State education tax credits could lower the cost of running public schools, improve student performance, and give more parents a choice in deciding the type of education their children should receive. That’s the assessment of a report the N.C. Education Alliance released earlier this year. Alliance President Lindalyn Kakadelis discussed the findings with Mitch Kokai for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Kokai: First of all, Lindalyn, let’s describe how an education tax credit would work. I understand there are a couple of different kinds.
Kakadelis: Right. There are two main kinds that already exist in our country. The first one is a family tax credit, an individual tax credit program, which is, basically, just a line item on your state taxes that you would deduct what you spend on private education. Another one is a corporate or a philanthropy tax credit, which companies, businesses, or individuals could give to a scholarship-granting organization that in turn gives to lower-income families so that they, too, can have school choice or options in education.
Kokai: I understand that is one of the key reasons people like the idea of an education tax credit – is [that] it gives choices to more parents, not just the ones who right now have the opportunity to send their kids to private school, while also paying the bill for the public school.
Kakadelis: That’s exactly right, Mitch. School choice or educational options exist for parents who can pay twice – once through their taxes and then again to pay tuition at the school. So school choice exists for financially able families. It does not exist for middle- or low-income families who do not have that financial flexibility.
Kokai: That is one of the things I think that is important for us to note, Lindalyn – is that the idea is to get more parents, parents of all portions of the economic spectrum, a chance to participate in school choice. Why is that important?
Kakadelis: It’s important because, I don’t care how good a school is, how great it performs. There [are] always individual students that it is just not a right fit for, and we need to provide as many educational options as we can for the simple reason that we see children not being successful in school. Right now we have a third of the students that are not even graduating from high school. Over 23,000 students did not graduate from North Carolina high schools. We have fourth-graders that are not at state proficiency standards. And so, this way, families can have another option that might work for their child.
Kokai: Let’s get back to the top of the interview. I mentioned three different things that might be benefits from the education tax credits. We have already discussed giving more parents a choice. Another idea that is part of this is lowering the cost of running public schools. How could an education tax credit help in that regard?
Kakadelis: Well, what we have seen in other states is that the tax credit amount would be less than what the pupil expenditure is at the state level. For example, if the state is giving $5,000 per child, but, say the tax credit is $3,000 or $3,500, the excess of that amount would go directly to the public schools or back into the state coffers. It could do either way. So it could be a win-win for everyone.
Kokai: So basically to get our hands around this again, the idea is that the tax credit would not be as large as the cost of educating a child in public schools, so if you give the parent a tax credit, they are still paying some money toward the upkeep of the public schools?
Kakadelis: That’s exactly right, so that we are not just draining money from the public school system, [like] what a lot of – I call them the educrats – would say: “We can’t do this because we are draining money.” No, it’s not that way. What we are doing is providing a little financial assistance to let parents choose what they would like to do, or where they would like their children to go to school.
Kokai: We also mention as one of the three items at the top of this interview – in addition to giving more parents a choice and lowering the cost of running public schools – improving student performance. How could a tax credit help with this goal of making all students perform better, or helping all students perform better?
Kakadelis: Well, Mitch, what it does is, it changes the environment that the child is in. The parent then has, is empowered enough, to go and find a school that would best meet the needs of their child. And so with that, you are going to have better student achievement because no one should be forced to attend a school that they do not want their child to go to. So this would help overall. So it’s a win-win for everyone.
Kokai: Let’s get into a couple of the items that could be obstacles to tax credits. First of all, legalities. Is this something that would fit within North Carolina’s laws or with the North Carolina constitution? Could we have tax credits?
Kakadelis: We did a joint project with the Institute for Justice a few years back to look specifically at that issue. And what they found, what the legal scholars there said is, that the North Carolina constitution is one of the best constitutions to allow the parents freedom to choose their school, and [for] money following the child. They said that the basic education program for the state – we have added to it many times. We added pre-K programs. So we have a basic program in our state and there is nothing in our constitution that wouldn’t allow the lawmakers to add to that.
Kokai: How about also the issue of partisan support? Obviously, some people might hear something coming out of the North Carolina Education Alliance, which is a project of the John Locke Foundation, and say, “oh, this has got to be something that only one party can support.” Have tax credits worked in states that have Republican-Democratic mixed leadership?
Kakadelis: Oh, yes. We have seen it in Arizona. We have seen it in Pennsylvania. We have seen it even in Washington, DC – that we have seen where bipartisan support for the program is what gets it passed.
Kokai: What do you think it is about the program – the idea of tax credits – that gets support from all sides of the political aisle?
Kakadelis: Well, I think first of all, as we discussed earlier, it is a social justice issue. We need to be able to have lower-income families and middle-income families have this opportunity. Like I said, it already exists, but only exists for some families. Another reason is it begins to make schools compete with one another. You can’t just count on a monopoly any longer in government schools. They would be able to choose the school they wanted to go to.
Kokai: One of the other things that might be of interest is that a lot of parents like public schools, want to keep their kids in the public schools. A tax credit could benefit people at public schools, private schools, home schools, couldn’t it?
Kakadelis: Exactly. It could pay for extracurricular activities. It could pay for computers at home. It could vary in how it meets the needs of families. And it does vary from state to state, and that was one of the reasons why we thought it was important to have these two reports available for the citizens of North Carolina.
Kokai: Now that the reports are out, what do you hope happens?
Kakadelis: We hope that it just increases the dialogue on what could happen in North Carolina. These are not foreign ideas. North Carolina would not be the first state to introduce something like this. We have states that have gone before us. So the reports, hopefully, will increase the dialogue, not only in Raleigh, but from the mountains to the ocean.