New Report: School Choice in Indiana Would Help Families, Provide Long-term Savings for Taxpayers.
Contact: Andrew Campanella
Director of Communications Phone: 202-280-1985 Mobile: 202-276-1303
04/22/2009
Indianapolis, Indiana (April 22, 2009)—If passed, a new school choice proposal would, in just five years, save Indiana taxpayers millions of dollars annually, according to a report released today by the Friedman Foundation for Educational Choice and cosponsored by the Alliance for School Choice and School Choice Indiana.
The report—which was developed after months of research—comes as legislators are considering a corporate and individual scholarship tax credit program. The initiative would reward generous taxpayers and corporations for making donations to organizations that grant scholarships so that low-income children can attend private schools.
Specifically, the proposed program would provide up to $5 million in tax credits for donations to Scholarship Granting Organizations (SGOs). Each donation would be eligible for a 50 percent tax credit from the state.
Participation in the program would be limited to students who were not enrolled in private schools in the previous school year and whose household income is at or below 200 percent of the federal free and reduced-price lunch program.
According to the report, “The Fiscal Impact of a Corporate Tax Credit Program for Private School Scholarships on the State of Indiana,” the program would provide a multitude of benefits to the state and to individual families. For example:
After five years of operation, the program is estimated to save the state anywhere from $6.4 million to $17.6 million per year.
At a minimum, the program will serve 1,900 students—providing these children with an opportunity to attend the schools of their parents’ choice.
More than 35,000 families could apply for the scholarships if organizations set scholarship amounts at a certain point.
SGOs will have the flexibility to distribute scholarships of larger dollar amounts, which will create an increased demand from Indiana’s low-income students without causing additional costs to the state.
Similar research has demonstrated that scholarship tax credit programs save hundreds of millions—if not billions—of state and local taxpayer dollars. Nationwide, there are seven scholarship tax credit programs operating in six states, serving 109,604 children.
Similar scholarship tax credit programs have been embraced with bipartisan support in states such as Georgia, Iowa, Florida, Pennsylvania, and Rhode Island.
"This study provides even more reason for legislators in Indiana to pass the proposed tax credit into law," said Lori Drummer, director of state projects at the Alliance and Advocates for School Choice. "The program is innovative and it demonstrates smart policy. It's a win-win, helping provide additional options to families and saving money for all taxpayers."
The Alliance for School Choice is the nation's largest nonprofit organization promoting school vouchers and scholarship tax credit programs. Visit the Alliance online at www.AllianceForSchoolChoice.org
