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Scholarship program offers the right kind of tax credit

Isn’t it an interesting phenomenon how leftwing political degenerates care little about spending until the proposed program offers a piece that doesn’t fit their philosophical puzzle?

Take the huffing and puffing by opponents of encouraging individuals and businesses to donate to a modest program that would turn those dollars into scholarships for Kentucky parents who want to provide their children with a private education but are unable to afford tuition payments without assistance. 

Suddenly, these antagonists are concerned about the program’s cost, which would be a modest $25 million as contributors would receive a credit against their state tax liability.

Leftist political advocacy groups like the misleadingly named Kentucky Center for Economic Policy, which incessantly lobbies for swelling the size and scope of government – and for the accompanying tax hikes required to fund its bloated proposals – are sending up smoke signals about how school-choice programs will decimate public education funding. The group blathered in a blog post during last year’s legislative debate over scholarship tax credits about how only kids already in private schools would be the primary beneficiaries and, as a result, “we’ll have substantially less, rather than more, revenue available for our public schools.”

Nowhere, no how and in no way does the group ever offer even the smallest dose of honest analysis by acknowledging that the proverbial education sky hasn’t fallen in the 18 states already offering 23 such scholarship tax credit programs.

Well-known researcher Dr. Martin Lueken with the Thomas B. Fordham Institute and EdChoice analyzed 10 of those tax credit programs in seven of the states representing 90% of all such scholarships in the nation and found they produce huge long-term savings for schools and education systems.

Lueken reports that states after a couple of years of revenue loss see millions – even hundreds of millions – worth of long-term savings since the cost of educating children in private schools tends to be lower than what public schools spend.

When a child leaves a public school to enroll in private or parochial school, Lueken concludes it saves the public school he left a significant amount of funding. Not only does the school the student leaves no longer have the cost of educating him, but it continues receiving the property tax dollars his parents must still fork over even though they’re not utilizing the public education system.

A mother of three in Louisville explained she can send her young children to a private Catholic elementary school for a total of $14,000. At the same time, the Jefferson County Public Schools spent in excess of $2,000 more per individual student than it costs her to educate all three of her children at a private parochial school.

A donor who contributes, say, $14,000 to the proposed scholarship program receives a 95% tax credit, meaning the state “loses” $13,300.But does it really lose?

Schools no longer have to cough up the $48,132 cost of educating all three of her children, plus this mother must continue to pay property taxes to the schools even though her children don’t utilize those dollars.

Bring up scholarship tax credits around legislators in Frankfort and you’re likely to hear some murmuring about how there must be money in the budget to fund the program before they’ll support it. Yet why didn’t we have a similar line-in-the-sand type of commitment before politicians allowed the approval of $421 million worth of taxpayer-backed goodies for film producers two years ago -- spending that even the economically disjointed Kentucky Center for Economic Policy couldn’t support?

It’s disheartening to watch politicians support handing out millions in corporate pork to already-fattened Hollywood moguls while the neediest parents in Kentucky starve for crumbs of educational freedom and the school choice it provides.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Reach him at and @bipps on Twitter.

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