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Top Dem. Senators Ask for Federal Study of Tax-Credit School Choice Programs

By Andrew Ujifusa — April 14, 2017 1 min read
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Three Democratic senators have asked the Government Accountability Office for more information about states’ tax-credit K-12 choice programs.

In a Thursday letter, Sens. Patty Murray of Washington, Sheldon Whitehouse of Rhode Island, and Ron Wyden of Oregon said they are interested in more information about these programs given “the strong possibility of federal legislative activity on tax-credit vouchers at the federal level in the near future.” Murray is the top Democrat on the Senate education committee, while Wyden is the top Democrat on the Senate finance committee, which would be the committee responsible for writing a tax credit for private school scholarships into the federal tax code. Whitehouse is also on the Senate education committee.

The senators asked the GAO to examine these four questions about tax-credit programs:

  1. How have states structured tax credit voucher or incentive programs?
  2. What financial accountability regulations—including any requirements intended to guard against fraud, waste, and abuse—have states established for organizations that administer and manage the programs?
  3. How have selected organizations administered tax credit voucher or incentive programs (including any steps taken to ensure transparency, efficiency, and accountability)?
  4. How have selected states monitored these programs? What are the best practices and the challenges the programs have encountered?

Noting how these programs vary across states, the three senators wrote to the GAO that, “These inconsistencies make it challenging for policymakers to assess the consequences of of instituting these types of tax credit schemes on fiscal accountability.”

We wrote a few months ago that tax-credit scholarships could be one of several ways that President Donald Trump’s administration and Congress could use to promote school choice from Washington. There are two main paths for new tax-credit legislation on Capitol Hill, although each of them has its own challenges.

Strictly speaking, tax-credit scholarship programs and vouchers are structured differently. Tax credit scholarships function through donations from organizations to scholarship-granting organizations in exchange for tax credits, while vouchers use payments from state governments to parents. (The District of Columbia also has a voucher program.)

Read the full letter.