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New Report Concludes Private School Tax Credits Undermine Public Schools

canstockphoto26839508In its just-released report “State Tax Subsidies for Private K-12 Education,” the Institute on Taxation and Economic Policy (ITEP) shows that private school tax subsidies, including Arizona’s four tax credits for private school tuition scholarships, are undermining states’ ability to maintain a high-quality public education system.

After studying the 20 states that have some type of private education tax subsidy, ITEP has concluded that the subsidies lack budgetary oversight and divert revenue needed to support public schools. The report also details how upper-income taxpayers can use the subsidies to generate a profit by claiming a deduction on their federal income taxes even when their contributions were fully reimbursed by the state tax credit.

This short video describes why you should care about the damage done from private school tax credits.

In January, CAA identified four reforms that can reduce the damage from Arizona’s private school tax credits:

  • Cap the growth in “low Income” corporate tax credits so they can’t continue to grow by 20% each year
  • Focus all scholarships on students in low income families
  • Remove the ability for donors to recommend specific students for scholarships
  • Limit administrative expenses to 5%

Learn more about these and other issues by reading ITEP’s full report. 

2 Responses to “New Report Concludes Private School Tax Credits Undermine Public Schools”

  1. Diane Liotta says:

    Don’t blame tuition tax credits for the poor state of public schools. With 3 children in private school, I am saving the state approximately 21,000.00 per year. I get 2,000.00 back on my taxes. Do the math. Public schools are in dire straights because of lack of state funding. Make public schools better and stick to a plan. Stop introducing new curriculum every tart and stop teaching to the tests.

  2. Lori Bolen says:

    While I am all for appropriate oversight,I don’t advocate “throwing the baby out with the bath water.” I have supported tax credits for private school tuition for many years because I have found the public schools to often be lacking in providing adequate services,especially for gifted or challenged students.

    Limiting scholarships to only low income families once again places middle income families in the no-man’s land of not enough resources to pay themselves and no assistance, even though these are the exact families that have provided the majority of the tax funds being distributed!

    Thank you for the opportunity to comment.

    Lori Bolen

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