School Choice in South Carolina: 2014
THIS YEAR, AT LEAST ONE PROPOSAL IS ACTUALLY ABOUT SCHOOL CHOICE
Fourteen representatives in the House came together on February 6 to co-sponsor the most significant attempt at school choice from General Assembly in recent years. The bill – H.4624 – has the potential to improve the education of, not just some, but all South Carolina children. This is due primarily to two factors: (1) its empowerment of parents, and (2) the absence of weakening caveats. The provisions of H.4624 are consistent with many of the suggestions we made for improving last year’s prominent school choice bill, S.279.
H.4624 empowers parents by offering a tax credit to all parents or guardians with a child eligible to be enrolled in a South Carolina elementary or secondary school who either homeschool their child or pay tuition for their child to attended an independent school. The credit would be worth up to $5,000 for either the homeschool expenses or tuition.
This tax credit provision is significant for several reasons. First and most obviously, it’s a credit and not a deduction. As we have discussed before, credits are superior to deductions because they allow average or low income families to save a much larger amount of income, which could then be applied to their child’s education. This is because tax deductions change the amount on which you are taxed before taxes apply. Tax credits, on the other hand, are subtracted from your final tax liability. In this case if state income taxes owed were $5,000 or less, a credit worth $5,000 would completely eliminate income tax liability.
Second, unlike other school choice efforts, the credit offered here is offered directly to parents rather than scholarship organizations. By offering the credit directly to parents, H.4624 ensures that families will have access to the credit without having to go through an application process. Avoiding the middle man of the scholarship organization also potentially enlarges the pool of possible schools for families as scholarship organizations may not grant scholarships to various schools for their own reasons.
Outside of the tax credit provision H.4624 is notable for its simplicity. A school doesn’t need to belong to a small group of named associations to be eligible for the credit. The tax credit can be claimed for tuition paid to any school where the state’s existing compulsory attendance law can be met. Also notably absent are restriction of credits to select children (special needs, low income) and a cap on the total value of tax credits that can be claimed under the program. The absence of these provisions ensures that every South Carolina child will have an opportunity to take advantage of the tax credit program.
Finally, the bill doesn’t require independent schools that qualify under the program to administer national or state-level standardized tests. Freedom from the requirements of standardized testing will allow eligible schools to innovate educational approaches that best serve the needs of their students.
H.4624 isn’t a panacea for the state’s education ailments, and it shouldn’t be the last word on school choice even if passed. Still, it would be a significant step towards improving the state of education and educational choice in South Carolina. The tax credits would save the median South Carolina family up to $2,643. While this amount would not cover the full average cost of tuition at independent schools that ranges (depending on the grade) from $3,232 to $4,702, it would go a long way to making the remaining out-of-pocket costs more affordable for average families.
South Carolina, in common with all 49 other states, has committed to providing its youngest citizens with an education, but this promise doesn’t mean much unless that education is of a sufficient quality. Every step towards increased educational choice will make the state’s promise more meaningful by improving the quality of education through the power of competition.
. . .
Below we’s compared four major school proposals currently being considered by the General Assembly. The two bills are (S.279 and H.4624) are both now in the legislature, as are the governor’s proposal and budget proviso 1.85 (the proviso was passed last year but must be reauthorized every year).