Released: 8/6/2009
Author(s): Greg Forster, Ph.D., Christian D´Andrea, M.P.P.
This study examines the Florida Tax Credit Scholarship program, one of the nation’s largest school choice programs. It is the first ever completed empirical evaluation of a tax-credit scholarship program, a type of program that creates school choice through the tax code. Earlier reports, including a recent one on the Florida program, have not drawn comparisons between the educational results of public schools and tax-credit scholarships; this study is therefore the fi rst step in evaluating the performance of this type of school choice.
The Florida program provides a tax credit on corporate income taxes for donations to scholarship-funding organizations, which use the funding to provide K-12 private school scholarships to low-income students. Over 23,000 Florida students are attending private schools this year using these scholarships. Similar programs exist in Arizona, Georgia, Iowa, Indiana, Pennsylvania and Rhode Island.
Studying a tax-credit scholarship program using traditional empirical techniques presents a number of methodological challenges. To overcome these difficulties, the study used a telephone survey conducted by Marketing Informatics to interview 808 participating parents whose children attended public schools before entering the program. It asked them to compare the educational services they received in public and private schools.
The results provide the fi rst ever direct comparison between the education participants received when they were in Florida public schools and the education they receive in the school choice program.
Programs
Enacted 2001 • Launched 2001–02
Florida provides a tax credit on corporate income taxes as well as insurance premium taxes for donations to Scholarship Funding Organizations (SFOs), privately run non-profit organizations that distribute private school scholarships. SFOs provide scholarships worth up to $4,106 for low-income students. They also may provide students with funds for transportation to another public school. Businesses get a dollar-for-dollar tax credit for contributions to scholarship organizations. The overall size of the program is capped at $140 million for 2010–11 (that amount will rise by 25 percent in future years if the total credits claimed in a given year amount to 90 percent of the current cap).
In 2011, new legislation amended the original Florida Tax Credit Scholarship law in two ways: (1) Eliminated the tax liability cap (formerly set at 75 percent) on the total tax due that qualifies for a credit; (2) Allowed the carry forward of an unused amount of a tax credit to the next fiscal year, and eliminated the rescindment of all or part of an unused tax credit.
