Tax Credit Scholarships Educate 1,400 Kids and Save Virginia $3 Million

St. Andrew's School in Richmond provides free educations to low-income students, predominantly minorities with a boost fro the Education Income Scholarship Tax Credit Program.
St. Andrew’s School in Richmond provides free educations to low-income students, predominantly minorities, with a boost from the Education Income Scholarship Tax Credit Program.

by James A. Bacon

When backers of the Education Improvement Scholarship Tax Credit were promoting their idea of giving philanthropists a 65% tax credit for donations to scholarship foundations, they predicted that the program would spur private-school scholarships and save the state money. Their logic was simple: For every 65 cents it lost in tax revenue, the state would save 90 cents in state aid to localities it didn’t have to pay.

But simple ideas often clash with messy reality. Among other potential complications, some recipient students might have enrolled in private school even without a scholarship. Other students might receive scholarships from more than one foundation. Now that the scholarship program has been in effect for three years, how does theory compare to actuality?

Pretty well. In 2014-2015 the tax credit helped nearly 1,400 kids from low- and moderate-income families attend private school. At the same time, it saved the Commonwealth of Virginia nearly $3 million in funding to localities. Those are the conclusions, based on actual donation, tax-credit and scholarship reports, reached in a legislative policy analysis by Christian Braunlich, past president of the Virginia  State Board of Education and vice president of the Thomas Jefferson Institute for Public Policy.

Here’s what the key numbers look like:


But the Old Dominion can do better. While Virginia has raised $6 million in scholarship money through its tax credit, Florida raised $358 million to help nearly 27,000 low-income students, Georgia has raised $58 million to assist 13,000 students, and Pennsylvania has raised $100 million to benefit 38,000 students. True, all three states are more populous than Virginia, but the key differentiator is that they offer tax credits of 90% to 100%.

Hiking Virginia’s tax credit from 65% to 90% would generate an additional 3,800 scholarships in Virginia, and increase the size of the scholarships, Braunlich projects. The state still would fare no worse fiscally than if the tax credit didn’t exist. Meanwhile school districts would be able to devote the same local and federal funds to a smaller number of students.

Bacon’s bottom line: Let’s expand the tax credit. I’d be interested to hear arguments against it, but I suspect critics will sing the old refrain that helping children attend private school will hurt public schools by depriving them of resources (downright false) or “cherry picking” the best students (highly debatable and irrelevant). The underlying motive, of course, is to preserve the public school monopoly and protect the interests of all those who feed at that trough. Commitment to the educational establishment trumps the welfare of low-income children.

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2 responses to “Tax Credit Scholarships Educate 1,400 Kids and Save Virginia $3 Million”

  1. LarrytheG Avatar

    how much does private school cost these kids and who pays for the part not covered by the tax break scholarship?

    Is any kid allowed to attend regardless of their demographic?

    does the demographic of these private schools match the demographic of public schools – i.e. is there really equal opportunity to attend?

    how about the academic standards and performance?

    is there transparency and accountability for academic performance?

    you can’t take tax dollars and divert it to private schools… without some safeguards to assure that tax dollars are delivering an equivalent value.

    And if we find out they are actually delivering an equivalent or better product – I’m all for it.

    but I’m not buying the “give us the money and don’t hold us accountable” argument … that’s totally bogus.

  2. LarrytheG Avatar

    it walks and talks a little like State-funded Massive Resistance Christian schools, eh?

    been looking at the “regs” and you know the amazing thing?

    THIS is WHERE new regs come from… new law… go read the plethora of regs associated with this …. you have to be a dang philadelphia lawyer to really understand them. I truly expect someone would have to consult with a tax expert to do this and the schools that would be eligible would also have to fulfill a plethora of regs… however none that I see that would keep these schools from becoming the K-12 counterpart to Higher Ed for-profit businesses that scam those with education vouchers.

    In other words – these “scholarship” schools do not have to meet any requirements for academic performance or assure – for instance, that anyone of any religion is not discriminated against by the school’s religious affiliations and preferences.

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