{"id":8968,"date":"2017-04-14T20:41:48","date_gmt":"2017-04-14T20:41:48","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=8968"},"modified":"2017-04-16T20:45:19","modified_gmt":"2017-04-16T20:45:19","slug":"tax-credits-school-choice-and-neovouchers-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/tax-credits-school-choice-and-neovouchers-what-you-need-to-know\/","title":{"rendered":"Tax credits, school choice and ‘neovouchers’: What you need to know"},"content":{"rendered":"

Kevin Welner<\/a>, University of Colorado<\/a><\/em><\/span><\/p>\n

As Republican lawmakers craft a tax reform bill<\/a>, there\u2019s speculation<\/a> on the import taxes, value-added taxes and tax cuts it may usher in. Meanwhile, it\u2019s likely that the bill will also include a major education policy initiative from the Trump administration: a tax credit designed to fund private school vouchers<\/a>. \"The<\/p>\n

A decade ago I started researching this new kind of voucher<\/a> \u2013 funded through a somewhat convoluted tax credit mechanism \u2013 that appears to have particular appeal to President Trump and other Republicans<\/a>.<\/p>\n

These new vouchers (or \u201cneovouchers\u201d) are similar to conventional vouchers in many ways, but there are some important differences. It\u2019s those differences that neovoucher advocates most care about and that everyone should understand.<\/p>\n

\n \"\"<\/a>
\n President Donald Trump and Education Secretary Betsy DeVos tour Saint Andrew Catholic School in Orlando, Florida.<\/span>
\n AP Photo\/Alex Brandon<\/span><\/span>
\n <\/figcaption><\/figure>\n

Conventional vouchers<\/h2>\n

What exactly is a school voucher? Typically, a voucher is direct financial support that helps families pay for the cost of private K-12 schooling. Proponents see vouchers as a way to help children attend nonpublic schools<\/a>. Detractors see vouchers as undermining funding and support needed by public education<\/a>.<\/p>\n

All vouchers subsidize tuition with tax dollars. This can be accomplished in many ways, and the nuances matter.<\/p>\n

Conventional voucher policies use the relatively straightforward method of allocating state money to give vouchers directly to eligible parents. The parents, in turn, give the vouchers to a private school of their choice. These schools are sometimes secular, but are usually religious<\/a>.<\/p>\n

The private schools then redeem these vouchers to obtain money from the state. In the 16 states<\/a> where conventional voucher policies exist, they produce about 175,000 vouchers annually. This amounts to 3.3 percent of the nation\u2019s private school population.<\/p>\n

Yet, these direct vouchering programs present four major problems for school choice advocates.<\/p>\n

First, they\u2019re typically available only to lower-income families<\/a>; wealthier families are usually not eligible.<\/p>\n

Second, when governments directly provide voucher money, participating schools are generally required to comply with a variety of guidelines<\/a>, such as accreditation requirements, anti-discrimination regulation, minimum teacher qualifications, financial reporting and\/or the administration of a standardized test to students receiving the voucher.<\/p>\n

Third, vouchers are simply not politically popular<\/a> \u2013 which is why the more palatable term \u201copportunity scholarships<\/a>\u201d (courtesy of messaging guru Frank Luntz<\/a>) has become increasingly popular.<\/p>\n

Finally \u2013 and importantly \u2013 state constitutions<\/a> often prohibit the channeling of state money to religious institutions. In many states, this means that conventional voucher programs cannot exist if the program includes religious schools. Although the Supreme Court has ruled that vouchers don\u2019t violate federal law<\/a>, state constitutions can create legal obstacles<\/a> that are more formidable than those under the U.S. Constitution.<\/p>\n

\n \"\"
\n St. Joseph Academy, a Catholic school in Cleveland, is one of the top three schools to benefit from Ohio voucher dollars. Ohio\u2019s conventional vouchers can be applied to secular and nonsecular schools alike, but 97 percent go to religious schools.<\/span>
\n Oarbogast \/ Wikimedia Commons<\/a>, CC BY-SA<\/a><\/span>
\n <\/figcaption><\/figure>\n

Vouchers on steroids<\/h2>\n

To sidestep these issues, many state lawmakers have embraced a new kind of voucher policy that gets essentially the same result but changes the state\u2019s role from paying for vouchers to issuing tax credits.<\/p>\n

This approach was first adopted in Arizona, in 1997, where the legislature passed a law<\/a> setting up a system in which any taxpayer could \u201cdonate\u201d money to a special, private nonprofit corporation. That corporation then issues vouchers to parents, who use them to pay for private school tuition. The taxpayers then get the money back from the state in the form of a tax credit.<\/p>\n

Arizona\u2019s constitution<\/a> \u2013 typical of language in state constitutions \u2013 requires that \u201cNo public money or property shall be appropriated for or applied to any religious worship, exercise, or instruction, or to the support of any religious establishment.\u201d But Arizona\u2019s elaborate mechanism keeps the specific dollars out of state coffers. Consequently, state funding only indirectly supports religious institutions. The Arizona Supreme Court<\/a> found this distinction sufficient, ruling that the tax credits did not violate the state\u2019s constitutional prohibition against spending public money for religious support.<\/p>\n

Beyond this legal advantage, advocates favor this sort of tax-credit-voucher method because it appears less likely to be regulated<\/a>. It\u2019s also likely to be open to a wider range of parents \u2013 not just lower-income or special needs families. And the complexity of the neovoucher approach obscures the fact that it\u2019s really a voucher program<\/a>, making it less of a political lightning rod.<\/p>\n

Some wealthy taxpayers can even receive tax benefits exceeding the value of their donations<\/a>. This baffling outcome is because of a loophole tied to the Alternative Minimum Tax (AMT), an extra tax imposed on some wealthier taxpayers to ensure that they pay their fair share. The AMT limits certain tax breaks, such as the ability to deduct state tax payments from federal taxes. However \u2013 and here\u2019s the twist \u2013 these AMT taxpayers can deduct charitable contributions. And so, these wealthier taxpayers can shift their state tax payment into a \u201ccharitable\u201d contribution and instantly transform the payment into a federal deduction. In the six states that give a full tax credit for voucher donations, those taxpayers can get back the full value of their voucher plus a deduction for the donation.<\/p>\n

A decade ago when I wrote a book explaining these tax credit policies and labeling them \u201cneovouchers<\/a>,\u201d they existed in only six states and generated about 100,000 vouchers. Today, 17 states<\/a> have tax-credit policies similar to Arizona\u2019s on their books, generating a quarter-million vouchers and growing every year.<\/p>\n

\n \"\"<\/a>
\n Students at The King\u2019s Academy in West Palm Beach, Florida. Florida is one of the states that issues tax-credit-style vouchers.<\/span>
\n Randal Martin \/ Wikipedia<\/a>, CC BY<\/a><\/span>
\n <\/figcaption><\/figure>\n

These new vouchers aren\u2019t likely to help kids<\/h2>\n

Do these vouchers improve student achievement? The research suggests that we shouldn\u2019t expect children\u2019s learning to be affected.<\/p>\n

An evaluation of Florida\u2019s neovoucher law<\/a> \u2013 which the Trump administration appears to be using as its model<\/a> \u2013 found that students receiving these neovouchers had a nonsignificant (-0.7 percentile points) loss in math and nonsignificant (+0.1 percentile points) gain in standardized test scores. <\/p>\n

Similarly, research focused on conventional vouchers has tended to reach this same conclusion<\/a>, finding no significant change in student test scores. More recent studies, looking at conventional vouchers in Louisiana<\/a>, Ohio<\/a> and Indiana<\/a> actually find that test scores have declined \u2013 in some cases, by surprisingly large margins.<\/p>\n

What to expect<\/h2>\n

While, thus far, neovoucher policies have existed only on the state level, proposals are now appearing at a federal level.<\/p>\n

In February of 2017, Rep. Todd Rokita of Illinois and three Republican colleagues introduced a bill (H.B. 895<\/a>) that sets forth the basic structure for a federal neovoucher policy.<\/p>\n

But the particulars of the neovoucher policy that ultimately emerges in the Republicans\u2019 tax reform bill are up for grabs. Based on the wide variety of existing state neovoucher policies, it is possible that the federal proposal will provide a full 100 percent credit (as does H.B. 895) or a credit of only 50 or 65 percent. It might limit eligibility to children in families at the poverty level, or it might have expanded or even universal eligibility.<\/p>\n

It also remains to be seen whether federal neovouchers would be allocated only in states with existing programs or might be distributed in all states, including those with no such laws.<\/p>\n

Interestingly, some of the staunchest advocates of state-level neovouchers have expressed concern and even opposition<\/a> to a federal initiative. Beyond general conservative resistance to federal overreach in education policy, they voice familiar concerns<\/a> about the likelihood of regulations following money, particularly from future Democratic leadership in Washington, D.C.<\/p>\n

And, of course, a federal neovoucher program would face significant fiscal obstacles as well. Absent large cuts elsewhere, these policies would strain the federal budget, requiring some creative work on the part of lawmakers \u2013 particularly since the tax reform bill will have to be revenue neutral<\/a>. The cost of vouchers for even a fraction of the nation\u2019s 57 million K-12 students could easily cost tens of billions.<\/p>\n

This daunting price tag, however, probably won\u2019t deter President Trump or Education Secretary Betsy DeVos, who have stated their opposition to the \u201cpublic\u201d part of public schools, with Trump even denigrating them as socialistic \u201cgovernment schools<\/a>\u201d that are part of the \u201cAmerican carnage<\/a>\u201d that \u201cleaves our young and beautiful students deprived of all knowledge.\u201d<\/p>\n

It seems unlikely that they will forego their chance to give tax dollars to private education.<\/p>\n

Kevin Welner<\/a>, Professor, Education Policy & Law; Director, National Education Policy Center, University of Colorado<\/a><\/em><\/span><\/p>\n

This article was originally published on The Conversation<\/a>. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Kevin Welner, University of Colorado As Republican lawmakers craft a tax reform bill, there\u2019s speculation on the import taxes, value-added taxes and tax cuts it may usher in. Meanwhile, it\u2019s likely that the bill will also include a major education policy initiative from the Trump administration: a tax credit designed to fund private school vouchers. […]<\/p>\n","protected":false},"author":44,"featured_media":8969,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[292],"tags":[1925,2168,2169,1622,1624,2170,2171,850],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/8968"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=8968"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/8968\/revisions"}],"predecessor-version":[{"id":8970,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/8968\/revisions\/8970"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/8969"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=8968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=8968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=8968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}