# 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.

 Table 9. Loss of State Revenue Under UTTC Plan Year UTTC Plan: Alternative School Students State Per-Pupil Grant Guarantee Maximum Tax Credit As Share Of Per Pupil Guarantee Maximum Tax Credit Per Student Utilization Ratio Weighted Avg. Tax Credit Per Alternative Student UTTC Plan: Loss of State Revenue Due to Tax Credits 1998 220,000 \$5,608 0% - 0.95 - - 1999 257,400 \$5,776 10% \$578 0.95 \$549 \$141,246,397 2000 297,924 \$5,949 15% \$892 0.95 \$848 \$252,582,239 2001 332,294 \$6,128 20% \$1,226 0.95 \$1,164 \$386,897,558 2002 370,193 \$6,311 25% \$1,578 0.95 \$1,499 \$554,943,275 2003 408,273 \$6,501 30% \$1,950 0.95 \$1,853 \$756,466,323 2004 449,875 \$6,696 35% \$2,344 0.95 \$2,227 \$1,001,648,443 2005 495,319 \$6,897 40% \$2,759 0.90 \$2,483 \$1,229,862,050 2006 539,999 \$7,104 45% \$3,197 0.87 \$2,781 \$1,501,864,128 2007 588,354 \$7,317 50% \$3,659 0.85 \$3,110 \$1,829,662,343 2008 593,613 \$7,536 50% \$3,768 0.85 \$3,203 \$1,901,395,367