Cost Breakdown for Propostion 3: the State alone pays for the computers

Through the contract, the state is paying $292.77 per teacher/student for a managed service. This service includes a laptop device, maintenance, software, security, tech support, professional development for Idaho’s teachers and wireless in every Idaho high school. As you can see the majority of the costs in this contract are related to the services HP and its partners will provide to the state and our local school districts over the next eight years.


The funding for this contract will be phased in. When totaled, the state has signed an eight-year, $180 million contract. When broken down, this contract will never exceed more than 2% of the public schools budget in a given year. We will spend far more on other things in the budget like teacher salaries or transportation. Over the next eight years, for example, about 61% of the public schools budget will go toward salaries and benefits for educators. Another 5.9% will be spent on statewide pay-for-performance for teachers.


Here is how the contract breaks down over eight years:

· Year 1: 6,551 units serviced for teachers and school administrators. Amount: $1,917,936. (Please note: The Idaho Legislature already appropriated $4.5 million for this first phase including wireless.)
· Year 2: 33,941 units serviced for teachers, school administrators and first one-third of high schools deploying devices to students. Amount: $9,936,907. (Please note: Superintendent Luna has requested $12.9 million in his FY2014 budget request for this second phase including wireless.)
· Year 3: 61,879 units serviced for teachers, school administrators and first two-thirds of high schools deploying devices to students. Amount: $18,116,315.
· Year 4: 90,376 units serviced for fully deployment to teachers, school administrators and all high school students. Amount: $26,459,382
· Year 5: 90,376 units serviced for fully deployment to teachers, school administrators and all high school students. Amount: $26,459,382
· Year 6: 90,376 units serviced for fully deployment to teachers, school administrators and all high school students. Amount: $26,459,382
· Year 7: 90,376 units serviced for fully deployment to teachers, school administrators and all high school students. Amount: $26,459,382
· Year 8: 90,376 units serviced for fully deployment to teachers, school administrators and all high school students. Amount: $26,459,382


The contract also includes $5.5 million in upfront costs that are paid in the first few years for deployment and infrastructure. The $180 million contract figure includes a $14,167,060 buyout clause in case the state decides to sever the contract.


Here are some frequently asked questions we have received that might assist in understanding these costs:


How does this cost compare to the state’s original estimates?

In 2011, the Legislature did request 1:1 budget estimates for five years. The State Department of Education provided those budget estimates of $60.8 million over five years for devices and managed service of tech support, maintenance, and security. This did not include wireless. Wireless was in a separate budget line item and estimated at $2 million a year. Therefore, it would have been about $70.8 million over five years if the two had been combined.


The actual budget figures based on the contract are $82.9 million over the first five years. This includes the managed service, professional development AND wireless. The state agreed to this contract with HP after a competitive bidding and negotiation process through the Idaho Division of Purchasing that determined this was the best value for Idaho students and Idaho taxpayers.


The contract is eight years. The total cost over eight years is about $180 million. When totaled, the annual cost will never make up more than 2% of the public schools budget in a given year. Through Students Come First, the funding for this program is built into the funding formula going forward for Idaho’s public schools. Since it is part of statutory spend, the Legislature must provide funding for this program or change the law.


Will the state have to pay the $14.2 million buyout if Proposition 3 is repealed?
No. The buyout clause only kicks in after the state begins incurring costs. The state will not incur costs until after Nov. 6 so the state will not have to pay this buyout if Proposition 3 is overturned. There is other language in the contract to address what happens if Proposition 3 is repealed.


Thank you-



Tom Luna

Idaho Superintendent of Public Instruction









Supt. Tom Luna

Idaho State Department of Education

PO Box 83720

Boise ID 83720-0027

208-332-6815

trluna@sde.idaho.gov


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