The Friedman Foundation for Educational Choice

Advancing Milton and Rose D. Friedman's Vision of School Choice for All Children

Grading School Choice: Evaluating School Choice Programs by the Friedman Gold Standard

Released: 2/5/2008

Author(s): Robert C. Enlow

Over fifty years ago, Milton and Rose Friedman proposed the idea that has become known as school choice. The Friedman Foundation was founded in 1996 with the goal of championing that idea. Since then, numerous school choice programs have been enacted, each representing a different realization of the Friedmans' vision, and each deviating in some ways from the gold standard they laid down for school choice. Grading School Choice evaluates all 21 existing school choice programs against the Friedman gold standard of choice for all, not just for some.

Programs

Autism Scholarship Program

Enacted 2003 • Launched 2004

Ohio students on the autism spectrum may receive vouchers for education services from a private provider, including tuition at a private school. After participating students receive education services, they apply to the state for reimbursement of expenses.

Carson Smith Special Needs Scholarship Program

Enacted 2005 • Launched 2005

Most Utah students who have disabilities are eligible to receive vouchers to attend private school. However, participation is limited by the amount of money appropriated to the $3.75 million program fund.

Cleveland Scholarship & Tutoring Program

Enacted 1995 • Launched 1996

Parents in the Cleveland Metropolitan School District can receive vouchers to send their children to private school or public schools bordering the school district. No more than half of new recipients may be students previously enrolled in private schools.

Education Deduction

Enacted 1955 • Launched 1955

Minnesota provides a tax deduction covering educational expenses for students in any private or public school, including homeschooling. The tax deduction lowers a family’s taxable income and covers books, tutors, academic after-school programs, and other educational expenses, including tuition payments at private schools.

Educational Choice Scholarship Program

Enacted 2005 • Launched 2006

Ohio students attending chronically low-performing public schools are eligible for “EdChoice” vouchers to attend private schools. The cap on available vouchers is 60,000.

Educational Improvement Tax Credit

Enacted 2001 • Launched 2001

Pennsylvania provides tax credits for corporate contributions to Scholarship Organizations (SOs), nonprofits that provide private school scholarships, or Educational Improvement Organizations, nonprofits that support innovative programs in public schools. Tax credits are worth 75 percent of the contribution; however, a 90 percent credit can be claimed if the corporation commits to two consecutive annual contributions. In either case, the maximum tax credit is $750,000 per company. Credits are awarded to companies on a first-come, first-served basis until the cap is reached. The total amount of tax credits is limited to $100 million.

Florida Tax Credit Scholarship Program

Enacted 2001 • Launched 2001

Florida provides a tax credit on corporate income taxes and insurance premium taxes for donations to Scholarship Funding Organizations (SFOs), nonprofits that provide scholarships for low-income students and children in foster care and offer funds for transportation to public schools outside a child’s district. Businesses get a dollar-for-dollar tax credit for SFO contributions, with total credits capped at $286.25 million. Unused credits can be carried forward to the next fiscal year.

Georgia Special Needs Scholarship Program

Enacted 2007 • Launched 2007

The Georgia Special Needs Scholarship Program allows any student with a disability whose parents are unhappy with their assigned public school to receive a voucher to attend private school.

John M. McKay Scholarships for Students with Disabilities Program

Enacted as a Pilot Program 1999 • Expanded 2000

Florida’s John M. McKay Scholarships for Students with Disabilities Program allows public school students with disabilities or 504 plans to receive vouchers to attend private schools or other public schools.

Low-Income Corporate Income Tax Credit Scholarship Program

Enacted 2006 • Launched 2006

Arizona provides a credit on corporate income taxes for C-Corporations for donations to School Tuition Organizations (STOs), nonprofits that provide private school scholarships. STOs receiving donations for this program must award scholarships to low-income students. Corporate taxpayers contributing to STOs may claim a tax credit equal to the full amount of their contribution. The program is limited to a total of $35.8 million in available tax credits per year, a figure that is allowed to rise 20 percent annually.

Milwaukee Parental Choice Program

Enacted 1990 • Launched 1990

Milwaukee families earning up to 300 percent of the federal poverty guidelines qualify to receive vouchers. Once a student receives a voucher, that student is able to keep it, regardless of his or her family’s future income. Voucher students are allowed to attend any participating private school in the state.

Opportunity Scholarship Program

Enacted 2004 • Launched 2004

The District of Columbia’s Opportunity Scholarship Program provides vouchers to low-income students. Overseen by the U.S. Department of Education, the program is funded separately from D.C. public and charter schools. It is authorized through 2016, with $20 million in total available funding.

Original Individual Income Tax Credit Scholarship Program

Enacted 1997 • Launched 1997

Arizona provides a credit on individual income taxes for donations to School Tuition Organizations (STOs), nonprofits that provide private school scholarships. In the 2014 tax year, individual taxpayers contributing to STOs may claim a dollar-for-dollar credit of up to $528, and married couples filing jointly may claim up to $1,056. The amount an individual can claim for a credit increases each year by the amount the Consumer Price Index changes.

School Tuition Organization Tax Credit

Enacted 2006 • Launched 2006

Iowa provides a credit on individual income taxes for donations to School Tuition Organizations (STOs), nonprofits that provide private school scholarships. The credit is worth 65 percent of the donation’s value, which also is limited by a statewide cap. A maximum of $12 million in tax credits is available. Each STO is able to grant tax credits to its donors up to its share of the statewide limit, with each STO’s share determined by the enrollment at the schools it serves. Corporate donations are able to constitute up to 25 percent of the $12 million cap.

Tax Credits for Contributions to Scholarship Organizations

Enacted 2006 • Launched 2007

Rhode Island provides a credit on corporate income taxes for donations to Scholarship Granting Organizations (SGOs), nonprofits that provide private school scholarships. Tax credits are worth 75 percent of the contribution, or 90 percent if donated for two consecutive years and the second year’s donation is worth at least 80 percent of the first year’s donation. The total amount of tax credits is capped at $1.5 million. Each corporate donor can receive only $100,000 in tax credits each year, and cannot use surplus donations in one year to generate tax credits in future years.

Tax Credits for Educational Expenses

Enacted 1999 • Launched 2000

Illinois allows individuals to claim a credit for educational expenses for dependent students attending a private or public school or being homeschooled. Qualified expenses include tuition, books, and lab or activity fees. The credit is worth a maximum of $500.

Town Tuitioning Program

Launched 1873

Many small towns in Maine do not operate high schools, and some do not have elementary schools. Students in those towns are eligible for vouchers to attend public schools in other towns or non-religious private schools, even outside the state. The “sending” towns pay tuition directly to the “receiving” schools. Although most towns allow parents to choose which schools will receive their students, some towns send all their students to one school.

Town Tuitioning Program

Launched 1869

Many towns in Vermont, particularly in rural areas, do not operate public high schools and/or elementary schools. Students in those towns may use public dollars to attend any public or approved independent (private), non-religious school in or outside of Vermont. The “tuitioning” towns pay tuition directly to the “receiving” schools. For 2013-14, tuition amounts equal $11,703 for grades K-6 and $13,084 for grades 7-12. Although most tuitioning towns allow parents to choose which schools will receive their students, some towns send all their students to one school.

Tuition and Textbook Tax Credit

Enacted 1987 • Launched 1987

Iowa provides parents of students in any private or public school a tax credit covering educational expenses, including tuition, books, and lab or activity fees. The credit is worth a maximum of $250.

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