The school choice movement’s advance has once again stalled in front of a common education‐monopoly battlement — the separation of church and state issue, this time in Florida.
Florida’s First District Court of Appeal recently ruled Florida’s Opportunity Scholarship Program (1999), which allows students in failing schools to use tuition vouchers at private institutions, unconstitutional because it violates the state’s Blaine amendment prohibiting the use of government funds to support religious institutions. These turn‐of‐the‐century, anti‐Catholic statutes have proven a difficult barrier to school choice reform in thirty‐six states. The educational fate of more than six hundred students now rests upon a battle in front of the Florida Supreme Court and perhaps the U.S. Supreme Court thereafter. Regardless of the result, thousands of school‐choice dollars and man‐hours are being squandered in another side‐skirmish rearguard action defending legislative gains.
The legal, regulatory, and political bunkers manned by soldiers from the Democratic coalition make school choice a slow and difficult battle. What little ground reformers gain is constantly under threat of being lost. The school choice movement should step around these obstacles by concentrating their efforts on a drive, in each state with an income tax, for Universal Tuition Tax Credits (UTTCs) that allow all parents a true choice in education.
Universal Tuition Tax Credits, rather than vouchers or charters, are the most promising mechanism for providing an escape from failing schools to poor children, expanding the education market, and improving public education. All that is required is a relatively simple and popular revision of state tax law — combining, expanding, and spreading existing tax credits.
Personal use tuition tax credits allow taxpaying parents to reduce the state taxes they owe by the amount they pay in tuition to a private school — an individual who owes $10,000 in taxes and spends $4,000 on tuition gets a $4,000 tax credit. They end up paying only $6,000 in state taxes. Tax deductions, on the other hand, only reduce the amount of taxable income, which means there is much less bang for each buck.
Donation tax credits provide the same kind of state tax credit to businesses and taxpayers that contribute to non‐profit Scholarship Granting Organizations (SGOs). These SGOs pay tuition for children from low‐ and middle‐income families — ensuring that children from poor families that don’t pay much in state taxes can attend private schools as well.
Universal Tuition Tax Credits combine personal use and donation tuition tax credits. Under this system, any taxpaying parent can get a state tax credit for her child’s private school tuition, and any taxpaying individual or business can donate a portion of their state taxes to scholarships for poor children rather than send it to the state.
UTTCs tap a huge reservoir of private funds for school choice, cover a broad constituency, and thereby avoid much of the education establishment’s arsenal.
A study released by the Mackinac Center and the school choice organization Legislative Education Action Drive (LEAD) this past April, Forging Consensus, calls for the school choice movement to adopt a unified national strategy centered on Universal Education Tax Credits (which would include all educational expenses — not just tuition). Despite their merits, charters do not challenge the fundamental structural problems in education. Vouchers promise serious reform, but the attack is limited and lacking in political resources. Both charters and vouchers camp in front of the education establishment’s best‐defended positions and leave themselves open to withering attacks. Tuition Tax Credits, however, are quietly shifting children out of failing public schools into a true educational market by avoiding the difficulties of remaking the public school system directly — relying instead on personal tax credits for parents and donation tax credits funding scholarships for the poor.
The Arizona Personal Donation Tax Credit, which doesn’t even tap the deep pockets of corporations, supports about 19,000 students after six years, compared to 13,268 (2003–2004) in the Milwaukee Voucher Program after thirteen years, and just 5,147 (2002–2003) students in the Cleveland Voucher Program after seven years. The Pennsylvania Business Donation Tax Credit supports between 15,000 and 20,000 (2003) students and the Florida Business Donation Tax Credit supports 15,000 (2002–2003) students — both after just two years in existence. Illinois has a Personal Use Tax Credit, but there is no information on how many children it supports. These success stories can be vastly expanded by broadening the political base that benefits from these tax credits to include all individuals and businesses — by making the Tuition Tax Credit universal.
UTTCs command more public support than do vouchers and are easier to enact and defend. A key difference underlies their superiority; vouchers are considered by the courts to be government expenditures — tax credits are not. This legal distinction holds major political and policy implications. Blaine amendments and legal challenges based upon them, like the one that iced Florida’s voucher program, become moot under UTTC. No “government expenditure,” no separation of Church and State problem. In addition, schools accepting UTTCs are far less vulnerable to regulatory encroachment and government control because they are generally viewed as private funds by courts and the public.
UTTCs can also bring sidelined allies into the fray to supplement the conservative activists and inner‐city parents that now shoulder the entire burden. Many religious conservatives and Catholic schools are afraid to invite the government into private schools through vouchers, even if they initially come with few strings attached. Their reluctance is prudent — where government money flows, regulation goes. The reduced threat of crippling regulation and the expansion of the school choice constituency to include the middle class will provide the political clout necessary to shift from a precarious defense to a market‐expanding offense.
Surveys suggest that there is fertile ground in which to grow a UTTC campaign. Tuition Tax Credits get an average of 56 percent support to 36 percent opposition. Universal Tuition Tax Credits are supported by an astounding 65 to 24 percent on average, a 41‐point spread, while universal vouchers run just 50 to 41. Targeted programs are not only less popular — they are extremely vulnerable to a counter‐attack because the beneficiaries are few and poor. UTTCs provide a broad constituency that will discourage and deflect counter‐attacks, insulation from the most common legal challenges and regulatory encroachments, and a large and diverse customer base that will ensure a robust, effective education market.
“Nobody ever defended anything successfully,” counseled General George S. Patton, “there is only attack and attack and attack some more.” Universal Tuition Tax Credits avoid the enemy’s defensive strengths and tap the offensive assets of the school choice movement. It is time to unify on strategy — and attack.