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The Tax Credit Debate: Arguments For and Against Aid to Private Schooling

November 02, 1981 11 min read
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The following are statements excerpted from a debate on federal tuition tax credits held in Washington on Oct. 22.

Chester E. Finn Jr., professor of education and public policy at Vanderbilt University, spoke in favor of the concept, which is supported by the Reagan Administration. Mr. Finn is a former aide to Democratic Senator Daniel P. Moynihan of New York, who is also a proponent of tuition tax credits.

Albert Shanker, president of the American Federation of Teachers, opposed the proposal.

The debate was part of a seminar on the issue sponsored by the Education Department.


Albert Shanker

We would be in a very different debate if someone would come forward and say that American public schools have served their purpose, that they are no longer any good, that because of all their faults it is really time that they be abandoned, and that there is a strategy for bringing about that abandonment.

As far as I can see, everyone involved in the tuition tax-credit debate, and the voucher debate as well, says nice things about the public schools: that they wish to preserve them, that they wish to strengthen them, that they merely wish to introduce some other values that are important, too.

I think that is important, because we can assume that if people meant to destroy the public schools there would at least be some people who would stand up and say so.

We can analyze the proposals that are before us and raise the question of whether indeed they will end up preserving the public schools--or whether there are some rather grave risks. [We can raise the question of whether] the values that they seek to enhance through these changes will indeed do more than bring about new values and sources of competition--whether they may indeed go much further than that.

My role as an opponent of tuition tax credits and vouchers is to explore a possible future. Obviously, whether this [future] happens or not will depend upon what the rules of the game are, and we’re talking in very general terms.

If we talk about a Minnesota program where they spend [approximately] $2 million in a tuition tax deduction out of $1.4 billion in aid to education--we’re talking about a very, very small amount of money.

If we’re talking about the $1,200 (local) tuition tax credit [proposed for] Washington, D.C., that is something else. And if we’re talking about vouchers, we’re talking about still6something else. Obviously, the amount of movement from public schools to nonpublic schools could be very different depending upon the rules of the game, depending upon the amount of financial support offered.

First, I believe that there’s no point in talking about a tax credit or tax deduction that is so small that it will lead no one to move from public school to private school. If that’s what we are talking about, then why do it? The purpose is to give people choice. And if you give them such a small amount of money that they really can’t do anything with it, you’re not giving them choice.

Therefore, we’re talking about a sum of money that is sufficient to move substantial numbers of people so that they really do have choice. Otherwise we’re not talking about anything at all.

I assume that when people get incentives, those incentives do move them. I’ve been watching for a number of years the advertisements that banks put in the newspapers offering wristwatches, radios, trinkets, and television sets.

The banks know that more people will do something if they have an incentive than if they don’t have an incentive. I think it’s reasonable to expect that if you offer people a $500 tax credit, there will be more people moving over than if you offer them $250. If you offer them $1,200, there are some very simple rules [to explain how many more people will move].

If you have a tax credit of some medium amount, who will move from public schools to private schools? Will it be the poorer students? That is, poorest in terms of achievement, behavior, socioeconomic class? Well, certainly not if the parents have to add some additional money to a tax credit. In that case, it is very clear that the poorest will be ruled out. Besides that, there is always the question of who will be accepted in the private schools. They will be able to select among the students who are lined up.

There is no question in my mind that the first group of students who will move out are those from families that have more, and they will be the better-achieving students--students with fewer problems.

What will happen when those students leave the public schools? Several things:

The reading scores will go down because these are students who are above grade level in reading.

The math scores will go down.

Some of the models that exist for other students within the public schools will no longer be there.

And even if 4 or 5 or 6 or 7 or 10 percent of the students move over to private schools, these are students from more affluent families whose parents now participate in school-board meetings and in the legislative process. They demand federal aid to education, state aid to education. They help build the local budget. It’s possible to move merely [a small percentage of] students out of the public-school system and lose 50 percent of the political influence within a community that supports public education.

As a matter of fact, right now only about 10 percent of the children of this country are enrolled in nonpublic schools, yet the pressure of this group is so great--because of their wealth, because of their affluence, and because tuition tax credits have become a single issue for them--that they were able to get one of our two major political parties to accept it, and the President of the United States to accept it.

What will happen if another 10 percent move from public schools to private schools, in terms of the politics of education in America?

Is there any question, if you move 10 percent more, that you will have a doubling of the private-school enrollment? [And wouldn’t] you also have a doubling of the private-school political power? So what happens the following year? The next group of top students follows. Because they no longer feel comfortable, and because the scores have gone down, the standards have gone down, and so forth.

So we could have a movement [involving] not only the numbers but the declining political power of the public schools to get money.

This issue is not going to be resolved by providing a tax credit. [After you do that], there will be a fight every year as to the proper division of monies between the public and the private sector--that is, how much will the tax credit be?

I agree that equity is an important argument, but once you introduce the equity argument, once you say that there is a public responsibility to pay for children to go to nonpublic schools, there is no reason to avoid the conclusion that you should provide an equal amount.

Why spend $2,700 on a child in the public school and give only $500 or $700 or $1,000 to a child in a private school?

I think it is clear that if this were to happen we could end up with the public schools becoming schools for those children who cannot afford to leave, those children who will not be accepted in nonpublic schools, those children who were in nonpublic schools and were thrown out.

There are other effects:

Tuition tax credits may have the same effect on the cost of private education as Blue Cross/Blue Shield has had on the cost of medical care.

If I were running a private school, and all the parents of the children there were now able to pay $2,000, but I know that tomorrow they will be getting $500 more from the government, I know that now they can afford $2,500 in tuition.

If large numbers of parents move their children to nonpublic schools and start spending more than $2,000 a year for elementary and secondary education, it will certainly have an effect on the future--on how much money families can afford for higher education. [An official of] the Treasury Department, speaking [before a Congressional committee]) several weeks ago, clearly said that any tuition tax credit would not involve any increase in the budget. Funds would be taken from existing programs--which means Title I, handicapped, bilingual education.

It would be money taken from the poorest students and minorities, and it would go to students who are already in nonpublic schools and are already able to pay tuition.

Is this what will happen? I strongly believe there are many places, major sections of the country, where this will happen. But I don’t want to try to prove that the weight of evidence supports this scenario.

I think that what I have to prove is something much less [dramatic]. There are people in the United States who believe the Soviet Union will never attack us. Therefore [they say] we should not spend one single penny defending ourselves. Maybe they’re right, and if they are, we could save an awful lot of money. But if they happen to be wrong, the risk is terrible.

I think that all I have to suggest here is the downside risk that if I am right, this could happen in New York, or Pennsylvania, or Chicago, or in great metropolitan areas across the country.

I suggest that there are millions of students who may find that in their areas, where now there is an imperfect mix, we may end up with a much worse mix.

We may end up providing a separation of those who will be accepted in nonpublic schools from those who will not. The downside risk is too great.

There is no person who values bringing our children together who will roll those dice and take that chance. Because after it happens, if millions do leave the public schools, if public-school buildings are sold, if teachers leave, textbooks are sold, and everything else, it’s rather doubtful that 15 years from now we’ll say: Al Shanker was right; let’s re-purchase the schools; let’s reduce the tax credits; let’s go back to what we had before, because this turned out to be terrible.

With some experiments, you try it, you taste it. If you don’t like it, you don’t eat it again--it doesn’t make any difference. There are other experiments that are irreversible. And I suggest to you that this is a vast experiment, [the consequences of which are] irreversible.

In conclusion, I’d like to deal with a few of the slogans.

Choice. We want choice for all children, all families, including the poor. Obviously, with a tax credit, the choice will still be limited for the poor. The choice will still be there for the rich, and it will allow some people in the middle class to have a choice they now don’t have. But the final element of choice is really not that of the student or the parent. It’s the private school that decides.

I would like advocates of vouchers or tuition tax credits to advocate a system where no school that receives any of this public money is permitted to exclude any child or kick out any child, except on the same rules that exist in the public sector.

Competition. There can be no real competition when you have one system that is required to take everybody and another one that can select anybody it wants. When one system must keep students no matter what their behavioral problems. [When I was a teacher], the toughest kids I had were those kids who were kicked out of parochial school.

When you have a combination of unpopular public policies--busing, bilingual education, restrictions on testing programs, the inability to expel students who regularly are antisocial, school-finance reform--I think it is ridiculous for government to impose a set of [such] policies and then to say that any citizens who do not like these policies will receive governmental assistance to escape them, in a new, governmentally-supported school system where none of these laws will prevail.

If the policies are no good, get rid of them right where they are, then there won’t be this big demand for private schools.

One other issue: I think it’s rather insane that we are discussing the question of tuition tax credits in terms of the federal role in education.

The federal role in education is limited--and we have a President who says that there is no federal role in education and wants to get out. Which means that even when matters of civil rights are concerned--that is the question of education for minorities, the poor, and the handicapped--[he] wants to get out, even when issues of national defense are involved, as they are in the teaching of science, math, and foreign languages.

At the very time the President of the United States says we are getting out of this field--even when constitutional issues are involved and national security is involved--is this the time to take care of the equity of those private-school parents who are spending the money? And this is the time for the federal government to do that?

It is very, very difficult to believe that is happening.

I think the main problem we have in the public schools, aside from excessive regulation, is that they have been very successful. I think our schools did a great job. We did such a good job of educating the overwhelming majority of our people that they can now look down on us.

They are more educated than we are. And I think we ought to acknowledge the success of that institution and support it. Don’t roll the dice and destroy it.

A version of this article appeared in the November 02, 1981 edition of Education Week as Commentary: The Tax Credit Debate: Arguments For and Against Aid to Private Schooling

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