DeKalb.
Regardless of your views on public education, the application of a little critical thinking reveals that it is the planet's largest entitlement program.

TOD

Notes:
1. This model is presented as an OpenOffice workbook. If you are not using OpenOffice, now is a good time to start.