Wisconsin Wants to Join States That Offer Private-School Tax Credits

Wisconsin not only wants to join the more than handful of states that give families tax breaks for sending their kids to private schools, its lawmakers are proposing what would be the most generous tax deduction of them all.
by | June 10, 2013
Private school students walk to school in Indiana, one of the states that already offers tax deductions or credits for parents who enroll their children in private school. (Photo: AP/Joe Raymond)

Have a mortgage? Take a tax deduction. Donate to charity? Take another. Contribute to your retirement savings? Knock a few more dollars off. Send your child to private school? Well, in Wisconsin, that could soon be tax-deductible, too.

Last week, the Wisconsin legislature’s Joint Finance Committee approved new tax deductions for families that put their kids in private school as part of its 2013-2015 budget. The plan allows for families to deduct up to $4,000 for every student in kindergarten through eighth grade and up to $10,000 for every high school student. With nearly 100,000 Wisconsin students enrolled in private school, according to the Milwaukee Journal-Sentinel, the deductions are expected to cost the state $30 million annually.

The plan must now be approved by both chambers and Gov. Scott Walker. Proponents presented the proposal as a victory for the school choice movement.

“I'm not sure this is enough to change (parents') behavior but it's something we can build on in future budgets,” State Sen. Glenn Grothman told the Journal-Sentinel. “It's high time we help parents who want a different sort of curriculum than they get in public schools.”

But the state’s largest teachers union, generally supportive of public schools, denounced the plan alongside a separate budget provision that expanded Wisconsin’s school voucher program.

“Wisconsin lawmakers … have advanced a plan that offers a pittance to the majority of children in an attempt to distract citizens from the fact that they are opening the floodgates for taxpayer funding of private school tuition,” Mary Bell, president of the Wisconsin Education Association Council, said in a statement. “To make this budget even worse for public school children, legislators added a double dip provision to benefit private schools by providing tax deductions for private school tuition.”

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Wisconsin is the most recent state to propose tax deductions for families who send their children to private schools, but it isn’t the first. In 2011, North Carolina approved a more limited plan, which set aside a $6,000 annual deduction for parents of special needs students who move their child from a public to a private school. Earlier this year, Alabama lawmakers passed a new school choice law that included a provision allowing a $3,500 tax credit to help parents whose children attend failing public schools to transfer them to a private school.

According to the Thomas B. Fordham Institute, a conservative education reform think tank, five other states, prior to 2013, offered tax deductions or credits for parents who enroll their children in private school: Illinois, Indiana, Iowa, Louisiana and Minnesota.

Those existing programs are much less generous than Wisconsin’s proposed plan, however; all but one is capped at $500 or less. Minnesota’s program is the only one as broad as the one moving forward in Wisconsin (available to parents of any private school student) and comparable in cost (offering deductions of $1,625 for every elementary school student and $2,500 for every secondary school student).

More states (11, according to the National Conference of State Legislatures) offer deductions for individuals or corporations that contribute to private school scholarship funds, which are then given to low-income students, but the Wisconsin plan is fundamentally different by offering the financial benefit directly to the private school families.

Its passage would be a “significant development” for the school choice movement, says Adam Emerson, who oversees the school choice program at the Fordham Institute. But he’s skeptical that the tax deduction plan as passed by the finance committee will ultimately become law. It’s been overshadowed by the debate over the voucher program, but Emerson expects it will draw more attention. Previous iterations have been derailed by the questionable politics of offering tax breaks to families that can already afford to send children to private schools.

“It’s been highly controversial to do this, so most states just haven’t gone there,” he says. “They tend to favor programs that tend to benefit low-income families. I think once people get in between the lines and realize what this is, you’re going to see a lot of opposition.”

Indeed, others have already argued such programs are “welfare for the rich,” as the Washington Post’s Valerie Strauss, who generally advocates for public schools, called them in a recent column. That’s because the tax breaks go almost exclusively to wealthy individuals or corporations, argued Strauss, who lumped the direct deductions and scholarship credits into the same group. She, likes others, criticized the programs for effectively sending money to schools that are affiliated with specific religions and that operate outside the accountability system that public schools face. Strauss also questioned if it was a wise use of taxpayer dollars during a period of fiscal austerity.

“At a time when government budgets at all levels are under enormous strain, families and businesses are struggling and federal agencies are facing dramatic across-the-board spending cuts, you would think lawmakers would be careful about spending public money,” she wrote. “So it may surprise you to learn that in a growing number of states, legislators are setting aside public money to pay for private school tuition—and rich people are benefiting.”

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