Florida’s Popular Education Scholarship Program Expands

Published October 22, 2010

Demand by low-income families in Florida for education scholarships skyrocketed this year, causing officials to stop accepting new applications for the state’s tax credit scholarship program. The tax credit has proved popular in the Sunshine State with enrollment almost tripling in the last six years from 10,549 students during the 2004-05 school year to 28,927 students in 2009-2010.

As of September, 34,598 students were benefiting from the Florida education scholarship program.

‘Critical Mass of Funding’
Florida’s program began giving low-income students the option of attending either a private school or a public school with a scholarship in 2002. The scholarship covers private school tuition and books or up to $500 for transportation costs to attend a public school in a different school district.

The average scholarship amount for the 2009-10 school year was $3,563, according to the Alliance for School Choice in Washington, DC. This year the scholarship will cover up to $4,106 for tuition and books or $500 for transportation costs.

“Florida’s education tax credit program appears to be the first private-school choice program to reach a critical mass of funding, functionality, and political support,” explains Adam Schaeffer, an education policy analyst with the Cato Institute. “It’s far larger than any voucher program and will soon dwarf all existing private choice programs. This credit program is poised to transform education in Florida and the national conversation on education reform.”

Funded by Corporations
State lawmakers earlier this year expanded the popular program by raising the annual tax credit cap from $118 million to $140 million for the 2010-11 school year and up to $170 million for the 2011-12 school year. The Florida legislature also removed caps for corporate donations, added types of business taxes, and increased the amount of the scholarship.

Corporations fund the scholarships through donations to nonprofit Scholarship-Funding Organizations. Florida allows companies to claim a tax credit against corporate income taxes, insurance premium taxes, severance taxes on oil and gas production, self-accrued sales tax liabilities of direct pay permit holders, and alcoholic beverage taxes on beer, wine, and spirits.

The program expansion has allowed about 5,000 more students to be served this year.

Scholarship Shortage
With the program growing in popularity among low-income families, there are not enough scholarships to go around.

“The demand is both wonderful news and heartbreaking, as not everyone can be served,” said Jon East, policy and public affairs director of Step Up For Students, the nonprofit scholarship organization that helps administer the scholarships. “We had to cut off new applications in September, and we have about 1,000 students on the waiting list.” 

No Skimming
East said critics of the program claim the best students leave public schools for private school with a scholarship, but East cites data from the Florida Department of Education showing students who used the scholarship were the lowest-performing students in their public school and came from the lowest-performing public schools.

State rules require the pool of scholarship students come from low-income families, determined by eligibility for free or reduced-price lunch; in the foster care system; or have participated previously in Florida’s defunct A+ Opportunity Scholarships. In addition, students have to have attended public school the previous year, or be entering kindergarten or first grade.

The program is growing in popularity with private schools. In 2004-05, 973 private schools participated in the program. The number had grown to 1,259 private schools by September of this year.

Florida requires private schools to administer the state public school assessment or a norm-referenced test to scholarship students and to have teachers with a bachelor’s degree or three years of teaching experience.

Parental Satisfaction High

“What makes this so rewarding is that these are the students who were having the greatest trouble in their previous schools,” said John Kirtley, chairman of Step Up For Students. “We can see how sometimes it just takes a different setting for them to get back on track academically.”

A parental satisfaction survey found the program is popular with parents, with 95.4 percent of participating parents rating their child’s school as either excellent or good.

Tax Credits Spreading
Six other states have education tax credit scholarship programs: Arizona, Georgia, Indiana, Iowa, Pennsylvania, and Rhode Island. Arizona has the oldest program, dating back to 1997. Arizona currently offers three education tax credit scholarship programs, including one for foster care and special needs students. Those programs are the subject of a court challenge which the U.S. Supreme Court will decide this term.

Tax credit scholarship programs have been challenged several times but have never been ruled unconstitutional in any state or federal court case.

Parental and student demand is increasing in other states.

“We are increasingly seeing waiting lists for school choice programs around the country,” said Scott Jensen, senior advisor to the American Federation for Children.  “Florida, Louisiana, Pennsylvania, and Ohio all waiting lists this year, and we expect even more states to have waiting lists next year.”

The Alliance for School Choice reports a total of 115,642 students across the country received such an education scholarship last year.

“It’s clear that parents around the country are demanding more educational options for their children,” said Jensen. “Politicians around the country should take note.”

Brooke Terry ([email protected]) writes from Texas and is a former education policy analyst at the Texas Public Policy Foundation.