A Scholarship Tax Credit Program for Colorado

IP-2-2013 (February 2013)
Author: Ben DeGrow

PDF of full Issue Paper
Scribd version of full Issue Paper

Executive Summary
Scholarship tax credits increase the opportunity for K-12 students to access non-public educational options. Such a tax code modification increases the incentive for persons and businesses to contribute funds to qualified non-profit scholarship granting organizations. In turn, the organizations use most of the incoming funds to assist low- and middle-income families with private school tuition expenses.

Currently, 11 states operate a total of 14 different scholarship tax credit programs. No two programs are alike, with different criteria for student eligibility, scholarship sizes, limits on the size or value of tax credits, and requirements for scholarship organizations. Though research has been limited, strong evidence exists that such programs yield academic and competitive benefits, generate a positive fiscal impact on the state, and improve parental satisfaction. No scholarship tax credit program has been overturned by a state or federal court.

Colorado has a great need to adopt a scholarship tax credit program. Important measures of achievement and attainment, especially among disadvantaged groups, continue to lag below expectations. Even the highest-performing schools do not serve every student well. Parents should be empowered to choose different educational settings that serve their children’s needs.

By harnessing the power of voluntary contributions, a scholarship tax credit program could open the doors of learning opportunity for thousands of Colorado students with no negative fiscal impact on the State. A model program would provide dollar-for-dollar tax credits to persons and businesses that contribute to qualified non-profit organizations that provide scholarships for K-12 non-public school tuition, as follows:

  • All children from families with incomes at or below 300 percent of federal poverty level should be eligible for a scholarship
  • To promote cost savings, scholarship eligibility during the program’s first three years also should be limited to students previously enrolled in public school, incoming kindergarteners, and students already receiving a privately-funded scholarship
  • The maximum scholarship amount should be set at 50 percent of state average Per Pupil Revenue for K-8 students and 60 percent of PPR for high school students
  • The program should operate without a total annual program cap
  • The program should limit credits for individual contributions to 50 percent of the taxpayer’s liability
  • Participating non-profit organizations must abide by basic financial accountability standards and must disburse at least 90 percent of their funds as scholarships, though the General Assembly also could consider a relaxed standard for startup organizations

Colorado policymakers should give careful consideration to providing many of the state’s families an important benefit through the adoption of scholarship tax credits.

Posted by on Feb 27th, 2013 and filed under Issue Papers, School Choice, Vouchers & Tax Credits. You can follow any responses to this entry through the RSS 2.0. You can leave a response by filling following comment form or trackback to this entry from your site

23 Responses for “A Scholarship Tax Credit Program for Colorado”

  1. [...] time also is quickly approaching for a scholarship tax credit program in Colorado. You will be seeing more about it soon, I promise. No need to blindside anybody with that news. [...]

  2. [...] football. Let’s not fall behind in educational opportunity as well. Let’s look at our own scholarship tax credit program, and help Colorado kids win, [...]

  3. [...] Recognize parental authority to direct their children’s education, promote great ideas like scholarship tax credits, and empower the people. Meanwhile, I’ll try to sort out everything [...]

  4. [...] The report recommends a host of ideas for positive changes in urban high schools. Many of them are worthy options. But I’d also like to request a new state-level policy that would help give greater hope for success to a number of students trapped in tough school environments. I’m talking about a scholarship tax credit program for Colorado. [...]

  5. [...] Making me smile even bigger, this defensive victory offers even brighter hopes to the possibility of having a scholarship tax credit program for Colorado. [...]

  6. [...] Bedrick’s post and my Education Policy Center friends’ paper A Scholarship Tax Credit Program for Colorado point to the recent Harvard survey that found 72 percent of voters support the idea. So the [...]

  7. [...] is a fine approach, and I certainly wish Wisconsin well, Colorado would do even better to pursue a scholarship tax credit program. This proposal, something that even more states have adopted, provides a benefit not directly to [...]

  8. [...] more about Arizona’s Corporate STO Credit and how a similar program could work for Colorado, check out my Education Policy Center friend’s recent paper and the fabulous website Colorado Kids [...]

  9. [...] the jurisprudence of this type of private school choice. So no reason to give pause about pursuing a scholarship tax credit program for Colorado, which would help Colorado kids win. Given the peculiarity and the logical implications of [...]

  10. [...] opponents can brush up on what scholarship tax credits really are all about by reading the paper A Scholarship Tax Credit Program for Colorado, or by visiting the wonderful Colorado Kids Win website. But maybe a good place to start is [...]

  11. [...] tax credit program is one of many featured in my Education Policy Center friends’ paper A Scholarship Tax Credit Program for Colorado. Check out Colorado Kids Win to learn how you can get involved in making this option available to [...]

  12. [...] there are better policy options for enhanced fairness and opportunity. Maybe something like a statewide scholarship tax credit program that gives Colorado kids hope and even saves [...]

  13. [...] education policy analyst Ben DeGrow proposed specific parameters for a Colorado scholarship tax credit program in a 2013 issue paper. Center director Pam Benigno and Hispanic education coordinator Raaki [...]

  14. [...] aren’t too much different than the ones my Education Policy Center friends recommend in A Scholarship Tax Credit Program for Colorado. You know, the type of program that could help thousands of Colorado Kids [...]

  15. [...] and be proficient if we create policies that are centered on them, proven and transformational. Scholarship programs, charters, blended learning or whatever parents and educators choose — innovations in how [...]

  16. [...] down doors, opening up new possibilities, still wishing that Colorado Kids Win with a scholarship tax credit program of their very own. All the more reason to enjoy soaking up that sun as long as I [...]

  17. [...] and the reliability of the media to report education issues fairly. Helping Colorado Kids Win with a scholarship tax credit program sure would boost us, [...]

  18. [...] doubt a different trend than the widespread support for scholarship tax credits, as other national surveys have [...]

  19. [...] In fact, given that the earnings of so many taxpayers have been taken to fund “public education,” they have every right to demand that artificial barriers between “public” and “private” school be broken down and that students and parents direct the funds to secure the best learning they can choose. One easy way to help would be creating a scholarship tax credit program for Colorado. [...]

  20. [...] hurt most? The neediest students, of course. (The kind of students who would most benefit from a scholarship tax credit program for Colorado.) Either by preventing access to an existing choice program or by scaring other jurisdictions away [...]

  21. [...] high, Colorado! When it comes to Parent Power, we can certainly do better!! Why not start with a scholarship tax credit program like so many other states [...]

  22. [...] my Education Policy Center friends came out with the paper A Scholarship Tax Credit Program for Colorado just over a year ago, three new states have joined the ranks: Alabama, South Carolina, and now [...]

  23. [...] He has a good point to make, but there is definitely more to consider. Though the evidence is hardly overwhelming, I tend to see an advantage to expanding choice for students through scholarship tax credits. Which makes it a good thing my Education Policy Center friends have put their heart and soul into the Colorado Kids Win proposal. Check out the site, and the videos. And if you really want to get your geek on, read the paper, too. [...]

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