Wednesday, October 29, 2008

A numbers mistake about the cost of the Waterford program in SB 2—It’s worse than I thought…and further illustrates why the omnibus bill is misleading

I made a mistake and stated that $1,000,000 was being allocated towards Waterford software and computers in the portion of SB 2 that was formerly HB 200. The actual impact is at least 3 ½ times worse just this year 6 times worse over the next 3 years. The legislature allocated $1,000,000 in one time money and $2,500,000 in ongoing money from the Uniform School Fund to the purchase of this software and implementation of the program. That ongoing funding is for at least 2009 and 2010, and I can’t figure out if the funding is repealed before 2014 or if “ongoing” is an indefinite term. Maybe a smarter person than me can help clarify.

I am sorry about the error. It was an honest mistake. I’m going to explain what I was looking at and thinking. The maze of statutory language mixed in an omnibus bill of over 1000 lines is a little confusing and I have spent some significant time reading and trying to connect the dots. Let this tangled web stand as refutation to Senator Stephenson’s claim it was just a “time-saving tool” “to reduce confusion.”

While typing my post, I had separate tabs up with both the text of HB 200 and SB 2 displayed AND two more tabs with the respective fiscal notes of HB 200 and SB 2. (Those links all go to slightly different places. For the “main menu” of each bill from which you can access the above information, audio/video of the debates, and the timeline of who voted for the bills and when, here is yet another link to HB 200 and SB 2.)

I often use the fiscal notes attached to bills—intended to be clear graphical statements of the cost of each bill without digging through all of the bill’s legalese—to quickly see the financial impact and where the money is coming from. However, I think the fiscal notes of these two bills and my error demonstrate another reason why the omnibus bill was a dishonest method to pass 13 separate bills and make it more difficult for the public to evaluate the work of their representatives. Notice that the fiscal note for HB 200 is clear and to the point--$1 million this year and $2.5 million for the next two years, each from a distinct fund. (Though even that may be a little misleading—the “ongoing” money seems to go beyond 2010.) Now look at the fiscal note for SB 2. It allocates almost $5 billion over 3 years from a combination of 5 different funds. There is no way to distinguish the cost or funding source for any one aspect of this 1185 line bill (40 printed pages according to the Daily Herald’s omnibus support board.) from the summary. The overall total is no doubt important in ensuring the legislature stays on budget, but in this case it hides the cost of the individual programs. This is surely one of the reasons the Utah State Constitution mandates that “no bill shall be passed containing more than one subject, which shall be clearly expressed in its title.”

So I was looking at the text of the two bills when I inadvertently pulled a mental switcheroo. The HB 200 text has the funding right at the end, lines 204-224. The Waterford section of SB 2 runs from lines 259 to 397. While flipping back and forth, I mistakenly thought that HB 200 had been copied verbatim into SB 2 and somehow got it firmly in my head that the first year funding from HB 200 (lines 215-218) was the overall allocation for the bill as newly constituted in SB 2. I just thought that the legislature had reduced the funding when rolling the bill into the omnibus schmorgasboard. I had missed that the SB 2 version was shorter than the original. Line 397 in SB 2 is the equivalent of line 194 in HB 200—the final 30 lines of HB 200 were missing.

I found that lines 195-224 in the original bill, a confusing bunch of repeal dates and the funding, had been snipped, split, and re-pasted into two separate places at the very end of the omnibus bill, lumped together with the funding for 10 other bills and separated from the language of the original by almost 700 lines of dense statutory code. Again, this wasn’t a problem in the original, stand-alone bill that wasn’t mixed with other proposals.

The $1,000,000 dollar one time money allocation for this year only is tucked into lines 1103 and 1108-1109 of SB 2.

Lines 1057-1078 of SB 2 contain the repeal dates and the ongoing allocation of $2.5 million a year. The repeal dates are where I get confused about how many years the $2.5 million lasts. Remember the bill uses the term “ongoing,” but the original fiscal note only detailed $2.5 million for 2009 and 2010. Lines 1059-1067 of SB 2 contain 7 sections, subsections, or titles and 7 different repeal dates. The complicated numbers on the sections are similar to the numbers on parts of the bill, but don’t look to me to match those in the bill. What are these 7 lines repealing? The funding? The program? The audit? I don’t know. Line 33 of the Highlighted Provisions on the original HB 200 states that the pilot program is repealed on July 1, 2014, but doesn’t clarify what all those repeal dates before 2014 mean. If they repeal other things (interesting bit of reverse earmarking if so), then is the $2.5 million to Waterford mandated until 2014? Here’s the actual lines from SB 2:

1057 Section 26. Section 63-55b-153 is amended to read:
1058 63-55b-153. Repeal dates -- Titles 53, 53A, and 53B.
1059 (1) Section 53-3-210 is repealed February 1, 2007.
1060 (2) Section 53A-1-403.5 is repealed July 1, 2012.
1061 (3) Subsection 53A-1a-511 (7)(c) is repealed July 1, 2007.
1062 (4) Title 53A, Chapter 1a, Part 10, UPSTART, is repealed July 1, 2014.
1063 [(4)] (5) Section 53A-3-702 is repealed July 1, 2008.
1064 [(5)] (6) Section 53A-6-112 is repealed July 1, 2009.
1065 (7) Subsection 53A-13-110 (3) is repealed July 1, 2013.
1066 [(6)] (8) Section 53A-17a-152 is repealed July 1, 2010.
1067 (9) Section 53A-17a-162 is repealed July 1, 2012.

This is where I would love someone knowledgeable in the arcane to step in and explain what these repeal dates refer to.

And finally, how does this impact my analysis of how many kids will be served this year—I don’t know. Here are lines 1068-1078:

1068 Section 27. Ongoing appropriations.
1069 (1) As an ongoing appropriation subject to future budget constraints, there is
1070 appropriated from the Uniform School Fund for fiscal year 2008-09, as follows:
1071 (a) $2,500,000 to the State Board of Education for UPSTART as provided in Title
1072 53A, Chapter 1a, Part 10, UPSTART, including costs of:
1073 (i) a home-based educational technology program provided by a contractor;
1074 (ii) computers, peripheral equipment, and Internet service for families who cannot
1075 afford the equipment and service;
1076 (iii) administrative and technical support provided by school districts;
1077 (iv) an audit of the contractor's use of funds appropriated for UPSTART; and
1078 (v) an evaluation of the home-based educational technology program;

Item (i), the actual Waterford program, costs $3400 to install on a given computer. My original thought of just dividing the total by that $3400 gives us the same 294 for the first year and 735 households served statewide for the 2008-09 year. I knew it was a rough estimate because of other costs, but it turns out it was much too rough. Item (ii), computers and decent internet service (dial-up will presumably be too slow for the interactive Waterford program) for low income households will be expensive, along with item (iii), the technical support. Further explained by lines 331-337:

331 (3) A school district that participates in UPSTART shall:
332 (a) receive funding for:
333 (i) paraprofessional and technical support staff; and
334 (ii) travel, materials, and meeting costs of the program;

Not all low income households will need a computer and internet, but they have to be provided for the ones that do. At least 30% of the participants must come from low income households (Lines 342-349 in SB 2). (The low income households increase costs, but arguably much better meet the goal of targeting low readers who aren’t ready for school than the “diverse” 70% from higher income households.) Let’s make some extremely ballpark estimates. If around 600 households were provided software and about 200 of those were low income, how many would need computers and internet service? What type of computer would be bought and at what bulk discount for the state? How many households will have a suitable computer and just need internet? And how much administrative and technical support will these families less familiar with the technology need? It seems impossible to tell since the selection process is very broad (Lines 312-319, 340-341). I don’t know what technical support staff costs, but from experience with school technology snafus (including some laptops completely failing and erasing a term’s worth of grades just last week at my school), at least a moderate-sized staff would be needed to service laptops being used in all kinds of home settings. Paraprofessionals are relatively cheap to hire, but quality and retention/retraining are constant issues, and again I don’t know exactly how to evaluate how many would be needed. Many of the families would need training and help with the program.

Finally, items (iv) and (v), the audit and “evaluation” of the program can take up to 7.5% of the funding (Lines 373-375). That’s up to $187,500 from the raw $2.5 million, but would be less than that because of some exclusions.

It also makes sense to assume that the one time $1,000,000 in the first year will be used largely to buy the computers and peripherals because those aren’t continuing costs. This would decrease the number of students served the first year, but possibly allow for an increase in the number of students able to be served by the ongoing $2.5 million. So I would estimate that eventually between 600-650 households could be served for the cost of $1 million this year and $2.5 million for at least the next two years after that. It looks like after the other costs, hundreds of thousands of dollars of that money will go to Waterford this year, and between $1.5 million and $2 million each year after that.


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