Vouchers Saving Florida Tax Dollars, State Reports

Published March 1, 2009

Florida’s statewide voucher program for low-income students saved taxpayers $38.9 million in the 2007-08 school year, according to a study released by Florida’s Office of Program Policy Analysis and Government Accountability.

“While the program reduces the amount of corporate tax revenues received by the state, it produces a net fiscal benefit,” the report notes. “This occurs because state education spending for students who receive scholarships is reduced by more than the amount of revenue lost.”

The Florida Legislature established the Corporate Income Tax Credit Scholarship Program in 2001 to expand educational opportunities for low-income students. The program enables them to attend private schools using scholarships financed with corporate income tax credits.

Corporations participating in the scholarship program make contributions to scholarship funding organizations (SFOs) and receive tax credits equal to the amount of those contributions, not to exceed 75 percent of their state corporate taxes owed. The number of students receiving scholarships has nearly doubled in the past five years as the state has increased the overall statewide cap on the credits.

Helping Families

The program currently serves 23,234 students from households whose income meets federal guidelines for taxpayer-provided free and reduced-price lunches.

“I think this is an important study,” said John Kirtley, chairman of the Florida School Choice Fund, the Tampa-based group that oversees the Step Up For Students Scholarship program. “There were two other studies, one by Florida Tax Watch [and one by] the Collins Center for Public Policy, that also showed this program would be saving Florida taxpayers hundreds of millions of dollars over 10 years. This study by a government organization confirms that.”

Kirtley said the study, released in January, gains credibility because it comes from a trusted, unbiased source.

“We certainly want taxpayers to know we are saving them money, and we hope that our partners in public education benefit from our savings,” Kirtley added. “That said, our greater priority remains to provide the best possible education options for low-income children who have so few. We’re all judged by how well we provide for the least among us.”

Viable Solution

The state’s study also will catch the eye of legislators and others, said Kirtley, because Florida, like many other states, is in a budget crisis.

“A study that comes out saying a program can save the state $40 million a year is bound to get a lot of attention,” Kirtley explained.

“This is a program [in which] parents with an average income of $24,000 for a family of four are paying $1,000 out-of-pocket for school,” Kirtley noted. “They’re helping solve the state’s budget crisis. It would be hard for people to argue to cut back on the program to send students back to a school they didn’t want to be at.”

The program has earned strong bipartisan support, which led to a 30 percent expansion last year.

More Evidence

“This is terrific news, but nothing that hadn’t already been looked at before, and already evidenced before,” said Robert Enlow, president and CEO of the Friedman Foundation for Educational Choice, a national organization based in Indianapolis.

“In 2007 we released ‘Education by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006,'” Enlow noted. “We looked at every single state that had school choice programs and reviewed them for their savings and found a total of $444 million. More than $400 million of that was at the local [level].

“What Florida proves is that school choice always saves money. I think this is very important, given all the budget crises in states today. … State legislators would be remiss in their job if they didn’t seriously consider these findings,” Enlow said.

Enlow says the study bodes well for school choice expansion efforts even though most people in traditional education have a vested interest in maintaining the status quo.

Phillip J. Britt ([email protected]) writes from Illinois.

For more information …

“The Corporate Income Tax Credit Scholarship Program Saves State Dollars,” Report No. 08-68, Florida Office of Program Policy Analysis and Government Accountability, December 2008: http://www.oppaga.state.fl.us/reports/pdf/0868rpt.pdf

“Education by the Numbers: The Fiscal Effect of School Choice Programs, 1990-2006,” by Dr. Susan L. Aud, Friedman Foundation for Educational Choice, May 9, 2007: http://www.friedmanfoundation.org/friedman/research/Show