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Tax Credits for Scholarships to Private School are on the Rise
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"We know what is not working," Kevin P. Chavous of Democrats for Education Reform reminded listeners at a recent forum on school choice. The District of Columbia, where Chavous served as a city council member, demonstrates some of the most disappointing education outcomes in the nation, despite spending $26,555 per student this year. "Anything that is remotely different will get pushback from the status quo, even if the status quo isn't serving children," said Chavous.

Chavous and other reformers met in D.C. to discuss the growth of tuition tax credits for private schooling, a school choice reform some are calling "neovouchers." Six states have begun to offer tax credits to individuals who donate money to nonprofit, privately run programs that give tuition scholarships for private schooling. The six states are Arizona, Florida, Georgia, Iowa, Pennsylvania, and Rhode Island. Some of these states also offer such tax credits to businesses.

Kevin G. Welner, author of NeoVouchers: The Emergence of Tuition Tax Credits for Private Schooling, estimates that 100,000 students are now receiving financial aid to attend private school under state tax-credit policies. Less than half that number receive tuition assistance through publicly financed voucher programs.

Arizona, Florida, and Georgia offer tax credits equal to 100% of the amount donated. The other states credit between 65% and 90% of the amount donated.

Tuition tax credits offer several important advantages over voucher programs. Some conservatives fear that voucher programs might ultimately give the government more control over private schools, since tuition scholarship money comes out of public coffers. Voucher programs also appear to be more vulnerable to legal challenges than tax credits are. In 1999, the Arizona Supreme Court found no problem with one of that state's tuition tax credit programs, whether the donated money allowed students to attend secular or religious private schools. Opponents of vouchers have repeatedly attacked the use of vouchers at religious schools. Since parents, not government entities, select the school their children will use a voucher to attend, the case that vouchers violate the establishment clause is very weak; but such accusations have nevertheless impeded the growth of voucher programs.

According to Welner, tuition tax credits are "relatively unencumbered by the [political] baggage of past voucher battles." This raises the question of whether Welner's term, "neovouchers," is the best one for advocates of tax credits to use. That term is bound to carry with it the same "baggage" that Welner references with respect to the term "vouchers."

Welner himself is ambivalent about the trend he chronicles in his book. He acknowledges some advantages that tuition tax credits seem to offer, but is sympathetic to school choice opponents who fear that any growth in private education will come at a cost to the quality of public education — what Welner, at the recent D.C. forum, called a "cycling downward" in the quality of public schools. Sheila Simmons of the National Education Association agreed. "We have to look at the masses of children," said Simmons. "We need to change public schools, we need to change public education."

Simmons also argued that the private sector is too small to serve the large number of children who are not receiving a good education in public schools. Adam B. Shaeffer of the Cato Institute acknowledged that "the capacity issue is a serious one." He said it would take time for private schools to grow, and for new schools to open. "If you actually free the money up and give parents control over that money and they start choosing private schools," Shaeffer contended, private education will grow to meet the demand. (Education Week, 1-7-09)

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