Opportunity Scholarships go to families with children in schools that receive an F on the state report card for two years out of a four-year period, for use in any participating private school or another public school receiving a C or better. Scholarships are equal to the amount of the state’s share of an eligible student’s educational expenses, which in 2001-02 averaged $3,500 to $3,900. Participating private schools agree to receive up to the scholarship amount as full tuition.
Participating students: 600 (Fall 2002).
McKay Scholarships offer students with disabilities the option to attend another public school or an eligible private school when the current school is not meeting the student’s individual performance goals. In 2001-2002 the average amount awarded was $5,547.
Participating students: 8,200 (Fall 2002).
Students residing in school districts without a public school may attend a public school in another school district or nonreligious private school at a state and/or town expense of up to $6,305. Public funds may be used for some nontuition educational expenses in religious schools.
Participating students: 14,185, with 5,933 in private schools (Fall 2001).
Students residing in the Cleveland Municipal School District in grades K-8 are eligible to receive scholarships to attend a qualified public, private secular, or religious school of their choice. Private school tuition cannot exceed $2,500, with the state paying either 75 percent or 90 percent–i.e., up to $2,250–depending on a family’s income. Priority is given to low-income families.
Participating students: 4,523 (2001-02 school year).
Students residing in school districts without a public school may attend a public school in another school district or approved nonreligious private school at school district expense (so-called “tuitioned students”).
Participating students: 7,147 (2001-02 school year).
The Milwaukee Parental Choice Program provides the opportunity for up to 15 percent of students–approximately 15,000–in the Milwaukee school district to receive vouchers for use at private secular or religious schools if family income is at or below 175 percent of the poverty level. The value of the voucher, which was $5,553 in 2001-2002, is equal to the Milwaukee per-pupil state aid or private school tuition, whichever is less. If more students apply at a particular school than there are open spots, students are selected by lottery.
Participating students: 10,789 (January 2002).
TAX CREDITS FOR EDUCATIONAL EXPENSES
A dollar-for-dollar tax credit of up to $200 for the individual or $250 for a married couple is allowed for fees paid to public schools for extracurricular activities or character education programs. The credit is nonrefundable, but may be carried forward for no more than five consecutive years.
A nonrefundable tax credit is allowed for 25 percent of education-related expenses, including tuition, books, and lab fees that exceed $250. The maximum amount of credit an individual can claim is $500, for educational expenses in public, private secular, religious, or home schools.
Iowa allows a tax credit of 25 percent of the first $1,000 spent on each dependent’s elementary or secondary educational expenses, including nonreligious tuition, textbooks, and/or extracurricular activities. The credit is available to families whose income does not exceed $45,000.
Tax Credit: Families with income up to $33,500 may receive a refundable tax credit of 75 percent of educational expenses, up to $1,000 per student with a maximum of $2,000. A reduced credit is available to families with income that exceeds $33,500, but not more than $37,500. Allowed expenses include tutoring and books and materials for nonreligious classes, but not tuition. Computer hardware and software expenses up to $200 are also allowed. An education tax deduction also is available and may be used for expenses exceeding the credit.
Tax Deduction: A tax deduction is available for educational expenses of up to $1,625 for students in grades K-6 and up to $2,500 for students in grades 7-12. Expenses include private school tuition in Minnesota or surrounding states, tutoring, and textbooks and materials for nonreligious classes. Computer hardware and software expenses of up to $200 are also allowed. Taxpayers with students in grades K-12 in public, private, or home school qualify regardless of income.
TAX CREDITS FOR DONATIONS TO EDUCATIONAL ENTITIES
For Private School Scholarships: A dollar-for-dollar tax credit of up to $500 for an individual or $625 for a married couple is allowed for donations to organizations that provide scholarships for students to attend private or religious schools. The credit is nonrefundable, but may be carried forward for no more than five consecutive years.
For Public School Programs: A dollar-for-dollar tax credit of up to $200 for an individual or $250 for a married couple is allowed for donations to a public school for support of extracurricular activities or character education programs. The credit is nonrefundable, but may be carried forward for no more than five consecutive years.
Dollar-for-dollar corporate tax credits are allowed for donations by corporations to nonprofit school tuition organizations (STOs). The credit may not exceed 75 percent of the company’s tax due for the tax year and no one company may donate more than $5 million to any one STO. There is a $50 million cap on the total amount of tax credit the state awards within a fiscal year. Low-income students qualify to receive scholarships of up to $3,500 to use for private school tuition, textbooks, and/or transportation. At least 75 percent of the scholarship for a private school must be used for tuition. Students who transfer to a public school outside of the district in which they reside may receive a scholarship of up to $500.
Corporate tax credits are available for donations to STOs that provide scholarships to students who want to attend private schools. The credit is worth 75 percent of a single-year donation and 90 percent of a multi-year commitment. The credit is not to exceed $100,000 for any one corporation and there is a cap of $30 million credited throughout the state in a fiscal year. Scholarships go to families with incomes of no more than $50,000, plus $10,000 for each additional dependent.
Marya DeGrow is the Research Assistant to the Independent Institute’s Education Policy Center in Golden, Colorado. Her email address is [email protected].
For more information …
Marya DeGrow’s Issue Backgrounder on this topic, which provides Web-linked references to each of the programs, is available from the Web site of the Independent Institute at http://www.i2i.org/Publications/IB/Education/2002f.htm.