School Choice This Year?



As was the case last year – and just about any year over the last decade – the current session’s “school choice” bill turns out to be little more than lip service to the actual policy. S.279 rehashes last year’s bill, H.4894, which would have done little to help those families most in need of educational choices and assistance.

Like last year’s, this year’s bill doesn’t provide significant tax relief to those most in need of better educational options. Instead of offering tax credits to families, the bill offers tax deductions. Parents would be eligible for: a $1,000 deduction if they send their child to a school district outside of their district of residence, a $2,000 deduction for instruction expenditures if they homeschool their child, and a $4,000 deduction if they send their child to private school.

The problem with substituting deductions for credits is that they are of virtually no use to low-income families – those whose lives could actually be improved by an expansion of educational choice. In fact, since many taxpayers are not paying $4,000 in state income taxes, even a credit for this amount, while superior to a deduction, would fail to save the average taxpayer a full $4,000.

To illustrate this point, here are two scenarios:

  1. The median family income in South Carolina is $44,587.A family making this much would pay $2,643 in state income taxes a year. With the $4,000 tax deduction, the family would be taxed as if they were making $40,587 a year making their income tax bill $2,363 – netting them a total tax saving of a whopping $280.
  2. Unlike a deduction, a tax credit is subtracted from a taxpayer’s final income tax bill up to the value of the credit or until the income tax bill is $0. A family in South Carolina making the median family income and receiving a $4,000 credit would, as a result, be liable for $0 in state income taxes and would be saving $2,643.

Clearly, $280 is insultingly insufficient. But neither would the credit be likely to pay for a year’s tuition of private education – a surveycited by the South Carolinians for Responsible Government Foundation found the median private school tuition in South Carolina was $4,400 for grade seven and $4,500 for grade ten.2

Similarly, a survey carried out by Clemson University found that the average private school in South Carolina charged annual tuition as follows:

  • Kindergarten: $3,232
  • Grades 1-4: $4,092
  • Grades 5-8: $4,317
  • Grades 9-12: $4,7023

Private school tuition tends to average around $4,000, so even with the saving of the deduction intended to help finance this cost, a family making the median income in South Carolina would be left to come up with the remaining $3,720 themselves. Of course, families making less than the median income would save even less from the deduction and as a result would have to come up with more than $3,720 out of their own budgets to pay for tuition.

The $1,000 deduction for sending a child to a public school outside their district of residence and the $2,000 deduction for homeschooling are also somewhat problematic. The best public schools can only accept so many students, and sending a child outside of their district of residence for school every day has costs other than monetary – such as time. The $2,000 deduction for homeschooling is nice for those already homeschooling, but it’s difficult to see how a small tax deduction would provide an incentive for those not yet homeschooling to try this option.

S.279 would provide a tax credit, but it would offer little aid to the average South Carolina family. Income tax credits would be given to individuals equal to the amount donated to non-profit scholarship funding organizations providing grants to children to attend schools of their choice under the following conditions: the child must either (a) be eligible for the reduced school lunch program, (b) have exceptional needs, or (c) qualify for federal Medicaid benefits.

These credits will be capped at $15 million for contributions made on behalf of students who qualify for the reduced lunch program or whose families qualify for federal Medicaid benefits, and $10 million for contributions made on behalf of exceptional needs students. While this provision may increase the level of private scholarships for underprivileged children to some small extent, it’s hard to see why the money has to be funneled through scholarship funds rather than provided directly to deserving, disadvantaged children. (Indeed, a far better prescription would be to mandate that education dollars follow the child rather than flow in lump sums to school districts. See our paper on weighted student funding.)

After all, since public education exists in the first place to provide an education for those who might otherwise have no access to it, why should the government pass off a large part of this responsibility to private charity? If the state has an obligation to educate all children, it should take responsibility for all children. If it doesn’t, it should leave education to the private sector and private charity. Remember, too, that the state collects tax money from all citizens for the purpose of providing education to children, and that with rare exceptions it forces each child to attend the school for which he or she is zoned. The state has a consequent responsibility to provide all children some semblance of a good education. However its policymakers choose to meet that goal, they ought to understand that they do, in fact, have the responsibility to meet it.

At a time when the performance of South Carolina’s public schools is stagnant at best, as the state’s recent National Assessment of Educational Progress rankings show, more is needed than half measures and rhetorical gestures.

1 U.S. Census Bureau “South Carolina Quick Facts,” available online here.

2 South Carolina Center for Responsible Government Foundation. “Education Funding in South Carolina 2011-2012,” available online here (see page 4).

3 Cotton Lindsay, “Survey of Independent Schools in South Carolina,” BB&T Center for Economic Education and Policy Analysis, Clemson University, available online here (see page 2).

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