Tax-credit scholarships are saving Rhode Islanders money

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There are no more important beneficiaries of educational choice than the families and students who need K-12 options and opportunity. They are the reason we fight to expand choice in every state, including Rhode Island.

An important element of this conversation, however, is the fact that not only do school choice programs empower parents and change students’ lives for the better, but they also save taxpayers money.

In our new report, The Tax-Credit Scholarship Audit, we looked at 10 tax-credit scholarship programs in seven states between 1997 and 2014. These programs serve 93 percent of all students participating nationwide. Tax-credit scholarships allow individuals and sometimes businesses to reduce their state tax liability by making a private donation to a nonprofit organization that in turn provides scholarships for children to attend private schools of their choice.

What we found is striking: These programs have saved taxpayers at least $1.7 billion since their inception – and that number doubles depending on the number of students who would have enrolled in public schools if not for the program’s financial assistance.

Tax-credit scholarships save money because public schools no longer have to pay much of the cost to educate students who use them, and schools can adjust for the remaining costs over time. Students are able to apply their scholarship funds toward a private school of their choosing, and our research indicates that parent who choose are overwhelmingly more satisfied that parents who don’t.

It’s true that the programs reduce state tax revenues, but the savings, as our study shows, are far greater than that lost revenue. It’s a true win-win for taxpayers and families.

Nationwide, more than 1.2 million tax-credit scholarships have been awarded to students to attend private schools in the nearly two decades since such programs have been available.

Our research found that the Tax Credits for Contributions to Scholarship Organizations program has saved Rhode Island taxpayers between $8 million and $21 million, or $3,400 to $7,300 for every scholarship student.

The only troubling finding in our new report is a not a new finding: We know that school choice programs save money, but it’s often difficult to ascertain whether that money is being saved, reapplied within a state’s K-12 education budget or spent elsewhere.

Policymakers in each state have a real opportunity to show taxpayers not just that their money is being well spent, but where any savings from school choice are being directed, especially if those funds are being used to bolster student learning in other areas.

At the end of the day, we believe every student in America, regardless of ability to pay, deserves to have access to a quality K-12 education that meets his or her needs. Tax-credit scholarships are one piece of the pie, but we can clearly see from this new report that they are being successfully utilized to help Rhode Island students and save Rhode Island taxpayers money at the same time. Dr. Lueken is Director of Fiscal Policy and Analysis for EdChoice that is based in Indianapolis, Ind.

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