School Choice Progress Far from ‘Bad Policy’

The average  tuition tax-credit scholarship was worth about $3,450 in 2017, not even a third of the per-pupil funding of about $11,650 for public schools.

By Kyle Wingfield

A summertime surprise is roiling the Georgia GOP’s gubernatorial primary.

A defeated candidate recently released a recording in which Lt. Gov. Casey Cagle said he supported a school-choice bill he deemed “bad policy,” merely to prevent a big campaign donation to a rival candidate. Now Cagle, who faces Secretary of State Brian Kemp in next month’s runoff, is on the defensive.

Whatever one makes of the politics of it all, was this bill truly “bad” policy? Not in the least.

House Bill 217 raised the cap on the state’s popular tuition tax-credit scholarship program to $100 million from $58 million. The program allows donors to non-profits awarding scholarships for private-school tuition to claim a dollar-for-dollar credit against their state income-tax liability.

The scholarships give students educational choices, whether they are zoned for low-performing public schools or being bullied at good schools.

To attack the program, critics usually rely on two arguments. First they claim, baselessly, it’s simply a wealth transfer to the already wealthy. They also claim, equally spuriously, the program deprives public schools of funding and thus undermines public education.

Let’s tackle these in reverse order. To the extent funding is an issue for Georgia’s schools, it’s not because of tax-credit scholarships. The “austerity cuts” to Georgia’s k-12 schools were always far larger than the sum of these tax credits. And this year, legislators managed to end those cuts while also raising the cap.

For context, the new cap of $100 million is about 1 percent of the $9.9 billion the state alone will spend on k-12 education next year – which itself is typically only half of all tax money allocated to Georgia’s public schools. (In fiscal 2017, the total was $20.3 billion.) What’s more, the average tax-credit scholarship was worth about $3,450 in 2017, not even a third of the per-pupil funding of about $11,650 for public schools. That meant more resources per student remaining in public schools, not fewer.

If this is a scheme to sink public education, then, it’s a lousy one. But what about the notion these scholarships simply go to “the rich”?

Data collected and reported by the Revenue Department show three in four families receiving these scholarships earned less than $66,334 per year, and almost half earned less than $31,719. (These and the figures that follow are for 2017.) These families were so “rich” that many of their children qualified for free lunches at school. Many would also have qualified for Obamacare’s Medicaid expansion, which the loudest critics of tax-credit scholarships happen to support.

But what of that last one-quarter of scholarship recipients? Weren’t they “rich”?

That depends on how you define “rich,” and it’s worth noting just how dramatically some critics change their tune when we change the subject to health care.

The state data show scholarship families in the top quartile of income – the ones earning at least $66,334 per year – had an average of three dependents. So, think of a family of five.

Again, the average tax-credit scholarship in 2017 was worth about $3,450. In metro Atlanta, a family of five qualified for the same amount in subsidies for an Obamacare health plan if it made $82,000 per year. By the critics’ definition, aren’t we also subsidizing health insurance for “the rich”?

In Savannah, a family of five got about $3,450 of Obamacare subsidies at $75,000 of income. In Columbus, it was at $84,000 of income. In Augusta, $108,000 of income. In Albany and Macon, $114,000 of income.

Why do those who support helping these “rich” families buy health insurance object to giving them choices for their children’s education?

The critics are the ideologues here. Bolstering school choice is not a “bad policy” for Georgia. It’s an essential one.

Kyle Wingfield is president of the Georgia Public Policy Foundation, an independent, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (June 15, 2018). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.