Tax Credit Program Could Save Nevada Millions of Dollars

Published April 1, 2009

Facing a budget crisis and with nearly half the state’s fourth-graders not reading at grade level, Nevada could solve both problems simultaneously with a large-scale tax credit scholarship program, according to a new study.

The Cato Institute, a Washington, DC-based think tank, estimates such a program would save Nevada between $590 million and $1.3 billion over 10 years, while giving families much-needed school choice. Nevada currently has no voucher or tax credit school choice programs and fewer than 30 public charter schools statewide.

“It will save the state a considerable amount of money, give opportunity to those that have none, and increase per pupil spending—what is not to like about this program?” asks Patrick Gibbons, an education policy analyst for the Nevada Policy Research Institute, a free-market think tank based in Las Vegas which commissioned the study.

“There is no magic bullet for improving the educational system,” Gibbons said, “[but] school choice can play a big role.”

Novel Combination

Andrew Coulson, director of Cato’s Center for Educational Freedom, released “Choosing to Save: The Fiscal Impact of Education Tax Credits on the State of Nevada” in January. To reach his estimate, Coulson calculated the state’s per-pupil spending, taking into account the cost of school construction and the rate at which students will move to private schools.

The proposed tax credit program would utilize tax breaks both for families whose children attend private schools and for businesses donating money to scholarship-granting organizations. Such tax cuts are being used in different states, but no state has yet combined them.

“Combining these two sets of programs can bring access to that marketplace within reach of every family, maximizing the benefits of parental choice and competition between schools,” Coulson said.

Well Received

Coulson presented his study in January to educators, legislators, and the business community at the Nevada Policy Research Institute’s first policy summit, “How Business Can Fix Nevada Education.” Mary Stubblefield, the group’s education initiatives coordinator, said the response was positive.

“The business community wants to see schools change,” Stubblefield said.

Despite the positive feedback, Gibbons said he believes “prospects are slim” that much will happen for school choice in Nevada during the next few years.

“I assume large school districts combined with powerful teacher unions contribute to an atmosphere that is resistant to change,” Gibbons said.

Georgia Geis ([email protected]) writes from Chicago.

For more information …

“Choosing to Save: The Fiscal Impact of Education Tax Credits on the State of Nevada,” by Andrew J. Coulson, Nevada Policy Research Institute, January 12, 2009: