ISSUE EXPLAINER

The Federal School Voucher Scheme Is Wrong for Connecticut

 

The Federal Scholarship Tax Credit is nothing more than a voucher scheme that will cut funding available to public schools and direct it to private schools and non-public education programs. Now that the U.S. Department of the Treasury has released preliminary regulations for the voucher program, it’s clearer than ever that this isn’t the right choice for Connecticut.

Below are just some of the major problems with the federal voucher scheme.

1. Public Schools Don’t Benefit
   This program doesn’t require that any amount of resources be directed to public schools or underresourced students. It does not allow public schools to be direct recipients of funds.
2. Lack of Accountability
   Scholarship granting organizations (SGOs) receive taxpayer-subsidized donations and then decide how and to whom to allocate scholarships. SGOs have the sole authority to establish scholarship amounts and to decide who receives their scholarships. States cannot require, for example, that SGOs only award scholarships to low-income students or students from distressed municipalities. They cannot ensure these funds go where they would do the most good.
3. Threatens the Fiscal Health of Connecticut Public Schools
   For any taxpayer who donates through this program, the federal government will receive up to $1,700 less in revenue. The Treasury Department’s proposed regulations double this to $3,400 for households. The Congressional Joint Committee on Taxation initially estimated that the program would reduce federal revenue by more than $25 billion over 10 years, and that amount is expected to be much higher given the proposed doubled tax credit. The federal government has already cut education funding to states and has proposed deeper cuts going forward.
4. Helps Wealthy Families the Most
   Families earning up to three times their area’s median income qualify for the program (that’s up to approximately $380,000 across most of Connecticut and $470,000 in Fairfield County). Funds can be used for expenses including tuition, fees, uniforms, room and board, books, technology, and transportation–items commonly associated with private school attendance. States that already have voucher programs have found that the majority of families who use vouchers already sent their children to private schools before the voucher program was established.
5. Loss of Control for Connecticut
   States must abide by the federal voucher regulations and are prohibited from instituting their own additional requirements for SGOs. SGOs can spend donated funds as they see fit—including limiting them to students attending religious, private, or sectarian schools.
6. Opens Connecticut Up to Fraud and Abuse
   States that opt in are subject to federal regulations but bear the entire cost and burden of preventing fraud, waste, and abuse. They have no discretion when it comes to limiting SGO certifications yet shoulder all the responsibility for holding those SGOs accountable to law. Rampant fraud and abuse have been the calling card of similar voucher programs already operating in several states. Brookings education scholar Jon Valant puts it this way: “Trump’s voucher program will be the greatest source of waste, fraud, and abuse that we have seen in our lifetimes in K-12 education.”
7. Hastens the Privatization of Public Education
   Voucher programs in other states have grown a market of private vendors and education companies whose goal is to profit from public subsidies while redirecting public resources away from schools that serve all students. Learn more about how private equity is expanding into public education.
8. Not the Solution Connecticut Needs
   The state is already reviewing how we fund public schools thanks to Governor Lamont’s Blue-Ribbon Commission on Education Funding and Accountability. With much about the federal voucher program still unknown, Connecticut needs to concentrate on ensuring we fairly fund the public schools that serve 90% of Connecticut children before taking a risk on an unproven scheme.