School Choice & Charters

Growth of ‘Neovouchers’ Sparks Debate Over Policies

December 16, 2008 5 min read
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Tax-credit-supported scholarships are fast outpacing vouchers as a state policy tool for promoting private school choice, the author of a new book on the topic said this week. Whether that growth is good news or bad depends on whom you ask.

Kevin G. Welner, an associate professor at the University of Colorado at Boulder who has written a new book on the topic, uses the term “neovouchers” to describe state policies that grant tax credits to individuals or businesses for donations they make to organizations that provide students with financial aid for private schools.

In remarks at a forum here last month in the nation’s capital, Mr. Welner voiced concerns about the increasingly popular approach.

For starters, he charged, the policies are “unproven, largely unstudied, and largely beyond the reach of solid evaluation.”

But others participating in the Dec. 15 discussion at the American Enterprise Institute, a Washington think tank, had a much different take.

Kevin P. Chavous, a former Democratic City Council member in the District of Columbia, pointed to disappointing results in the nation’s urban public school systems, such as low graduation rates, as justification for trying the tax-credit approach.

“We know what is not working,” said Mr. Chavous, who is also the board chairman for Democrats for Education Reform, a New York City-based political action committee. “Anything that is remotely different will get pushback from the status quo, even if the status quo isn’t serving children.”

The idea of tuition tax credits is that a state offers individuals and, in some cases, businesses, a credit for donating money to nonprofit, privately run voucher programs. Currently, six states have such policies in place: Arizona, Florida, Georgia, Iowa, Pennsylvania, and Rhode Island.

Mr. Welner, the director of the Education and the Public Interest Center at the University of Colorado, estimates that 100,000 students are receiving tuition assistance this year under state tax-credit policies, almost twice as many as receive vouchers under publicly financed voucher initiatives.

“Although much less well known and understood than conventional vouchers, neovouchers actually dwarf conventional vouchers in terms of their scope,” said Mr. Welner, whose new book on the issue is titled NeoVouchers: The Emergence of Tuition Tax Credits for Private Schooling.

State Approaches Vary

In describing the advent of tuition tax credits, Mr. Welner noted that they provide some advantages to choice proponents over traditional voucher programs. For one, he said, they are “relatively unencumbered by the [political] baggage of past voucher battles.”

Also, he said, they appear better insulated from legal challenges. In a commentary for Education Week earlier this year, Mr. Welner explained: “Since no new money ever actually enters the state’s coffers, proponents can argue that state money has not been spent on religious education.”

That reasoning, he noted in the commentary, was adopted by a majority of judges in a 1999 ruling by the Arizona Supreme Court on one of that state’s programs.

At the forum, Mr. Welner highlighted some of the ways tuition tax-credit initiatives vary from state to state.

“Each state has its own set of rules, and it’s important to understand the differences,” he said.

For instance, in Arizona, Florida, and Georgia—which enacted its program this year—the tax credits equal 100 percent of the amount donated. In other states, he said, the credit ranges from 65 percent to 90 percent of the donation amount.

While some states provide credits exclusively either to individuals or corporate donors, others extend them to both groups.

Also, state policies on who is eligible to receive scholarships vary. For instance, in Florida, tuition assistance is targeted at low-income families.

Mr. Chavous said he supports that idea.

“I”m a firm believer in means testing,” he said. “I think that responds directly to the crisis of where we are.”

Mr. Welner argues that most states fail to demand sufficient data on their programs or call for rigorous evaluations.

But Adam B. Schaeffer, a policy analyst at the Cato Institute, a Washington-based free-market think tank, contends that even without significant data on particular efforts, a lot of information on school choice exists more broadly, and he finds it encouraging.

“We’ve been experimenting with school choice for more than 50 years,” he said. “I think it makes sense to go with what looks to be promising.”

A Question of Capacity

Compared with conventional voucher programs, Mr. Welner said, tuition tax credits tend to hand over substantial decisionmaking authority to wealthier taxpayers. He notes that only corporations or private citizens who file itemized tax returns are eligible for the credits.

“The reality with neovoucher policies is that parents’ roles ... are largely subordinated to decisions made by donor taxpayers and the school tuition organizations they donate to,” he said.

Mr. Welner also expressed concern that both vouchers and tuition tax credits tend to benefit “active parents” and risk producing a “cycling downward” in the quality of public schools, where other students with less active parents would remain.

Sheila Simmons, the director of the human and civil rights department at the National Education Association, who also took part on the panel, echoed that concern. “We have to look at the masses of children,” she said. “We need to change public schools, we need to change public education.”

Ms. Simmons also asserted that private schools lack the capacity to serve the large number of students who need better schools.

“The capacity issue is a serious one,” replied Mr. Shaeffer from the Cato Institute. “It’s obviously going to take time for private schools to ramp up their capacity, for new ones to open.”

But he maintains that “if you actually free the money up and give parents control over that money and they start choosing private schools,” the market will respond and sufficient options will emerge.

A version of this article appeared in the January 07, 2009 edition of Education Week as Growth of ‘Neovouchers’ Sparks Debate Over Policies

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