Effects on Revenue and Expenses

To model the effect of the UTTC on state and local finances, the model calculates revenue and expenses under both the current system and the UTTC plan. Under the current law, state per-pupil expenditures equal the per-pupil guarantee multiplied by the number of students in traditional public and charter schools. Under the UTTC plan, the model calculates this amount as well as the state revenue loss due to the tax credits extended to individual and corporate taxpayers who pay alternative school tuition.

There are some additional expenditures, approximately $1.3 billion per year, that the taxpayers are now paying for the public school system. Since it is unlikely that this amount would go away or change substantially under the UTTC system, these costs are not included in either scenario. ⁹⁹

Table 9 on the next page shows the loss of tax revenue due to tax credits under the UTTC plan. The first column shows the number of alternative school students, which grows from 220,000 to almost 600,000 during the ten-year period. This table then shows the maximum tuition tax credit as a share of per-pupil revenue and the maximum tuition tax credit per student.