Idaho legislators will consider a tax credit this session that would expand the state’s education choice options for families. House Bill 447 was introduced today.
The proposal, introduced by Rep. Wendy Horman, Rep. Jason Monks, Sen. Lori Den Hartog, Sen. Scott Grow and Sen. Doug Ricks, would provide a $5,000 refundable tax credit that families could use for education expenses and to cover the cost of tuition at a non-public school. An extra $2,500 would be available for families who have students with special needs.
Tax credits or tax credit scholarships are not unusual in the education choice arena. In fact, ten other states offer similar programs.
Wild claims are being made about what the program would and would not do. Here’s what’s true and false.
Claim: “This is a voucher scheme.”
By the very definition, tax credits are not vouchers. Education Savings Accounts are not vouchers. In fact, no one in Idaho has proposed a school voucher.
Tax credits are the simplest form of education choice. Essentially, it’s no different than a tax deduction for your mortgage interest or even a child tax credit.
In the end, tax credits are given to parents directly and vouchers are given to schools or a specific institution.
Claim: “This defunds neighborhood schools.”
The tax credit being proposed in the latest bill takes $0 out of the state's public school budget. It is a completely separate line item of $50 million. The public school budget will remain at $2.698 billion.
Comparatively speaking, the tax credit equals less than one half of one percent of the state's K-12 allocation.
Claim: “This program will grow.”
While the bill caps the spending to no more than $50 million, any tax credit can be decreased or increased by a legislature.
Experience from some other states indicates that parents support and like having more choice options, and the better designed the program, the more students who will participate. But an increasing number of participants equals success, not failure.
Claim: "Most public school students won't sign up."
For the vast majority of those who like their public schools, nothing would change. In fact, it is likely that fewer than 5-10% of Idaho children would take advantage of the tax credits. But for those who do, for those who need options other than the traditional public school setting, it could be a game changer.
Claim: “There’s no accountability.”
The program would be overseen by the State Tax Commission, and would contain the same type of accountability as anyone in the state would face to be truthful on their taxes including possible audits for misuse of funds. The proposed law gives the tax commission the authority to conduct audits of grant recipients to ensure compliance. The tax commission would also have the power to recover funds not used in accordance with the law.
Claim: "There are already great education choice options in Idaho."
Idaho has a robust public charter school system and open enrollment for traditional public schools. The state also launched the Empowering Parents program. While these are important education choice options, other states are providing additional resources for families. Idaho recently ranked 29th on education choice options behind Utah & Montana and barely ahead of Illinois.
Claim: “This will only help the wealthy.”
Wealthy parents currently have the privilege of making two types of educational choices. They can either opt to reside in areas with reputable public schools or they can afford to enroll their children in private schools by paying the necessary fees. Consequently, educational choice initiatives are typically tailored to cater to the requirements of disadvantaged students and those from low-income backgrounds.
By erecting barriers that prevent low-income families from accessing the highest quality education, we are essentially impeding the advancement of disadvantaged children, which is both unfair and unnecessary.
In Indiana, the Choice Scholarship program's average income for participating families last year was $81,817.
The average Arizona family taking advantage of the state's Empowerment Scholarship Account is $60,600.
Claim: “These programs haven’t helped students in other states.”
As of March 2023, there have been nearly 190 empirical studies on the impact of education choice. Researchers have looked at fiscal effects, parent satisfaction, test scores, attainment, civic values, school safety and racial integration.
Remarkably, 84% of studies show a positive effect, 10% show no impact, and 6% show a negative result.
Studies were completed in red states and blue states, in those rural and urban. We have more information on the impact of education choice than ever before.
Claim: "Arizona's program is bankrupting the state."
Arizona's program is an Education Savings Account, not a tax credit. The most recent, official estimates from the nonpartisan Arizona Joint Legislative Budget Committee (released January 16, 2024) project total ESA award values of $703 million, not the $950 million claimed by activists. The $703 million includes roughly $250 million specifically allocated to special needs students. Because of the popularity of the program, public schools have seen offsetting savings of $200 million.
The Idaho tax credit proposal is capped at $50 million.
Claim: "Rural communities will be hurt."
It cannot be said that education choice will not help in rural areas because there are few or no alternatives, and then, at the same time, that education choice will destroy the district school system because so many students will leave for alternative options.