A letter to the editor on July 13 (“Tax credit accomplishes much good,” The Daily Progress) touted the benefits of Virginia's Education Improvement Scholarship Tax Credit program without mentioning any of its drawbacks.
Tuition tax credits generally benefit the wealthy. In Virginia, individuals or corporations receive a tax credit for 65% of the money donated to a foundation. There is a $25 million cap on total donations. Foundations must use 90% of the tax credits for scholarships, presumably leaving the remainder to be spent on overhead.
Some problems with EISTCs:
» Money allotted for each scholarship cannot exceed the per pupil amount given by the state for Standards of Quality. For example, Albemarle’s per-pupil allotment in 2019-20 is $3,400. According to the Private School Review website, the "average private school tuition in Virginia is approximately $13,911 per year. ..." Only families that can afford to pay the difference can afford to use the scholarships for a private school education. Few low-income families have made use of EISTCs.
» When a child attends private school on one of these scholarships, the money travels from public school to private school. A few students leaving the public school won't change its overall expenses, so the public school is losing funds but getting nothing in return. One or two students leaving a class doesn't result in the school having one less teacher or principal to pay.
Some financial advisors tout tax credit programs as a way to make money. In some states where 100% tax credits are offered, the tax credit program is used to generate tax cuts larger than the amount donated. The writer admits that probably "most of the tax credits go to households with $500,000 or more in adjusted gross income." How does he justify getting richer at the expense of public schools?
Tax credits might accomplish much good for the well-to-do, but they hurt those who must rely on public education by directly diverting funds from public schools to private institutions.
http://www.doe.virginia.gov/school_finance/scholarships_tax_credits/index.shtml (SOQ Amounts for K-12 Scholarships Awarded for Program Year 2019-2020)