Key Review Takeaway: Tax-credit scholarship programs probably incur more costs than savings for state and school districts, placing financial strain on state budgets and driving the need for future budget cuts.
BOULDER, Colo., Sept. 26, 2023 /PRNewswire-PRWeb/ -- A recent report from the Georgia Department of Audits and Accounts examines the monetary costs and benefits of the state's Qualified Education Expense Tax Credit (QEEC), a voucher policy that provides a public subsidy for families to pay for private school tuition. A review of the report, however, contradicts its claim that the policy provides a net fiscal benefit to the state budget.
David Knight of the University of Washington reviewed Qualified Education Expense Tax Credit: Economic Analysis, and he found several methodological challenges that undermine the report's conclusions and its usefulness.
One key claim in the report is that the tax credit results in $81 million of forgone state tax revenue per year. Another key claim is that the vouchers incentivize almost 20,000 students per year to choose private schools instead of public, thus removing the cost of educating those students from state and local budgets. Based largely on these two claims, the report concludes that QEEC provides a net fiscal benefit for Georgia's state budget.
Professor Knight points to a lack of data about how many students per year do actually switch from public to private schools because of the voucher subsidy and incentive. In fact, existing private-school families have extremely strong incentives to accept the public subsidies. And if most of the vouchers are provided to support these students who were already planning to attend a private school, then the policy only subsidizes private school students with funding that could otherwise be returned to taxpayers or invested in the state's public education system, which is open to all students.
While these calculations are all necessarily grounded in some speculation because of the unregulated elements of the voucher policy and the resulting lack of hard data, the most likely result of tax credit scholarship programs like QEEC is that the state and school districts incur more costs than savings, placing financial strain on state budgets that could require future cuts.
Because the report relies on unrealistic assumptions, its suggestion that program benefits outweigh costs is tenuous and risks misleading state education leaders. Instead, state leaders should invest educational dollars in policies that have a positive return on investment and therefore help, rather than harm, state and local budgets.
Find the review, by David Knight, at:
https://nepc.colorado.edu/review/tax-credit
Find Qualified Education Expense Tax Credit: Economic Analysis, written by Greg S. Griffin and Lisa Kieffer, and published by the Georgia Department of Audits and Accounts, at:
https://www.audits.ga.gov/ReportSearch/download/29827
NEPC Reviews (https://nepc.colorado.edu/reviews) provide the public, policymakers, and the press with timely, academically sound reviews of selected publications. NEPC Reviews are made possible in part by support provided by the Great Lakes Center for Education Research and Practice: http://www.greatlakescenter.org
The National Education Policy Center (NEPC), a university research center housed at the University of Colorado Boulder School of Education, sponsors research, produces policy briefs, and publishes expert third-party reviews of think tank reports. NEPC publications are written in accessible language and are intended for a broad audience that includes academic experts, policymakers, the media, and the general public. Our mission is to provide high-quality information in support of democratic deliberation about education policy. We are guided by the belief that the democratic governance of public education is strengthened when policies are based on sound evidence and support a multiracial society that is inclusive, kind, and just. Visit us at: http://nepc.colorado.edu
Media Contact
Michelle RenIe Valladares, National Education Policy Center, (720) 505-1958, [email protected], https://nepc.colorado.edu/
David Knight, University of Washington, (206) 221-3456, [email protected]
SOURCE National Education Policy Center
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