On Monday, opponents of school choice from Arizona State University released a report attacking the state's 1997 education tax credit law, which grants taxpayers a dollar-for-dollar credit against their state tax obligation for donations they make either to public schools or to "school tuition organizations" that award scholarships for use at private schools. Author Glen Wilson calculates that 81% of donations to the school tuition organizations went to help parents pay tuition for children already attending private schools, leaving only 19% to help students switch from public to private schools. He concludes that the tax credit is draining a lot of money from public coffers without achieving its stated aim of giving low-income students the opportunity to attend private schools. The Goldwater Institute quickly responded with a press release noting that, while many scholarships are granted to children who are already enrolled in private schools, an estimated 80 percent of the scholarships are awarded on the basis of financial need, so they are supporting low-income families who may be struggling to make tuition payments at their child's private school. In addition, Goldwater points out that Wilson's estimation of the fiscal impact of tax credits does not take into account the savings accrued by the state when a pupil leaves a public school for a private school. The next day, the Goldwater Institute released its own report by executive director Darcy Olsen, arguing for an expansion of Arizona's tax credit to include businesses that make donations to school tuition organizations that assist only low-income families. A paper by Lisa Snell of the Reason Foundation weighs whether school choice supporters are better off creating a broad tax credit that benefits both lower- and middle-income families or a narrow tax credit that benefits only poor families.
"The Equity Impact of Arizona's Education Tax Credit Program: A Review of the First Three Years," by Glen Wilson, Education Policy Studies Laboratory at Arizona State University, March 2002
"Education Scholarships: Expanding Opportunities for Students, Saving Taxpayers Money," by Darcy Olsen, Goldwater Institute, March 26, 2002
"The Arizona Tax Credit Paradox," by Lisa Snell, Reason Foundation. For a copy of the paper, e-mail [email protected].