Tax Credit Scholarships Save Kids from Inequality

July 23, 2020
By Matt Beienburg

Should we punish needy students at private schools…because public schools promote inequality? 

The logic may not exactly add up, but it seems to be the recommendation of a somewhat bizarre op-ed published recently at the Arizona Daily Star opposing Arizona’s tax credit scholarship (STO) program. Local political science instructor Darian Qureshi writes that the program, which encourages families to make charitable contributions to support student scholarships at private schools, “does more harm than good for the state.”

Yet nearly all of the author’s examples indict public, not private, schools for their inequality.

He writes, for instance: “One of the consequences of Arizona’s tax credit is that it has exacerbated the effects of educational inequality. Because schools are funded in large part by local property taxes, higher property taxes in wealthier parts of town mean that their schools are better funded than those in poorer areas.” But the only schools that receive local property tax funding are public schools, so this inequality is a wholly public school phenomenon. Private schools aren’t “exacerbating” this problem—they’re offering an alternative to it.

Again, he insists, “[t]he tax credit exacerbates this inequality” because “[w]ealthier families have more money to donate than poorer families, so they can maximize their tax credits to schools in their area,” citing as a prime example the fact that among “schools that received tax credit contributions in 2012, the school that received the most funds was Tucson’s Catalina Foothills High School. It raised nearly $1 million, spending most of it on athletics and its band program.”

But Catalina Foothills is a public school and received those donations through a completely separate tax credit program open only to public schools and specifically designedto support extracurriculars.

Arizona’s tax credit programs for private schools, on the other hand, are explicitly designed to support student scholarships, period. So when a taxpayer donates in this way, she’s not funding sports or band programs like at a well-to-do public school. She’s directly funding scholarships for students in need.

So what does that actually look like? Well, consider the Brophy Community Foundation, one of Arizona’s largest tax credit scholarship granting organizations, which—as affirmed by the recent Supreme Court decision in Espinoza v. Montana Department of Revenue—supports private Catholic schools around the state: More than two-thirds of its tax credit scholarship recipients qualified as low-income, and nearly 80% were Hispanic, black, or Native American, while just 14% were white. 

But such students apparently don’t figure into Qureshi’s calculations when he says the program is also “unjust because parents who can send their children to private schools usually have enough money that they can make that choice without depriving the state of the tax funds.”

Indeed, Maria Salazar-Calderón, an immigrant mother whose daughter graduated from St. Mary’s High School with a tax credit scholarship—and then went on to college and serve in the U.S. military—might see things slightly differently.

Qureshi and others likewise complain about “high” costs of tax credit scholarship programs, while shrugging off the fact they help educate students at lower costs than public schools. Tuition at K-8 Catholic schools comes in around $6,000 in Tucson, for example, compared to roughly $11,000 in taxpayer spending per student in Arizona’s public school system. So for every needy kid Qureshi succeeds in dissuading donors and stripping away funding for—sending them back to public school—taxpayers are left spending thousands more.

So, Qureshi may be right: “Just because the Supreme Court has said our education tax credit program is legal does not mean we should use it.” But the fact it serves children, saves money, and reduces inequality certainly suggests we should.

Matt Beienburg is the Director of Education Policy at the Goldwater Institute.