Tax Credits to Fund Private School Tuition?
Two prominent Texas Republicans have unveiled sweeping proposals for overhauling the state’s education policy. One measure would create a private school scholarship fund, but they’re not calling it a voucher system.
The influential American economist Milton Friedman introduced the concept of school vouchers in the 1950s. He argued for decades that schools would be more responsive to children in the classroom if parents had more power to decide where their kids went to school.
“There’s a very simple scheme for doing so,” Friedman said in this Harlem speech from the 1970s. “If you relieve us of the expense of schooling your child, we will give you a voucher, a piece of paper, which you may use for one purpose and one purpose only, to pay the cost of schooling your child in any school you want to go to.”
Fast forward to today – and more than 20 states offer some form of school choice program. Most of them are government-funded vouchers.
But in Texas, voucher supporters haven’t been able to pass a law, even though they’ve been trying since the 1990s. Their free-market argument has run headlong into competing principles, such as academic accountability and fiscal responsibility. Private schools aren’t subject to the same regulations and transparency as public schools.
But the window of opportunity opens again in January when the legislative session begins. Yesterday two Republican Senate leaders, Dan Patrick of Houston and Lt. Gov. David Dewhurst, offered a preview of their agenda.
“We’re going to allow business to deduct up to 25 percent of what they would pay in the franchise tax,” Patrick said. “And that money would go to a nonprofit to be distributed to families based on need. By doing this, we are going to give an opportunity to get a scholarship if they so choose, to send their child to that private school.”
So instead of giving a voucher directly to students, the state would give a tax credit to businesses who fund private school scholarships.
It’s not exactly a new idea. Those so-called tax-credit scholarships already exist in about a dozen states, according to Milton Friedman’s foundation. But here’s where the politics get tricky. Those tax breaks mean less money for the state’s general revenue fund, the same fund used to pay for public education, as Dewhurst acknowledged.
“Although we haven’t worked out the details, we’re going to be looking very, very hard at not only our budget process next year, but we’re also going to be looking at our forecast for economic growth and make sure that doesn’t step on our budget,” Dewhurst said.
That explanation was not enough to quell the concerns of some public education activists.
“They’re basically shifting public funds to support private schools,” said Allan Weeks with Save Texas Schools. “I love private schools, I’ve even taught in private schools, I think they have an important place to play. This is not where the state should be involved, especially when we’re cutting billions out of public education.”
The scholarship plan is one of many proposed changes to education policy that Patrick and Dewhurst unveiled yesterday. The details haven’t been announced, and their legislation hasn’t been filed.