School choice is expanding

COMMENTARY Education

School choice is expanding

Jun 13, 2007 2 min read
COMMENTARY BY

Former Senior Policy Analyst

Former Senior Policy Analyst

Ten years ago, Arizona lawmakers enacted an innovative program to give taxpayers control over how a portion of their tax dollars are used to support education. More than 70,000 Arizona taxpayers are now taking advantage of this opportunity to support parental choice in education. And other states are taking notice.

Since 1997, Arizona taxpayers have been able to claim a dollar-for-dollar state income tax credit worth up to $500 for contributions to nonprofit organizations that fund scholarships to private schools. The program was recently expanded to allow married couples to contribute up to $1,000 and receive the same dollar-for-dollar credit on their state tax bill.

The program has grown dramatically in the past decade. According to the Arizona Department of Revenue, more than 73,000 taxpayers (about 5 percent of those eligible) have donated $51 million for scholarships through the program. This year, voluntary tax credit donations are funding more than 24,000 scholarships, at an average size of $1,600.

Altogether, the tax credit program has provided nearly 150,000 scholarships since 1998. The program has helped thousands of families who were struggling to keep their children in private schools and allowed thousands more children to find better opportunities outside of the traditional public school system.

The success of Arizona's program hasn't gone unnoticed in other states. In 2001, Pennsylvania and Florida enacted programs that provide businesses with tax credits for donations to nonprofit groups that fund scholarships. In 2006, 30,000 students in Pennsylvania and more than 14,000 students in Florida received scholarships funded by corporate donations.

Last year, Iowa and Rhode Island enacted tax-credit programs. In Iowa, then-Gov. Tom Vilsack signed legislation to create a partial income tax credit for individuals who fund private school scholarships. Rhode Island created a similar scholarship tax credit for corporations. Similar initiatives are being considered by legislators in a number of states, including Maryland, Missouri and New Jersey.

While the Arizona program has become a national model, it has only begun to deliver on its promise. Scholarship organizations like Arizona School Choice Trust, which exclusively serves low-income students, report long waiting lists for scholarships. Despite the program's success, many more children could still benefit from the opportunity to attend a school of their parents' choice.

To address this demand, Arizona lawmakers expanded the scholarship tax credit program in 2006 to allow corporations to participate. As in Florida and Pennsylvania, the Arizona program will allow businesses to take dollar-for-dollar credit for contributions that fund private school scholarships for low-income students.

The program is capped at $10 million in 2007 but will grow to $21 million by 2010. As many as 2,000 disadvantaged kids could receive scholarships next year thanks to business donations. If history is any guide, Arizona businesses will jump at the opportunity to use their tax dollars to help children in need.

Slowly but surely, school choice is expanding as taxpayers vote with their pocketbooks to use their tax dollars to support school choice. Here's hoping Oklahoma legislators will take notice.

Dan Lips is an education policy analyst at The Heritage Foundation and co-author of "The Oklahoma Scholarship Tax Credit: Giving Parents Choices, Saving Taxpayers Money," published by the Oklahoma Council of Public Affairs.

First appeared in The Oklahoman