Tuition tax credits could save Utah millions

Since approving charter school legislation in 1998, Gov. Mike Leavitt and the Legislature have been trying to instill more creativity and choice in Utah's K-12 system. Charter schools have become their educational choice du jour. Utah's stagnant economy, though, has hampered their quest. During the last few legislative sessions, declining tax revenues have forced them to pare back the education budget, even as the state prepares for 100,000 new students over the next 10 years.

On Wednesday Utah's legislative fiscal analyst, Michael Kjar, hinted at a way out of this fiscal quagmire. He told the Education Interim Committee that tuition tax credits will allow the state to plow millions of dollars back into the education system without raising taxes or cutting services.

Educating a child in a traditional neighborhood school costs the state roughly $2,846; in a charter school, it costs $3,557. There are other fixed costs, like building maintenance, but the state and school districts have to pay these costs regardless. However, when families choose tuition tax credits, the state saves the $2,846 it would have paid to educate that child. Instead, it would pay $1,685, the value of the average tuition tax credit. The difference between these figures — $1,161 — is what the state would save each time a student used a tuition tax credit to switch from a public to a private school.

Although opponents of more choices for Utah families quibble with some of Kjar's numbers, they estimate the value of the average tuition tax credit to be closer to $2,200, for example. Their own numbers point to per-student savings. The real question is how many students will take advantage of a tuition tax credit. Tuition tax credits would hardly be worth the effort if only one student used them.

Children First Utah provides a rough answer. CFU awards partial scholarships to low-income families who want their children to attend a private school. Note that these scholarships are partial — the parents must find a way to cover the balance of the tuition. Nevertheless, last year CFU awarded $341,852 in scholarships to nearly 300 students.

Even more telling, though, is its waiting list. Although CFU relies almost exclusively on word-of-mouth for marketing, more than 1,400 students have qualified and are waiting to receive a scholarship. Organizations like CFU across the country find themselves in the same predicament: They must turn away thousands of low-income parents looking for a better choice for their children.

If CFU's waiting list is any indication, many families want better educational choices for their children. If just those students used tuition tax credits to attend a private school, over the next 10 years the state would save more than $16 million. That may not solve the state's budget crisis but it beats not having tuition tax credits.

---

M. Royce Van Tassell is the incoming director of Education Excellence Utah.