School Choice Tax Credit for California?
SACRAMENTO, CA -- While California school-choice supporters have, over the past few years, focused on Governor
Wilson's plan to offer opportunity scholarships to children attending low-performing public schools, it is exciting to note the
emergence of other intriguing school choice ideas.
The most interesting of these is the concept of school-choice tax credits and deductions. In 1997, Minnesota and Arizona
enacted laws creating such tax relief for certain education-related expenses. In Minnesota, families with incomes of less than
$33,500 are allowed a tax credit of up to $1,000 per child and $2,000 per family for non-tuition expenses such as tutoring,
school supplies and transportation. In addition, a tax deduction was created for education-related expenses, including private
school tuition, up to $1,625 for K-6 students and $2,500 for students in grades 7-12.
It is instructive to note that, despite intense teacher union opposition, Minnesota's Republican Governor Arne Carlson was able
to use a combination of public pressure (polls showed wide support for the tax credit/deduction plan) and political will (Carlson
vetoed the state education funding bill) to force the Democrat-dominated legislature to pass the tax credit/deduction law.
In Arizona, the law provides a $500 tax credit for cash contributions to any school tuition organization (defined as a charitable
organization that "allocates at least ninety percent of its annual revenue for educational scholarships or tuition grants to children
to allow them to attend any qualified school of their parents' choice").
Such tuition programs so far have proved to be stunningly successful. In Milwaukee, the privately funded PAVE program pays
half the private school tuition of approximately 4,500 low-income students. Over the past two years, 75 percent of its
graduates have gone on to higher education. In recognition of this success, the Milwaukee school board unanimously voted to
sign a fund-raising letter for PAVE. According to the Wall Street Journal, "The board noted that PAVE's role is important in
helping the Milwaukee Public Schools (MPS) improve. It asked business leaders to support PAVE until the public system 'can
provide quality education for all our children.'"
In California, there are a growing number of PAVE-like programs. For example, the Pacific Research Institute's San Francisco
Independent Scholars program provides scholarships to high school students who, because of space limitations, cannot get into
San Francisco's top public magnet school. An Arizona-style tax credit would promote the expansion of such programs and go
a long way toward assisting thousands of children who now stagnate in low performing public schools.
With Minnesota- and Arizona-type legislation likely to be introduced this session in California, legislators would do well to
consider Gov. Carlson's wise advice: "Please, go out and get it done. Let's look back ten years from now and say that's when
America changed its attitude about children. It cared so much about its children that it set in motion market forces to allow for
competition to drive for more accountability, more responsibility, more favorable outcomes."
—By Lance T. Izumi and Royce Van Tassell
