(by Shawn Peterson)
December 3, 2014
In the last edition of this column, I shared about why education policy is a deeply personal issue for me, and why it was an important justice issue to promote authentic school choice for all kids.
This column addresses why the Minnesota Catholic Conference will join with other Minnesota educational choice advocates in the 2015 legislative session to encourage legislators to establish educational savings accounts and opportunity scholarship tax credits for Minnesota families.
Education Savings Accounts
Education Savings Accounts (ESAs) give parents the power to use their child’s state education dollars (per pupil aid) on a variety of educational options, including tuition and fees, textbooks, tutoring and other education-related services.
ESAs provide families with a debit card containing funds available for approved education expenses. Families are able to use the card to select and pay for the best providers of needed educational services.
MCC supports legislation that specifically focuses on ESAs for children with special needs, allowing parents to direct their child’s educational and therapy dollars toward services that provide the best educational results for their child. Currently, 10 states have programs that offer a type of ESA to families with special needs children.
Opportunity Scholarship Tax Credits
Opportunity Scholarship Tax Credits (OSTCs) give families greater access to high-quality nonpublic schools by providing tax incentives to businesses and individuals who choose to donate to an educational scholarship organization.
With OSTCs, companies and individual citizens receive tax credits for donating to qualified non-profit entities that provide scholarships for individual K-12 students, ultimately giving these children access to educational options that would have been financially out of reach for them or their parents.
Here is how OSTCs could work: An individual or corporation has a tax liability (the amount of taxes they owe to the state) of $10,000. With an OSTC program, the company would be allowed to donate a certain percentage — 80 percent, for example — to a qualified non-profit acting as a Scholarship Granting Organization (SGO). The SGO would then be able to use the monies collected to award scholarships directly to families who qualify under the legislation’s income guidelines. Those families would then be able to use the scholarship funds to attend the nonpublic school of their choice.
There are 13 states that have opportunity scholarship laws or similar programs, and several other states that are considering creating or expanding their state educational choice opportunities. From 2013 to 2014, a combined $551 million was spent nationally on scholarship programs, with an average scholarship amount of $2,282 per child for those enrolled in the various scholarship programs. These programs are spreading across the country because of demand and their rate of success.
Data show positive outcomes, savings for states
The data are showing that these programs are helping to increase graduation rates, college enrollment and academic achievement, especially among those most affected by the achievement gap.
In addition to positive educational outcomes for children, states are seeing taxpayer savings. In Florida, one non-partisan government office estimated that taxpayers saved $1.49 for every dollar lost in corporate income tax revenue due to corporate scholarship contributions. In other words, although a state may take in less tax revenue on the front end, the programs ultimately show a savings in funds spent on education, therefore reducing the overall state education budget expenditures.
Florida is not alone. In Wisconsin, the estimated taxpayer savings in 2010 was $46.7 million, and the estimated net fiscal benefit in fiscal year 2011 was $51.9 million.
Educational choice programs like these have the power to transform the lives of children stuck in failing schools. They are giving hope and future opportunity to kids, and are allowing parents to decide what school is best for their child.
A recent Friedman Foundation survey shows that a majority of Americans favor school choice programs. In the poll conducted last year, 60 percent favored vouchers, 64 percent favored ESAs, and 66 percent were in favor of tax credit scholarships.
By enacting these pieces of legislation, Minnesota would put the power to direct a child’s educational needs where it most belongs — in the hands of parents.
Making this important legislation a reality requires the persistent voices of all of us, including parents, teachers, students and concerned citizens. As we near the beginning of the 2015 legislative session, contact your Minnesota state elected officials.
Peterson is associate director for public policy of MCC.