A Republican plan to fund private school vouchers is being considered as part of federal budget talks going on now. Critics say it has the potential to be an unregulated tax giveaway to the country’s wealthiest people and corporations.
Voucher programs provide public money to pay for private schooling, usually with minimal oversight. Private schools don’t have to meet nearly any of the academic, civil rights or access requirements placed on public schools.
Voucher proponents say the programs provide parents with alternatives to their local public schools, but data indicate the majority of voucher recipients were already attending private or home school, according to a 2023 Education Week article.
Public education advocates say voucher-type programs drain resources from public schools in a variety of ways.
The Educational Choice for Children Act would create a national voucher system using the tax code, overriding the will of states that have opposed vouchers. Oregon does not offer vouchers. The act’s language could potentially be subsumed into Republicans’ efforts to craft one big federal budget bill.
The act proposes offering at least $10 billion a year in tax credits for donations to entities providing educational scholarships, which includes vouchers for private schools and a variety of other unregulated and undefined “instructional expenses.”
The National Coalition for Public Education is strongly opposed, as is the AASA, the national school superintendents association. OSBA sent a letter this week to members warning about the legislative effort and possible repercussions and calling on them to contact their national legislators.
Adrienne Anderson, OSBA government relations counsel, analyzed the bill for OSBA’s members. Anderson found the bill lacks important specifics and meaningful oversight while offering loopholes big enough to drive a bank truck through.
The vouchers have no minimum or maximum amounts, and the bill seems to prohibit the state from checking on how the schools are setting their tuition or using the public funds. The vouchers would be available to households earning up to three times the area’s median income, in excess of $200,000 a year in much of Oregon.
“About the only thing we know for sure is that the wealthiest Americans are the most likely to benefit from the tax breaks at the cost of our public schools,” Anderson said.
The act’s potential budget repercussions are complicated and overlapping.
The act offers a dollar-for-dollar tax credit for donations, far more than the typical charitable giving deduction. Individuals can give up to $5,000 or 10% of their adjusted gross incomes, whichever is greater, and corporations can donate up to 5% of their income. The act offers the same credit for stock donations, allowing donors to cash in the full value of their stock without paying capital gains tax on the amount it grew in value since purchase, a huge savings in state and federal taxes.
This voucher plan would cut into federal and state collections, to the tune of almost $27 million over 10 years in Oregon, according to the Institute on Taxation and Economic Policy.
Chris Allanach of the Oregon Legislative Revenue Office estimated Oregon receives about 8% of its tax revenue from capital gains, mostly from higher income taxpayers. He said the office is still analyzing the bill to understand how it might affect Oregon’s budget.
The act has no provisions to replace federal or state income, so Oregon would have to make equivalent budget cuts if the program is enacted.
For schools, the pain could be compounded, according to Anderson. School districts’ funding is based on enrollment. Fewer students in public schools equals less funding. At the same time, the districts’ costs per pupil would likely go up, Anderson said.
Private schools choose their students and often don’t have the capacity or will to serve students with the most high-cost, complicated or challenging needs. Public schools must serve all. So private schools can use vouchers to take in the most easily served students, usually from families with the most personal resources, while students who need the most support would be concentrated in public schools.
Public schools are still required by law, though, to provide in some cases a variety of services such as language help, testing and special education support regardless of where a student attends school.
Vouchers are often described as “school choice,” but Anderson points out that many areas of Oregon have few if any private schools.
“Parents in many of our districts, especially our rural ones, are going to see their schools lose funding to pay for private schools their children can’t possibly attend because they are too expensive or they simply don’t exist,” she said. “It’s not really a choice for all students.”
Becky Tymchuk, OSBA Legislative Policy Committee member, called the proposal “a can of worms.” Tymchuk is a Northwest Regional Education Service District board member and before that she served on the Beaverton School Board for eight years.
Beaverton, Oregon’s third largest district, includes some of Oregon’s wealthiest areas around Nike and Intel and high poverty areas in western Portland and its suburbs. The district offers robust public option schools while its borders also contain two of Oregon’s most prestigious private schools, Jesuit High School and Oregon Episcopal School.
Tymchuk said the district estimates that about 10% of its eligible students attend private schools. She said her sense was that the vouchers would mostly go to students already attending private schools and the household savings would go to those who had already decided they could afford private school.
Tymchuk, though, doesn’t want a fight over vouchers to distract from the real education challenges the state already faces.
“We have not found a place where we are funding public education where we need to,” she said. “This is not going to help.”
Tymchuk worries deeply about school funding being “siphoned” away, whether directly through enrollment drops or indirectly through the state losing tax collections.
“Public education is what floats all boats,” she said. “We still have to take care of the public good.”
– Jake Arnold, OSBA
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