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Annual Privatization Report 2013

2012 School Choice Roundup In the States

Subsection of Annual Privatization Report 2013: Education

Katie Furtick
April 29, 2013

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In 2012 the United States continued its forward momentum to improve education through the implementation and expansion of school choice initiatives. These initiatives give parents the ability to choose the school that best serves their child’s unique needs, whereas the traditional model assigns a school by geographic default.

Five states enacted brand new school choice programs in 2012, which went into effect for the 2012—13 school year. Three of those five states—Mississippi, Virginia and New Hampshire—created their first ever school choice programs. Collectively, in the 2012—13 school year more than one million children are eligible to participate in one of 39 school choice programs. These programs include 18 voucher programs, 14 scholarship tax credit programs, 6 individual tax credit or deduction programs, and 1 education savings account program.

Growing demand and strong public support for charter schools pushed ballot initiatives through state legislatures in Georgia and Washington. Washington has become the 42nd state to permit charter schools, and Georgia has amended its state constitution to permit statewide authorizing. Nationally, 270,000 more students enrolled in charter schools in 2012 and 500 new public charter schools opened their doors for the 2012—13 school year. These new schools have brought the total number of charter schools to approximately 6,000 schools nationwide, serving over 2.3 million students.

According to the Alliance for School Choice, several states strengthened existing school choice programs and others implemented brand new school choice programs in 2012.1 New and strengthened programs are listed below by state. The tables following each description summarize either the new program or the existing program’s expansion.

Arizona: Arizona expanded its Arizona Empowerment Scholarship Accounts Program. The program was passed by the legislature in 2011 and is the nation’s first Education Savings Account (ESA). Empowerment Accounts allow parents whose children are eligible to remove their children from the public school system and receive the money the state would have spent on them in an education savings account. Every quarter, the state deposits up to 90 percent of the base support level of state funding into a parent-controlled ESA. Parents can then use that money to pay for a variety of education options including private school tuition, private tutoring, special education services, homeschool expenses, textbooks and virtual education, enabling them to customize an education for their child’s unique needs.

Prior to 2012, students were eligible for an ESA if they were resident in Arizona, were identified as having a disability, and had attended a public school for the first one hundred days of the previous school year or received a School Tuition Organization Scholarship. The program expanded by increasing student eligibility to include students attending schools rated “D” or “F”, students from military parents, and foster care children including those who had been adopted or permanently placed. The program provided ESAs to 142 students with special needs during the 2011—12 school year. The expanded eligibility added an additional 300 applications for the 2012—13 school year.2

Arizona also improved its Tax Credits for School Tuition Organizations, the nation’s longest-running scholarship tax-credit program. Legislation signed into law in February doubled the amount donors can give to scholarship tuition organizations to $1,000 for individuals and $2,000 for married couples. The Tax Credits for School Tuition Organizations program served more than 25,000 students during the 2011—12 school year.

Table 1: Arizona Program Expansion

Program Name Type Participating Students 2011—12 Average Scholarship Change for 2012—13
Empowerment Scholarship Accounts ESA 142 $13,600 Expanded eligibility to students attending "D" or "F" schools, whose parents served in the military, and students in foster care.
Tax credits for School Tuition Organizations Tax Credit Scholarship 25,343 $1,791 Doubled amount donors can give to STOs.

Sources: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012). Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), pp. 10-16.

Colorado: The Douglas County School Board in Colorado approved the Choice Scholarship Pilot Program for the 2011—12 school year. This program offers vouchers to Douglas County School District students that go toward tuition at the participating private school of their choice. Thus far, 31 private schools have applied to participate in the program. Up to 500 students may receive vouchers worth either the cost of private school tuition or 75 percent of the per-pupil public revenue ($4,575 for 2011—12), whichever is lower. If more than 500 students apply for the voucher, a lottery is conducted to determine the recipients. To be eligible, students must be residents of the Douglas County School District for at least one year and must currently be attending a DCSD public school. At press time, the Choice Scholarship Pilot Program is on hold pending a legal challenge in the Colorado courts.

Table 2: Colorado New Program

Program Name Type Amount Awarded Eligibility
Choice Scholarship Pilot Program Voucher Private school tuition or 75% of per pupil public revenue, whichever is lower. Must attend Douglas County public school; limited to 500 students with recipients determined by lottery.

Source: Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), p. 18.

Florida: Florida lawmakers passed legislation to increase the cap on donations to Florida’s Tax Credit Scholarship program by $10.25 million for the 2012—13 school year. This increase will raise the state-wide cap to $229 million annually. The bill also extends eligibility so that students can receive scholarships in grades 2 through 5 without attending a public school the previous year. With the eligibility expansion, participating private schools are allowed to administer the Florida Comprehensive Assessment Test, while the state Department of Education can suspend those participating schools that demonstrate a “previous pattern of failure to comply” with state regulations. During the 2011—12 school year 37,998 students participated in the program.

Table 3: Florida Program Expansion

Program Name Type Participating Students 2011—12 Average Scholarship Change for 2012—13
Tax Credit Scholarship Tax Credit Scholarship 37,998 $3,747 Increased the cap on donations by $10.25 million to reach a total of $229 million annually.

Sources: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 3. Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), pp. 24.

Louisiana: Louisiana made great strides in school choice reform by enacting legislation to expand the New Orleans Parish voucher program statewide—renaming it the Student Scholarship for Education Excellence. Students are eligible to participate if their household family income is less than 250 percent of the federal poverty rate and they are entering kindergarten or attend public schools rated C, D or F. The expansion of the program will extend eligibility to an estimated 380,000 additional students.3

Table 4: Louisiana Program Expansion

Program Name Type Participating Students 2011—12 Average Scholarship Change for 2012—13
Student Scholarships for Educational Excellence Voucher 1,912 $4,594 Expanded eligibility from those in the New Orleans parish to all students in Louisiana whose family income is less than 250% of the federal poverty rate and are attending a public "C", "D" or "F" school.

Sources: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 2. Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), pp. 42-43.

In addition to expanding New Orleans’s voucher program statewide, Louisiana Governor Bobby Jindal signed into law a new Scholarship Tax Rebate Program, which provides scholarships to eligible students to attend the private school of their parents’ choice. Scholarships are capped at the cost of private school tuition and fees, or 80 percent (for students in grades K—8) or 90 percent (for students in grades 9—12) of the state average per-pupil funding, whichever is lower. The program resembles tax credit scholarship programs in that donors receive a 95 percent tax rebate on the donation amount. Under the legislation, students from families with incomes of less than 250 percent of the federal poverty guideline who are entering kindergarten or attending a Louisiana public school are eligible for a scholarship. Students attending public schools with a “D” or “F” rating receive first priority.

Table 5: Louisiana New Program

Program Name Type Amount Awarded Eligibility
Scholarship Tax Rebate Program Tax Credit Scholarship Capped at cost of tuition/fees, 80% state average for K-8 or 90% state average for 9—12, whichever is less. Children of families with income less than 250% of federal poverty guideline entering kindergarten or attending a public school; students at D or F schools receive first priority.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 1.

Mississippi: Mississippi passed legislation to enact a voucher program designed for students diagnosed with dyslexia. The Dyslexia Therapy Scholarship program provides scholarships for students to attend the public or private school of their choice that has an existing dyslexia therapy program. Eligible students are those in grades 1—6 who are diagnosed with dyslexia. Scholarships are capped at the amount equal to the Mississippi Adequate Education base student cost.

Table 6: Mississippi New Program

Program Name Type Amount Awarded Eligibility
Dyslexia Therapy Scholarship Voucher Capped at amount equal to the MS Adequate Educ. Prog. Base student cost. Students in grades 1—6 diagnosed with dyslexia.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 2.

New Hampshire: The New Hampshire legislature successfully overrode a veto from the governor and passed legislation creating a scholarship tax credit program for students of low- and middle-income families. The Education Tax Credit program enables students to receive up to $2,500 to attend the private school of their choice. Businesses donating to the program can receive a tax credit equal to 85 percent of their donations. The program has a statewide cap of $6.8 million in business donations for the program’s first year, which can rise in subsequent years. Any time business donations reach 80 percent of the statewide cap, the cap will increase by 25 percent the following year.

Table 7: New Hampshire New Program

Program Name Type Amount Awarded Eligibility
Education Tax Credit Tax-Credit Scholarship Students may receive up to $2,500 to attend a private school of their choice, subject to a statewide $6.8 million cap in business donations. If in any year 80% of the cap is reached it will increase by 25% the following year. Students from low- and middle-income families.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 2.

Ohio: In Ohio, the Cleveland Scholarship and Tutoring program expanded the ability for students to participate by eliminating the parent contribution portion of the program. Prior to 2012, parents whose children received scholarships had to contribute 25 percent of the scholarship, and those designated at low-income had to contribute 10 percent. Removing the parent contribution will allow more families to afford to participate in the program. More than 5,600 students participated in the program during the 2011—12 school year.

Table 8: Ohio Program Expansion

Program Name Type Participating Students 2011—12 Average Scholarship Change for 2012—13
Cleveland Scholarship and Tutoring Program Voucher 5,600 $2,943 Eliminated parent contribution portion of the program.

Sources: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 3. Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), pp. 54-55.

Pennsylvania: Pennsylvania introduced the Educational Opportunity Scholarship Tax Credit program, which offers scholarships to students currently attending the state’s worst performing schools. The program offers scholarships to cover private school tuition and fees up to a maximum of $8,500. Students are eligible for the program if they live in the attendance boundary of the bottom 15 percent of low-performing schools and their family’s income does not exceed $60,000 (an additional $12,000 is allowed for each dependent). From July 2013 the family income eligibility requirement will rise to $75,000 (with an additional $15,000 allowed for each dependent). Students whose family’s household income qualifies them for free or reduced-price school lunch are given priority access to the program. Participating businesses may donate up to $400,000 in FY 2012—13 and up to $750,000 the following year. Businesses that donate may receive a 75 percent tax credit on their donation for a one-year donation, and a 90 percent tax credit on their donation for a two-year donation. For now, the state has capped business donations to the program at $50 million per year.

Table 9: Pennsylvania New Program

Program Name Type Amount Awarded Eligibility
Educational Opportunity Scholarship Tax Credit Tax-Credit Scholarship Scholarships cover tuition and fees up to $8,500 with a $50 million statewide cap on business donations. Students living in district of bottom 15% of low-performing schools with family income less than $60,000 (+ $12,000 for each dependent). Preference given to students qualifying for free or reduced-price lunch.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 1.

Pennsylvania also expanded its Education Improvement Tax Credit program by broadening student eligibility as well as increasing the donor tax credit cap. Beginning in July 2013 students from families whose income is less than $75,000 (with an additional $15,000 per additional dependent) will be able to participate in the program, up from $60,000 in 2011.4 The individual donor tax credit cap was increased to $400,000 in FY 2012—13 and will rise to $750,000 in FY 2013—14. The overall cap on tax credits also increased from $44 million in 2011 to $60 million.

Table 10: Pennsylvania Program Expansion

Program Name Type Participating Students 2011—12 Average Scholarship Change for 2012—13
Educational Improvement Tax Credit Tax Credit Scholarship 40,876 $1,165 Increased the cap on tax credits from $44 million to $60 million. Also expanded eligibility from family income of $50,000 + $10,000 per child to family income less than $75,000 + $15,000 per child.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 3. Paul DiPerna et al., 2012 ABCs of School Choice, (Indianapolis, IN: The Friedman Foundation for Educational Choice, 2012), pp. 72-73.

Virginia: Virginia introduced its first school choice program, the Education Improvement Scholarships Tax Credits program. Students from families with an income of less than 300 percent of the federal poverty guideline are eligible to receive scholarships to attend the private or public school of their choice. Scholarships cover tuition, fees and materials or up to 100 percent of the state average per-pupil funding, whichever is lower. Individuals or companies who donate to a scholarship foundation may receive a 65 percent tax credit on their donation. The individual/company donation cap is $50,000 and the statewide cap is $25 million.

Table 11: Virginia New Program

Program Name Type Amount Awarded Eligibility
Educational Improvement Scholarships Tax Credits Tax-Credit Scholarship Capped at cost of tuition/fees/materials or 100% of state per-pupil average, whichever is lower. Tax credits are capped at $25 million statewide. Students from families with incomes of less than 300% of the federal poverty guidelines.

Source: Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children, Alliance for School Choice, 2012), p. 2.

» Return to Annual Privatization Report 2013: Education
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Endnotes

1 Breakthrough Victories for Children: Progress in 2012, (Washington, DC: American Federation for Children Alliance for School Choice, 2012).

2 J. Huppenthal, (2012, June 17). “Arizona Continue Leadership in School Choice”, The Arizona Republic, January 2013, http://goo.gl/oNV7c

3 2012 Private School Choice Accountability Update 2012, (Washington, DC: American Federation for Children Alliance for School Choice, 2012).

4 Pennsylvania Department of Community & Economic Development, Opportunity Scholarship Tax Credit Program, http://goo.gl/J6eDs, December 31, 2012.


Katie Furtick is Policy Analyst


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