School Choice a Hot Topic in State Legislatures Nationwide

State battles over school choice yield mixed results

In state legislatures across the nation, battles over expanding families’ access to educational choices continued to rage this spring.

In Arizona, the legislature reached a budget agreement with Gov. Janet Napolitano (D) on May 6 to create corporate income tax credits for organizations that contribute to K-12 scholarship programs, and to eliminate the marriage penalty on individual scholarship donations.

Napolitano, who has vetoed similar bills in the past, said earlier this year she would deny the legislation unless the legislature agreed to fund all-day kindergarten.

Instead of vetoing the school choice bill, however, as she had already done to a similar bill earlier in the session, Napolitano agreed to an increase in the number of scholarships created by the existing state tax credits, in exchange for legislators dropping a voucher proposal and increasing funding for all-day kindergarten. The school choice provisions will create $5 million in tax credits beginning in 2006, to provide scholarships for low-income children.

“Milestone Victory”

“This is a milestone victory for school children in Arizona,” Alliance for School Choice President Clint Bolick said in a statement. “The governor and the legislature elevated statesmanship over partisan politics and put the well-being of children before the demands of special interests.”

According to a survey sponsored by the Milton and Rose D. Friedman Foundation, 91.4 percent of Arizonans supported one or more of the five school choice proposals pending in the legislature this spring, with 65.6 percent “strongly” in favor of one or more of the programs.

Strides Toward Choice

As School Reform News went to press, Texas legislators were considering three bills that would allow students to transfer to private schools using tax-funded vouchers. Two would authorize vouchers in Dallas and other urban districts; the third would set up a statewide program.

The state House education panel was expected to choose one of the bills for a vote on the House floor sometime in May. Gov. Rick Perry (R), Lt. Gov. David Dewhurst (R), and House Speaker Tom Craddick (R-Midland) all supported a pilot program to allow students in low-performing schools to use taxpayer-funded vouchers to attend private schools.

In Indiana, state legislators deleted the school voucher component from a bill that would have allowed students in Indiana’s 51 lowest-performing schools to exit to the public or private school of their choice. The remainder of the bill gives Indiana families $1,000 in tax credits to offset the extra expenses associated with private and home schools.

The plan creates tax credits for families who make less than $33,000 a year. Those making up to $66,000 would be eligible within two years. Supporters of the more robust voucher proposal say the $1,000 tax credit isn’t enough to help the poorest children, whose families can’t afford to make up the balance of tuition. The revised version of the bill had yet to make its way through both the House and Senate at press time.

In Iowa on April 20, the state House of Representatives passed the School Tuition Organization Tax Credit, which allows individuals to receive a tax credit for donations to a tuition organization, creating scholarships for low-income children to attend the school of their choice. The organizations must give priority for the scholarships to students from families whose incomes are less than 200 percent of the federal poverty level. The bill is currently being considered in a Senate Ways and Means subcommittee.

Bleak Prospects

But in several states, school choice proposals stalled in the legislature.

In Florida, Gov. Jeb Bush’s (R) proposal to create a new program that would offer private school vouchers to students who fail state reading tests appeared stuck in the state Senate. Legislators were hesitant to expand the state voucher program until the Florida Supreme Court has ruled on its constitutionality; oral arguments in that case are scheduled for June 7.

Meanwhile, the state legislature debated a voucher accountability bill to regulate Florida’s existing school choice programs. The potential regulations include requiring schools to measure student progress using one of four standard tests, requiring schools to prove fiscal soundness until they are at least three years old, and allowing unscheduled annual visits by a state auditor.

An additional regulation, pertaining to Florida’s McKay vouchers for disabled students and corporate tax credit vouchers for low-income students, would prohibit participating private schools from discriminating against students on the basis of religion.

This year, 14,937 children received McKay vouchers, and an additional 11,231 received corporate tax credit vouchers.

A final accountability bill was still pending in the legislature at press time.

Cold Reception up North

In Minnesota, Gov. Tim Pawlenty’s (R) $4 million tax credit scholarship plan to allow 1,500 low-income students in failing schools in Minneapolis and St. Paul to attend private schools ran into snags. The Senate Education Committee voted on April 5 to keep it from moving on to another committee, and the House Education Committee voted to table the House version of the bill on April 3.

Similarly, Missouri legislators throttled a bill proposing scholarships for 10,000 children in failing schools, funded by $40 million in business and individual tax credits, by adding three amendments that made it unfeasible. One would have delayed implementation of the tax credit until after the state’s education formula was fully funded, in a state where the economy is so weak that doing so could take several years.

Controversy over Costs, Savings

In a March 2004 report of the South Carolina Policy Council, Fiscal Impact of the Universal Tax Credit Proposal, Clemson University economist Cotton Lindsay found the state would save hundreds of millions of dollars in education costs by implementing a tax credit program.

“Public school spending is tied very closely to the number of students in the school–each child who leaves results in immediate cost reductions. The public school no longer has the cost of educating a tuition-tax-credit child, but still keeps all the local and federal dollars that would be spent on that child,” Lindsay concluded in the study. “As a result, South Carolina public school districts will have more money each year per student.”

A fiscal impact study of the Put Parents in Charge Act by the state Board of Economic Advisors, released in mid-April, claimed paying private school tuition would cost South Carolina as much as $231 million in revenue in five years.

Mixed Results

The South Carolina House committee voted 13-9 on April 18 to let the state Department of Education test-drive tax credits in two school districts for 11 years. One district would be chosen from the top 25 percent by median income and the other would come from the bottom 25 percent.

But on May 4, legislators voted 60-53 to table the bill, effectively killing it for the rest of the legislative session.

A modest plan for 1,200 vouchers for first graders in New Hampshire was dropped in the Senate Finance Committee on April 7 after a dispute over its funding.

For More Information…

The report by Cotton M. Lindsay, Fiscal Impact of the Universal Scholarship Tax Credit Proposal, published by the South Carolina Policy Council in March 2004, is available online at

Lindsay’s March 2, 2005 report, Put Parents in Charge: The Positive Fiscal Impact, is available online at

Lisa Snell is director of education and child welfare at Reason Foundation. She formerly taught speech courses at California State University, Fullerton.