(Note: This Op-Ed originally ran in the Detroit Free Press on Aug. 3, 2007)
If you’re tired of hearing the same old solutions to
intractable public school problems, consider a proposal that enjoys bipartisan
support and would help Michigan save multiple millions, improve public schools
and provide educational opportunity for all children: universal education tax
credits.
Tax credits for elementary and secondary education were
proposed in the 1970s by policymakers such as the late U.S. Sen. Daniel Patrick
Moynihan, a New York Democrat. The idea has been embraced by an unlikely mix of
prominent policymakers, including Democrats like New York Gov. Eliot Spitzer and
Newark Mayor Cory Booker, and Republicans like South Carolina Gov. Mark Sanford
and former Florida Gov. Jeb Bush.
Education tax credits provide a tax cut to parents,
relatives and philanthropists who make financial contributions that enable
children to attend an independent (including private and parochial) school of
their choice. At the preschool and college levels, those investing in education
have long been able to offset costs with tax credits or deductions. Amazingly,
elementary, middle and high schools are the exceptions in the system.
If Michigan were to alter an arcane provision in the state
constitution, universal education tax credits could be implemented, allowing
parents or relatives who pay tuition at independent elementary and secondary
schools to receive a credit against the state income tax or the statewide
property tax. Additionally, low-income families with smaller tax liabilities
could benefit from the generosity of businesses that would throng to contribute
to scholarships.
Why would businesses be generously supportive? For
starters, businesses have paid hundreds of billions in taxes for an education
system that continues to exhibit disheartening achievement, graduation and
remediation trends. Facing global competition, businesses would benefit from
reversing these trends and from the Michigan business tax credit they would
receive for contributing directly to workforce development.
In Pennsylvania, more than 2,300 businesses have
contributed to scholarship-granting organizations since that state’s education
tax credit was adopted in 2001. Pennsylvania recently raised the limit on its
education tax credit due to the popularity of the program. Indeed,
Pennsylvania’s Democratic Gov. Ed Rendell is proud of doubling the total amount
of education tax credits during his administration.
Florida, Arizona, Rhode Island, Iowa, Illinois and
Minnesota also offer education tax credits and/or deductions.
Education tax credits would save Michigan’s school aid fund
about $680 million annually if only 20 percent of current public school students
benefited from a credit valued at half of last year’s state foundation
allowance. The other half of the allowance could be used to increase public
schools’ per-pupil revenues.
A tax credit would help thousands of children escape
failing schools. Average tuition for a Michigan independent school — absent
grants from a church or other sponsor — is about $4,700, according to
preliminary results of an ongoing Mackinac Center survey. That amount is less
than half of public schools’ revenues per pupil.
After the tax credit, parents would only have to contribute
about $1,200 for tuition, a bill that most families would likely be willing to
pay if it allowed them to secure a quality education for their children.
A growing body of research on programs around the country
and the world indicate that implementing the program would expose public schools
to the positive benefits of competition in a larger education market, thereby
helping them improve.
Education tax credits would also help Michigan realize the
ideal of public education: equal access to educational opportunities for all
children. Today, most children in the public system attend a school based on
their ZIP code, not their individual needs. Unless they can afford a house in
their chosen district, most parents are left with few alternatives. Districts
limit the enrollment of students not assigned to their boundaries and many
charter public schools are full.
Michigan policymakers should embrace this bipartisan vision
and give voters the opportunity to repeal the Draconian constitutional amendment
blocking education tax credits. What could be better than saving school revenue
while allowing all Michigan children equal educational opportunities?
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Dr. Ryan S. Olson is director of education policy for the
Mackinac Center for Public Policy, a research and educational institute
headquartered in Midland, Mich. Permission to reprint in whole or in part is
hereby granted, provided that the author and the Center are properly cited.
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