NCPA - National Center for Policy Analysis

Take A Look At The "Universal Education Credit"

December 13, 2000

The school choice movement is already too far along -- and too popular -- to be sand-bagged by the recent defeat of voucher initiatives in California and Michigan, observers say. But then vouchers aren't the only vehicle to achieve school choice.

Consider the virtues of universal education credits, an expanded version of a program already operational in Arizona.

  • Under this system, any taxpayer -- including parents, individual taxpayers and businesses -- who pays tuition for any student to attend a public, private or parochial school would receive a dollar-for-dollar reduction in his state tax liability.
  • The credit would be worth up to one-half of what public schools spend per student -- roughly $3,500 per child -- and taxpayers may take the credit for multiple students provided the combination of credits does not exceed their tax liability.
  • Because any taxpayer may direct his tax dollars toward scholarships, scholarship pools will be large enough to accommodate the country's poorest families who could not take advantage of the credit directly.

In Arizona last year, more than 30,000 individual taxpayers used the state's education tax credit to direct $14 million toward scholarships.

A "universal" education credit would differ from Arizona's plan in several respects. That state's credit is limited to $500 and may not be used by parents for their own children or by businesses. A universal education credit, worth substantially more and available to all, would raise even more.

Because education credits involve private funds, they have cleared the church-state hurdle without incident. State courts have upheld the constitutionality of education tax credits in Arizona, Illinois and Iowa -- and the U.S. Supreme Court has ruled that education tax deductions do not violate the Establishment Clause.

Source: Darcy Olsen (Cato Institute) and Matthew Brouillette (Mackinac Center), "Another Path to School Choice, Washington Times, December 13, 2000.


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