May 21, 2013 Print

Education Options

Today, Rep. Liz Pike introduced House Bill 2063, which establishes a scholarship tax credit that will make it possible for families to consider a wider range of educational options for their children.

Currently in Washington, one in fifteen students is enrolled in a private education program. Most of those selecting private education are wealthy; specialized education is not readily available to the poor. 

Twelve states have addressed this inequity by creating a tax incentive for investments in scholarships for those without the means to afford such schools, and approximately 130,000 children are able to access the school they want as a result. Rep. Pike's proposed bill would implement this strategy in Washington state. 

Independent schools in Washington have capacity for thousands of additional students, yet only one third of those who apply for need-based scholarships receive them. Enabling low-income students to select education outside of the public system would not only give parents and students more options, but it would also free state resources for education and other state spending priorities. Each student transferring to an approved provider saves the state’s usual expenditure of $6,300. A net savings of $20-$60 million is possible in the 2013-2015 budget. Long term savings are measured in hundreds of millions.

What does the bill do?Tax Credit Savings

1. Permits a 100% Business and Occupation tax credit for donations to approved scholarship-granting charities

2. Places a $100 million cap on tax credits. This cap can grow based upon inflation and demand for the credit.

3. Requires that scholarships awarded be:

  • Only available to students at or below 225% of the federal poverty guidelines,
  • Only available to students formerly enrolled in public school for the first two years, with a growing portion permitted from all each year thereafter,
  • $5,000 for basic education and $10,350 for special education,
  • Used at state-approved private school, and
  • Not used to benefit the children of the donor.

What benefits would the bill have for Washington's families? Tax Credit Spending

1. Creates equity 

Wealthy families already have school choice, but low-income families don’t. Wealthy families can afford to live in districts with high-performing schools or send their children to independent schools. Low-income families generally only have one choice: the local assigned government school. Students in low-income districts perform worse on the state assessment than students in higher-income districts. This bill would give students in these low-income districts the same opportunity that wealthy families already enjoy: the option to attend the school best suited for their needs and success. 

2. Improves student performance

Numerous randomized-controlled studies have demonstrated that students in choice programs have higher academic performance. Other improved measures of performance include higher  graduation rates, Increased college enrollment, and increased civic-mindedness

3. Promotes Fiscal responsibility 

The reduction in state expenditures is greater than the reduction in state tax revenue.

4. Accommodates diversity of educational needs

The act empowers low-income families to choose the education that best meets their kids’ individual needs. 

We shouldn’t expect any one school to be able to meet all the diverse needs of all the students living in a given geographic area. This bill is step away from a top-down, one-size-fits-some approach and moves toward an education system that addresses the individual needs of each student.

Some examples of educational needs:

  • Students with disabilities
  • Victims of bullying
  • Those with learning styles better served with differing teaching approaches
  • Focus on arts, music, etc.
  • Differing needs for discipline, play, exploratory learning, etc.
  • Enrichment programs
  • Academic accelleration

5. Enhances school responsiveness

When families have alternatives, the schools must be responsive to their needs or parents can vote with their feet.

6. It's constitutional

Scholarship tax credit programs are on firm constitutional ground. These programs have withstood every single legal challenge to date at both the state and federal levels.



Jami Lund

Senior Policy Analyst

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