There’s no question that the problem of serious government revenue shortfalls changes the education policy debate at the State Capitol. But precisely how? And to what extent?
Representative (perhaps soon-to-be Senator) Kevin Lundberg is floating a new version of his educational property tax credit proposal. Last year he led the futile charge for HB 1081, which would have reduced a family’s property tax bill up to $1,000 in support of qualified education expenses-including private school tuition.
The difference is that 2009 may bring a new and compelling selling point to the tax credit bill: a potentially significant cost savings to government. During these challenging economic times, statehouse leaders are looking for ways to pinch pennies. Education tax credits simply offer one family-friendly way to achieve savings.
The Cato Institute’s Adam Schaeffer explains the value of this policy prescription:
There is a way to avoid getting slammed by huge new demands for public school spending while saving money and improving education: A broad-based, moderate-size education tax credit would help families stay in private schools and save their children from burdening taxpayers with the public schools’ (much greater) price tag. The credit would also help others make the switch to the private sector, easing the burden on taxpayers even more.
Education tax credits reduce the amount a taxpayer owes the government for each dollar he spends on his child’s education or on scholarships for children who need them. That money comes straight off a person’s tax liability, so it’s a dollar-for-dollar benefit: You can send it to the government or use it on the kind of education you want to support. Tax credits for donations to scholarship organizations help support school choice for lower-income families, while personal-use credits help middle-class families send their children to good schools.
Analysts are scheduled to release a financial forecast Friday that may not bode well for the coffers of state government. One is left to wonder whether current economic realities will move the needle at all on the school choice debate in the state legislature.
Now look, I’m no starry-eyed optimist. To rate the chances of passing Lundberg’s tax credit proposal as a longshot may be generous. But maybe not: In the legislature, desperate times call for reasonable measures. Will the new reform-friendly House Speaker grant the tax credit bill a fair debate or send it to a committee to die? Will the new Colorado chapter of Democrats for Education Reform give cover for even a few elected members of their party to give it a chance?
Just a couple more questions for school reform observers to ponder as the 2009 legislative session draws into view. Private education tax credits and public education reform shouldn’t be an either/or choice. Colorado can walk and chew gum at the same time. And tax credits promise to leave more money available for other reforms, too.
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Ben, May I pose a couple of questions? It may come across as devil’s advocacy, but I am just learning about tax credits and want to understand it better.
So, what you are saying is that if Bob puts his kid in private school he gets $1000 and the public school is spared the expense of schooling him. This is saving the taxpayer $ as less kids would be in the school district. Correct me if I have it wrong? So while vouchers were an issue for some who claimed they did not want their tax $ to fund private schools, this would fix that since the taxpayer wouldn’t be paying for the kid in private school at all?
Kevin Welner, a professor at CU, is an expert on tuition tax credits and has just published a book on the subject.
He does a good job of explaining this complex topic in this Education Week commentary:
http://epicpolicy.org/files/Education%20Week_NeoVouchers.pdf
Karin,
I think you have described the basic gist of the issue quite clearly.
Holly,
Kevin may be an “expert on tuition tax credits,” but he also is opposed to school choice. So to clarify, reading his piece might provide balance to the links I provided, but it certainly isn’t a balanced approach in itself. I would only say “he does a good job of explaining this complex topic” if I had no concern for hearing the arguments for tuition tax credits.
Regardless of Kevin’s views on neovouchers(which are clearly stated in this piece), I still maintain that this particular piece does a good job of explaining what a tuition tax credit is in accessible language, which is no easy feat, given the complexity of this type of policy. It also makes the important point that we need more data on these vouchers in order to figure out whether or not tuition tax credits are fulfilling their intended goals. Kevin includes several suggestions for the type of data that states might collect in order to effectively evaluate tuition tax credits. Why does this matter? If Colorado does go in this direction, I think it is crucial that, starting from Day 1, we collect information that permits policymakers to decide whether this approach saves money and improves education.
Holly,
Fair enough (though I find it interesting you so facilely adopt the unusual handle of “neovouchers” that Kevin uses in his article). I have no argument with collecting data and answering the questions he proposes. But I also wouldn’t jump to the conclusion that his list of questions is exhaustive, nor that research hasn’t already been done to give preliminary answers to some of the questions. For example, the Pennsylvania & Florida corporate tax credit scholarship programs – as well as the Arizona individual tax credit scholarship program – all have realized significant savings to the state: http://www.friedmanfoundation.org/friedman/downloadFile.do?id=243
To the best of my knowledge, there indeed has been more research done on traditional vouchers than tuition tax credits, concerning questions of academic achievement, effects of competition, and results for segregation / stratification & values of democratic citizenship. This is a good place to start, and you can delve deeper: http://jaypgreene.com/2008/12/17/school-voucher-mythbusters/
(I know these are written by school choice supporters, but feel free to balance out their readings and judge the research on the merits.)
Hello Ben and Holly.
I’m arriving late to this conversation, but I do want to clarify a couple things. First, while the opinion piece is essentially critical, the book itself is far more balanced.
The only published review thus far was written by Richard Fossey, a Commissioner on the Texas Catholic Conference Accrediting Commission who supports neovouchers. (The review is in the journal “Teachers College Record,” from Columbia University.) I’m happy to report that he found it “even-handed” and “commendably balanced, pointing out the strengths and weaknesses of tuition tax credit schemes from both a political and public policy perspective. In fact, Welner seems sympathetic to school choice advocates who want to strengthen private school alternatives to public education.”
Similarly, at a panel discussion of the book earlier this month at the American Enterprise Institute (AEI), Adam Schaeffer of the Cato Institute also had kind things to say about the book (although he, like you Ben, didn’t like the term “neovouchers”).
Concerning the various claims made above, the issues are truly much more complex that Ben or the Friedman Foundation seem to be claiming. Neovouchers do have the potential to result in overall taxpayer savings, but they also have the potential to add to taxpayer expenditures. The latter is almost surely the case in Arizona, the place where this policy began. Florida and Iowa are probably the states with the greatest potential for the policy to realize “savings.” It all depends on the specific rules in each state.
But the most important point is the one raised by Holly, and one that I tried to make in my commentary: these laws are designed in such a way that taxpayers and policy makers will never really know how much they’re costing or saving (notwithstanding the Friedman efforts to claim otherwise).
Anyway, read the book. It’s short, and it’s great reading.
Cheers, Kevin
Forgive me for being a tad paranoid here, but I wonder where the term “neovoucher” comes from. Perhaps it’s a subliminal attempt to tar the idea by associating it with neoconservatives, widely blamed for the mess in Iraq?
I’ll grant that both tax credits and vouchers help parents take their children from government-run schools and put them into privately run ones. but there are enough philosophical, legal, and practical differences between them that they shouldn’t be named (nearly) the same thing.
Hello John. The book’s title and the use of the neovoucher term have a long and winding history. And the term definitely is intended to reference the fact that the tax credit mechanism was intended to replicate voucher policies. (That history and the means and nature of replication are explained in detail in the book.) But rest assured that there is nothing subliminal or Iraq-related — the term “neo” is used in a wide variety of ways in our field (and other fields), with both positive and negative connotations (depending on one’s perspective). So we have neoliberal, neoclassical, etc. Cheers, Kevin