Research & Commentary: Education Income Tax Credits Would Benefit Colorado Students

Published February 12, 2018

A proposal that would establish scholarship tax credits for parents sending their children to a private school has been introduced in the Colorado State Senate. Under the proposed program, which would begin in 2019, parents whose children are leaving the public school system or are entering the public school system for the first time would be able to claim a tax credit equal to 50 percent of the previous year’s average per-pupil expenditures, or roughly $3,900. This tax credit would also be available to anyone who helps pay the tuition of a student moving from a public school to a private school. Parents who homeschool their children would be eligible for a tax credit worth up to $1,000.

Because none of the funds become the property of the state, the proposal would not violate state constitutional provisions against public funds being used for religious or sectarian schooling. A “Fiscal Note” on the program published by the Colorado Legislature’s Legislative Council Staff estimates there would be more than 7,900 private school applicants to the program for Income Tax Year (ITY) 2019. Another 1,700 homeschool applicants would be eligible in ITY 2019. By Income Tax Year 2020, they expect enrollment in the program to rise to 17,000 private school applicants and 3,000 homeschool applicants. The “Fiscal Note” also estimates a reduction in state expenditures by $51.9 million in Fiscal Year 2018–19, $93.1 million in FY 2019–20, and $133.6 million in FY 2020–21.

Only 43 percent of Colorado 4th graders and 37 percent of 8th graders tested “proficient” in math on the 2015 National Association of Education Progress(NAEP) test, also known as the Nation’s Report Card. Only 39 percent of 4th graders and 38 percent of 8th graders tested proficient in reading. These results show Colorado’s public school system is failing to educate roughly six out of 10 4th grade and 8th grade students to a proficient level in reading and mathematics.

Colorado’s sub-standard performance on NAEP underscores the desperate need for the state to expand school choice opportunities far beyond what is currently available. Too many public schools in Colorado are failing to adequately prepare students for productive lives. Parents should be allowed to choose the schools their children attend and should not be penalized financially if that choice is a private religious or secular school.

Critics of education freedom insist school choice does not improve students’ academic achievement. However, in May 2016, EdChoice released a report in which it examines 100 empirical studies of school choice programs. Eighteen of these studies used random assignment to measure outcomes, referred to in academia as the “gold standard.” The overwhelming majority of the available empirical evidence makes it clear educational choice offers families improved access to high-quality schools that meet their widely diverse needs and desires, and it does so at a lower cost while simultaneously benefitting public school students and taxpayers, decreasing segregation, and improving civic values and practices.

School choice programs are not a silver-bullet solution, but they certainly allow families much greater opportunities to meet each child’s particular education needs. The goal of public education in Colorado today and in the years to come should be to allow all parents to choose which schools their children attend, require every school to compete for every student who walks through its doors, and make sure every child has the opportunity to attend a quality school.

The following documents provide more information about school choice programs.

A Win-Win Solution: The Empirical Evidence on School Choice (Fourth Edition)
http://www.edchoice.org/wp-content/uploads/2016/05/A-Win-Win-Solution-The-Empirical-Evidence-on-School-Choice.pdf
This paper by EdChoice details how a vast body of research shows educational choice programs improve academic outcomes for students and schools, saves taxpayers money, reduces segregation in schools, and improves students’ civic values. This edition brings together a total of 100 empirical studies examining these essential questions in one comprehensive report.

Education Savings Accounts: The Future of School Choice Has Arrived
https://heartland.org/publications-resources/publications/education-savings-accounts-the-future-of-school-choice-has-arrived
In this Heartland Policy Brief, Policy Analyst Tim Benson discusses how universal ESA programs offer the most comprehensive range of educational choices to parents; describes the six ESA programs currently in operation; and reviews possible state-level constitutional challenges to ESA programs.

Ten State Solutions to Emerging Issues
https://heartland.org/publications-resources/publications/ten-state-solutions-to-emerging-issues-2018
This Heartland Institute booklet explores solutions to the top public policy issues facing the states in 2018 and beyond in the areas of budget and taxes, education, energy and environment, health care, and constitutional reform. The solutions identified are proven reform ideas that have garnered significant support among the states and with legislators.

2017 Schooling in America: Public Opinion on K–12 Education, Parent Experiences, School Choice, and the Role of the Federal Government
https://www.edchoice.org/wp-content/uploads/2017/11/2017-Schooling-In-America-by-Paul-DiPerna-Michael-Shaw-and-Andrew-D-Catt.pdf
This annual EdChoice survey, conducted in partnership with Braun Research, Inc., measures public opinion and awareness on a range of K–12 education topics, including parents’ schooling preferences, educational choice policies, and the federal government’s role in education. The survey also records response levels, differences, and intensities for citizens located across the country and in a variety of demographic groups.

The Public Benefit of Private Schooling: Test Scores Rise When There Is More of It
https://object.cato.org/sites/cato.org/files/pubs/pdf/pa830.pdf
This Policy Analysis from the Cato Institute examined the effect that increased access to private schooling has on international student test scores in 52 countries around the world, finding that a 1 percentage point increase in the private share of total primary schooling enrollment would lead to moderate increases in student math, reading, and science achievement within nations.

The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?
http://www.edchoice.org/wp-content/uploads/2015/07/The-School-Voucher-Audit-Do-Publicly-Funded-Private-School-Choice-Programs-Save-Money.pdf
This report by Jeff Spalding of EdChoice provides a program-for-program breakdown of school voucher costs and savings. On the whole, Spalding says these programs have provided a cumulative savings of $1.3 billion since 2007, or roughly $3,400 per pupil.

Personalizing Education: How Florida Families Use Education Savings Accounts
https://www.edchoice.org/wp-content/uploads/2018/02/Personalizing-Education-By-Lindsey-Burke-and-Jason-Bedrick.pdf
This report by Jason Bedrick of EdChoice and Lindsey Burke of The Heritage Foundation examines how parents in Florida used their education savings account funds during the first two school years of the Gardiner Scholarship Program, which is now utilized by more than 10,000 students with special needs. Bedrick and Burke found more than 42 percent of families used their ESA to customize their child’s education in 2015–16, and 55 percent of these customizers did so without using a brick-and-mortar private school.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit School Reform News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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