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School Choice & Charters

North Carolina Considers Big Tax Credit for Private School Vouchers

By Sean Cavanagh — May 25, 2012 2 min read
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North Carolina would become the latest state to offer tax credits in support of vouchers, if a proposal to reward corporations for their gifts to help disadvantaged students attend private schools becomes law.

The measure, which has both Republican and Democratic sponsors, would give tax credits to corporations that contribute to “scholarship funding organizations,” which in turn provide vouchers for students. The total statewide amount of the tax credit initially would be capped at $40 million, and expand over time if enough tax credits are claimed.

Nine states currently offer tax credits for school vouchers, according to the National Conference of State Legislatures. Tax credit programs were the subject of an extensive probe by the New York Times this past week, which reported that some of those programs were not targeting needy students, as they had claimed they would, and cited irregularities in how private-school scholarships were awarded to schools, and families.

The authors of the North Carolina measure say it would “pay for itself” as state and local governments realize “the savings in the difference between the scholarship amount and the average state and local payment,” according to a statement released by House Majority Leader Paul Stam, a Republican and bill sponsor.

The legislation will “open the door for parents to explore educational options available to their children and select the choice that best fits the needs of their family,” argues Stam.

Students would need to be enrolled full-time at a public school during the previous semester to be eligible, or they would have to have to be entering kindergarten or first grade. Families with annual household incomes up to 225 percent of the federal poverty level (about $50,000) would be eligible, and scholarships would top out at $4,000 per year, per student.

Republicans, in many cases with little Democratic support, have made a sustained push to create or expand voucher programs over the past two years, efforts that were helped by big gains the GOP made at the state level in the 2010 elections. The North Carolina legislation, however, counts a pair of Democratic state representatives, William Brisson and Marcus Brandon, as prime sponsors. Republicans control both chambers in North Carolina’s statehouse, and they have feuded often on education and other issues with Gov. Beverly Perdue, a Democrat, who is leaving office after this year, having decided not to run for re-election.

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A version of this news article first appeared in the Charters & Choice blog.