Tax Credit Scholarships a Win-Win for Nebraska

by Deb Portz

If we look at 2015 ACT Comprehensive (Math, Science and Reading) and College-readiness scores comparing the nation and the state of Nebraska to Lincoln and Lancaster County (as reported on school and district websites as well as the ACT website), we find the following:

National Average – 21.0. ACT College-readiness – 28%. 57% participation of U.S. graduating students.
Nebraska Average – 21.5. ACT College-readiness – 29%. 86% participation of Nebraska graduating students.
Lincoln Public Schools Average – 20.7. ACT College-readiness - 22%. 100% participation of LPS graduating students (opt-outs from district-wide ACT administration are not reported). LPS's highest performing high school average is Lincoln East at 23.3. LPS's lowest performing high school average is Lincoln High at 18.5.
Norris Public Schools Average – 24.2 ACT College-readiness score 44%. 94% participation of graduating students. 
Lincoln St. Pius X High School Average – 24.3. ACT College-readiness score 45%. 93% participation of graduating students.

What if we gave those who feel they have no choice over their educational outcomes the choices they deserve?

Opportunity scholarship programs allow individuals and corporations to allocate a portion of their owed state taxes to private nonprofit scholarship-granting organizations that issue scholarships to K-12 students. The scholarship allows a student to choose among a list of private schools, and sometimes public schools outside of the district, approved by the scholarship organization. The scholarship is used to pay tuition, fees, and other related expenses. As a result, the state does not have to appropriate per-pupil education funding for those students that receive scholarships.

An educational tax credit is different than a school voucher in that a tax credit does not take any money away from public schools for each pupil they educate, raise any taxes, or require any additional state spending. Unlike a voucher, which takes tax dollars and state spending away from a public school, educational tax credits are incentives for non-profits, businesses and individuals to contribute to an educational scholarship fund which in turn allows them to have a higher tax deduction percentage than a regular contribution would give them.   

Tax credits allow for a fully-funded broad-based student outreach for school choice without using taxpayer dollars.  For the users of these educational scholarships, income parameters are means-tested for those who would qualify to attend a school choice alternative.  Fifteen states have educational tax credits in place already.  Educational tax credits give parents the choice to improve the educational outcomes they decide on for their children. 

Tax credits improve accountability in education to parents and taxpayers by holding poor performing public schools accountable for academic performance because they lose students in the choice options. It can also be seen as a positive to alleviate the issues highlighted by public schools that they are burdened with attendance growth as a deterrent to high performance in educational outcomes since students in overcrowded public schools have the option to choose to attend another school.  It is a very clear savings for the state on a per pupil allocation because more money is coming in for education from donations.  It gives the state broader eligibility for the allocation that they have to distribute from the state and taxpayer pool of dollars.