A close analysis of public and private school costs shows that commonly-used measures
do not accurately reflect the true costs of educating children in the two systems. Neither
the prevailing "tuition" costs nor the commonly discussed "per pupil
expenditures" fully take into account all costs.
In the government school system, Michigan anticipates a per-pupil "guarantee"
or "foundation allowance" of about $5,445 per pupil in fiscal year 1998.72
Some school districts will spend less, and others much more, so that the average revenue
is about 6 percent higher than that.73 An approximation of 1.6 million students
multiplied by the formula guarantee yields an estimate of over $9 billion in direct
per-pupil expenditures annually spent on public education. Adjusting for per-pupil
expenditures above the guarantee brings the total to over $9.5 billion.
Even that amount does not include categorical and intermediate school district
expenditures of roughly $1.3 billion annually, nor some federal funds, nor other local
taxpayer sources. Adding these yields current expenditures for Michigans government
school system that exceed $11 billion annually. 74
The taxpayers also provide additional direct and indirect support of public schools.
For example, taxpayer dollars help provide land and facilities for the school system,
along with government services, without those facilities contributing to the local tax
base.75 Government agencies in Michigan pay no property tax, no sales tax, and
no income or single business tax; further, they borrow money at tax-exempt rates.76
All these costs are indirectly paid for by the taxpayers, and many do not appear in the
accounting for expenditures. Thus, the actual burden of the government school system on
the taxpayers is significantly higher than the foundation allowance might imply.
Private school tuition is about half that of the average per pupil revenue of public
schools. Private school tuition in Michigan averages about $2,500, with significant
variation among schools.77 This amount is much less than half of the
expenditures of the public school system, which is consistent with the national pattern.78
However, just as the per-pupil expenditure for public schools is a significant
underestimate of the government school costs, private school tuition also underestimates
private school costs. Most religious schools receive significant contributions from their
sponsoring organizations to support their operations. Many also receive volunteer time and
services from parents. Furthermore, those same parents often face fees for their
childrens participation in extra-curricular activities such as sports, music, and
various student clubs.79 Thus, while private school tuition is often half or
less than the commonly discussed per-pupil expenditure figure for public schools, actual
costs are a larger share. Once all private and taxpayer-funded costs are included for both
systems, the ratio of total public school costs to total private school costs is less
clear, but is probably about 2:1.
It should be noted, however, that the prime motivation behind the movement to parental
choice in education is not efficiency or the need to save money, but the desire to improve
the education of children.