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June 28 2012

A Tale of Two Tax-Credit Scholarship Programs

Vicki E. Alger

New Hampshire and Virginia each passed tax-credit scholarship programs this week—bringing the total number of programs passed this year in the states to seven. As the Heartland Institute reports:

Virginia and New Hampshire passed into law Wednesday statewide school choice programs funded by businesses' tax-deductible contributions to nonprofits that in turn pay students' private school tuition.

Both houses of the New Hampshire legislature overrode Gov. John Lynch's veto of the bill to pass it into law by a 69 percent supermajority. Gov. Bob McDonnell signed Virginia's House Bill 321/Senate Bill 131. …

The laws are the sixth and seventh statewide private school choice programs signed into law in the past year. Nine other states offer tax-credit scholarships. Scholarships in both states will be available to families at up to 300 percent of the federal poverty line, or earnings up to $69,150 per year for a family of four.

New Hampshire’s School Choice Scholarship Act is especially notable according to the Cato Institute’s Adam Schaeffer:

The law is path-breaking, supporting for the first time in the nation a family’s choice to home school their child. The law protects independence and innovation in private education, imposing no new restrictions on private or home schools, because the lawmakers understand that direct accountability to parents and taxpayers is the most effective kind of accountability. The program allows up to 30 percent of the credit funds in the first year (more in subsequent years) to support children who are already in private school, but need assistance in order to remain there. And after the first two years, the program can expand by 25 percent each year. … Legislators in other states should take note of what can be accomplished when lawmakers take principles and policy seriously.

Schaeffer is critical of Virginia’s Opportunity Scholarship Tax Credit program, noting three leading (but not only) flaws make it “anemic and ineffective”:

1) A 65 percent tax credit is woefully inadequate;

2) The eligibility requirements are far too restrictive; and

3) The state superintendent is given arbitrary authority over the program.

Tax-credit scholarships are increasingly popular. They’re constitutional. They’re cost effective. And they expand options for students trapped in schools that aren’t working for them—if crafted properly and courageously.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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