The Education Improvement Scholarship Tax Credit made it possible for 275 low-income students to receive private-school scholarships this year while saving the Commonwealth of Virginia almost $745,000. So concludes the Thomas Jefferson Institute for Public Policy in a new published policy brief.
The 2013-2014 school year marks the first year that students received private-school scholarships under the tax credit. The provision provides a 65% state tax credit to donors contributing to eligible foundations awarding scholarships to low-income public school students. Foundations must use at least 90% of the contributions for actual scholarships, and the size of the scholarships is capped at the amount the state would have contributed to the student’s public school education in their school division of residence. Here are the numbers:
Students awarded scholarships: 275
Average size of scholarship: $2,456 per child
Total scholarship dollars awarded: $675,000
Amount donated: $751,000
Cost of tax credit to the state: $488,000
Educational savings to the state: $1,233,000
Total savings to the state: $745,000
A provision of the law requires donors to wait a year after making the donation to take the tax credit. Bills introduced to the General Assembly this year would allow donors to claim the credit the same year.
— JAB
