Ohio

Eye on Education

Topics

Not Vouchers: Tax Credit Scholarships

Background

Tax credit scholarships are programs that rely on public dollars to subsidize private-school tuition. They work by giving individuals or corporations a break on their state tax bills if they donate to organizations set up just to award private school scholarships.

They are different from voucher programs because the scholarships are funded directly through private donations.

Ten states have laws on the books allowing tax-credit scholarships, and at least 17 others have considered proposals to create them this year, according to the National Conference of State Legislatures.

The first tax-credit scholarship program was established in Arizona in 1997. A total of nine states, including Indiana, Florida and Pennsylvania, have similar programs in place, according to the National Conference of State Legislatures, though details including how the programs are funded and which students are eligible vary from state to state.

In 2012, bills were introduced in the Ohio House and Senate to establish a tax credit scholarship program in Ohio, but did not get far in the legislative process. Those bills were modeled in part on Florida’s policy.

The Pros

According to the National Conference of State Legislatures:

Tax credit programs provide an alternative to school voucher programs. Supporters of tuition tax credits say they save the state money because annual tuition at a private school is typically less than the per-pupil cost at public schools. This is shown through a nonpartisan analysis of the Florida Tax Credit Scholarship Program. It reported for every $1 spent on the tax credit program, Florida taxpayers saved an estimated $1.49. However, the report notes that the state’s savings is dependent on a proper balance between the cap on the tax credit and the number of qualified students participating in the program. In other words, if the cap is too high, and not enough students participate, the lost tax revenue will be higher than the savings in education funding.

The Cons

Again, according to the National Conference of State Legislatures:

Opponents of tuition tax credit programs argue that private schools are not as accountable to state and local education achievement standards as public schools. Some states have accounted for this by requiring participating private schools to administer and publish results from a nationally recognized standardized test. Many critics also oppose allowing scholarship recipients to attend private religious schools, claiming it is a violation of the separation between church and state. Some school tuition organizations allow scholarship recipients to attend only specified religious schools. Lastly, the National Education Association points out that moving students from public to private schools harms school districts because they cannot reduce their fixed facilities and transportation costs in proportion to the number of students who leave.

 

Latest Posts

The Other Way Ohio Legislators Want to Expand Private School Scholarships

State Rep. Bill Patmon (D-Cleveland) cosponsored this year's tax credit scholarship bill along with state Rep. Andrew Brenner (R-Powell).

Ohio legislators are pushing a double-barrelled attempt to expand publicly subsidized scholarships that allow students to attend private schools. In this year’s state budget, Gov. John Kasich proposed an expansion of Ohio’s existing voucher program that would make half of Ohio children eligible for private school vouchers. Now state legislators have reintroduced a bill that would [...]

Three Ways Ohio’s Proposed Statewide Voucher System Differs from Existing Voucher Program

Quy Nguyen DaiNGUYEN DAI / Flickr Ohio already has a voucher program that uses public dollars to pay for private-school scholarships for students attending low-performing schools. It’s called the EdChoice program. (There are separate voucher programs for Cleveland students and for students with autism or other special needs living in any district.) Now state lawmakers [...]

How Publicly Funded Private School Scholarships Could Reach a District Near You

A group of students talk at a private school.

Today, Ohio students who attend low-performing public schools can get publicly funded scholarships – or vouchers – to attend private schools. Legislation to expand those private-school scholarships to children throughout the state is now working its way through the Statehouse. And the scholarships would have an unusual funding source: tax credits.

About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »

Economy
Education