Florida Expands Corporate K-12 Tax Credit Program

Published September 1, 2009

Florida Gov. Charlie Crist (R) has approved a measure expanding the state’s corporate income tax credit K-12 scholarship program for poor, underachieving kids to include insurance companies. The bill had strong bipartisan support.

The Florida Tax Credit Scholarship funds private school tuition scholarships for students who qualify for the federal government’s free- or reduced-price lunch program and come from families with average incomes of $25,400 for a household of four.

Businesses—now including insurance companies—can receive tax credits for donating up to 75 percent of their 5.5 percent corporate income tax obligation to the scholarships.

Helps Low-Income Children

In the 2008-09 school year, 23,400 children—two-thirds of whom are black or Hispanic and three-fifths of whom come from single-parent homes—attended nearly 1,000 Florida private schools through the program. Scholarships are capped at $3,950 per pupil, and parents pay the difference for their children’s private school tuition, which costs on average about $5,400.

“Every child learns differently, and every child thrives in a different environment,” said John Kirtley, chairman of Step Up for Students, the nonprofit organization that distributes the scholarships. He praised Florida for encouraging so many different education options, including charters, career academies, and magnet schools, but said private schools, though more costly, are an important option for students.

“I think those options have to be across the board, especially for low-income kids,” Kirtley said. “I didn’t get into this to help rich folks get a tax deduction for sending their kid to private schools. I got into this to help low-income kids have better outcomes.”

Substantial Savings

Although the program is currently capped at $118 million for the coming school year under the bill Crist signed in June, the expanded funding base will help reach more children. A December 2008 government report suggesting the legislature raise the cap estimated the state saved nearly $39 million in 2007-08 by trading lost corporate income taxes for savings in public education.

Across the country, states with scholarship tax credit programs awarded about $218 million in scholarships to more than 109,000 students nationwide last year, according to the Washington, DC-based Alliance for School Choice. Indiana added a $2.5 million tax credit scholarship program to its 2010 budget, signed by Gov. Mitch Daniels (R) in July.

Florida’s program draws the poorest and lowest-performing kids from public schools statewide, said Jon East, communications director for Step Up for Students. He said desperate parents’ increased commitment to their children’s education, backed by their financial contributions to scholarships, helps students improve their academic performance in the private schools they attend.

State Sen. Stephen Wise (R-Jacksonville), who chairs the Education Pre-K-12 Appropriations Committee, agreed parental involvement strengthens a child’s chance for success in school.

“When [parents] get engaged in their kids and [in] making a choice for their school, they somehow seem to be more proactive in their kids’ education,” Wise said.

Whitney Stewart ([email protected]) writes from Minnesota.

For more information …

Florida HB 453: http://www.myfloridahouse.gov/Sections/Bills/billsdetail.aspx?BillId=40353&SessionIndex=-1&SessionId=61&BillText=&BillNumber=453&BillSponsorIndex=0
&BillListIndex=0&BillStatuteText=& BillTypeIndex=0&BillReferredIndex=0&House

“The Corporate Income Tax Credit Program Saves State Dollars,” Office of Program Policy Analysis and Government Accountability, December 2008: http://www.oppaga.state.fl.us/reports/pdf/0868rpt.pdf