The system for funding private education through school choice programs is at a crossroads, thanks in part to a U.S. Supreme Court decision that allows government funding for all private schools. States have an opportunity to move away from traditional tuition tax credits to a more equitable system of direct aid for private education, including religious institutions.
Historically, tuition tax credits have been the primary means by which states support private education (if they wish) and have cleverly avoided the constitutional dilemmas associated with direct funding of religious schools. . This model allowed taxpayers to convert state income taxes into donations to scholarship organizations, indirectly channeling public funds to private organizations. The tuition tax credit allows you to deduct the amount you donate from the taxes you have to pay.
But the system has been found to disproportionately favor the wealthy and sideline schools that serve less affluent communities.
Supreme Court decisions, particularly in cases where: Carson vs Makin, made it clear that direct aid to religious schools does not violate the Establishment Clause if administered fairly. This major change dismantles the major legal barriers that once made the tuition tax credit attractive and shines a spotlight on the tuition tax credit's inefficiencies and perpetuating inequalities.
The tuition tax credit lacks the necessary oversight to prevent fraud and abuse, and its structure inherently benefits high-income families, leaving economically disadvantaged families unable to receive assistance. It remains unresolved. These units also promote educational segregation. This allows private schools to focus on collecting donations from wealthy families and directs funds away from families who need them most.
The way forward is clear: direct funding. By adopting tuition vouchers or similar strategies, states can allocate public funds more equitably and ensure that all students, regardless of finances, have access to high-quality private education.
Direct aid also provides flexibility to prioritize support for students from low-income families and those attending low-performing public schools, more closely aligning with educational equity and choice goals. By removing the financial and administrative obstacles that limit the scope of school choice programs, direct aid opens the door to private education for all students.
Some may argue that moving to direct aid creates legal and political hurdles, especially in states that have historically prioritized tax credits. However, his two cases in the Supreme Court (Carson vs Makin and Kennedy v. Bremerton School District) and the obvious shortcomings of the tax credit system provide a compelling argument for change. Lawmakers must act to ensure school choice delivers on its promise to provide an equitable, high-quality education for all students.
As constitutional perspectives shift in favor of direct funding for all types of schools, public, private, and parochial, the case for direct aid as the preferred method of supporting private education grows stronger.
By focusing on direct aid, states can ensure that school choice programs are fair, effective, and aligned with the overarching goal of improving educational outcomes for all students.
The case is Carson v. Makin, United States, 142 S. Ct. 1987, Decision 6/21/22.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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Michael Bloyd is a professor of law at Emory University.
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