Tax credits that help corporations and individuals offset their contributions to nonprofits providing scholarships to private schools have proved popular in the states. Currently, more than 21 such programs are available in 17 states.
But that doesn’t mean it’s a good idea to take the approach nationwide via a new federal tax credit. Politico reported last week that advocates are encouraging the Trump administration, which has been vocally supportive of school choice, to do just that, pushing for a new federal tax-credit scholarship.
But doing so could wind up undermining the broader school-choice movement in the states.
School choice has proved to be one of the most effective K–12 education reforms of the last century. It has been integral to improved academic performance, graduation rates, parental satisfaction, student safety, and many other outcomes that affect students’ futures.
The Trump administration deserves credit for recognizing the value of school choice and for lending rhetorical support to its expansion. But by and large, school choice is not a federal issue. States are in a far better position to shape programs that will fit local needs and to improve on those programs based on local experience. Distant federal policymakers inevitably try to regulate and micromanage programs under their control — a recipe for ineffectiveness. A new, large-scale federal initiative could constrain the prospects for widespread, long-term educational improvements, ultimately harming the good school-choice work being done in the states.
A new federal program would further entangle Washington in local school policy and private education. Scholarship tax credits (STCs) work well at the state level, but the federal tax code is an inappropriate lever for establishing STCs. First, the U.S. Constitution does not authorize the federal government to enact national education programs. Instead, it rightly leaves education policy to the states.
Second, Washington has no right to take the lead in education reform, as it is but a minority stakeholder. While the feds contribute mightily to the red tape that binds the hands of states and local school leaders, they pony up only 10 percent of all education financing. Since 90 percent of all K–12 education funding is generated at the state and local level, it should be directed by state and local taxpayers, free from federal red tape.
Third, each state’s school-choice programs are different, reflecting the different needs of local communities. School choice is politically sustainable when local coalitions are in the driver’s seat and are able to build a sufficient level of local buy-in. A single, national program would risk upsetting the hard-won local coalitions that have emerged organically over the course of decades.
As education policy scholar Greg Forster notes, advocates of limited government in general should not be eager to “have the future of school choice put into the hands of the IRS.” Writing for the Oklahoma Council of Public Affairs, he noted:
The idea behind federalism is that governance should be kept as close as possible to local communities. That is partly because big, distant legislatures and bureaucracies are not likely to serve people well if they’re not directly connected to them. And that’s still going to be a problem even if you do find a clever way to circumvent the Constitution’s legal barriers to national education policy.
A new federal tax-credit program could give Washington new power to regulate private schools. Would participating schools be required to administer government-approved curricula or government-mandated tests? Or be held “accountable” to metrics such as graduation rates or college enrollment?
Even if such conditions weren’t imposed at the outset, a future administration might require participating schools to abide by as-yet unwritten requirements. The Obama administration, for example, was fond of “pen and phone” executive orders and agency “interpretations.” These policies were generally limited to public schools, but a new federal tax-credit program would be likely to make private schools newly vulnerable to federal regulation.
Lathering regulations on participating schools could harm the long-term prospects of school choice by homogenizing the private-school sector.
There are also questions about regulations accompanying scholarship-granting organizations and school autonomy generally. A proposal introduced in the last Congress would have prevented organizations from awarding scholarships solely to groups of mission-specific schools. For example, it would have barred organizations from giving scholarships exclusively to students who wish to attend Catholic schools or Jewish day schools. Would regulations accompanying a new federal tax credit allow scholarship-granting organizations to operate in a mission-specific way? It remains to be answered, as does the question of how they such regulations could impinge on school-admission practices.
Lathering regulations on participating schools, as Washington is wont to do in education generally, could harm the long-term prospects of school choice by homogenizing the private-school sector, causing private schools to lose the diversity that makes them unique — and distinct from government schools.
Allow states to continue to lead on school choice. The support for school choice expressed by the Trump administration and Education Secretary Betsy DeVos is more than welcome, but their efforts to advance choice through federal policy should be limited to a few key reforms where the federal government has clear authority. That includes advancing choice in the District of Columbia, which is under the jurisdiction of Congress; creating choice for children attending federally managed Bureau of Indian Affairs schools, and establishing school choice for military-connected children across the country.
Today conservative leadership helms a record 68 percent of state legislatures, and with conservatives controlling both legislative chambers and the governorship in 24 states, the opportunity to advance education choice is unprecedented.
State lawmakers across the country recognize the importance of education choice. In legislative session after legislative session, they are moving with more and more urgency to establish options for vouchers, tax credits, and education savings accounts for families. For the sake of good governance, federalism, and the school-choice movement writ large, let’s continue to let them lead.