I am a long-time fan of school choice. It produces better student outcomes and propels improvements in systems resistant to reform. I am not a fan of scholarships tax credits. They undermine federalism, which gave rise to the school choice landscape. Scholarship tax credit programs tend to grow slowly, and they are accessed least by those who need them most.
Can school choice and tax credits be effectively wed in the federal scholarship tax credit legislation recently enacted by the Trump administration? In North Carolina, where I live, that prospect has produced both excitement—for the chance to turbocharge the choice movement—and apprehension. Dancing with federal bureaucracy risks overregulation and unraveling years of gains. The real question is: Can an admittedly imperfect vehicle, the scholarship tax credit, be improved to produce genuine gains for families and states? If federal regulations devolve power to the states and honor federalism, it’s possible. Three recommendations may help get us there.
Give states maximum flexibility. Scholarship tax credits threaten other choice programs. North Carolina’s largest school choice program, the Opportunity Scholarship, provides vouchers for private-school tuition to 80,000 students. Another program provides parents with Education Savings Accounts to help with the expenses of special needs students. Will federally sponsored scholarship tax credit expand these programs or compete with them? I believe regulators must underscore the primacy of state authority and provide the flexibility to administer existing programs. States must also be allowed to create a tax credit program for district and charter schools that assist students with tutoring, testing, or other services. This flexibility is only possible when regulations respect state authority to administer their programs. Without these actions, federal regulations continue to grow and school choice programs are undermined.
Empower states to add eligibility and accountability requirements. State officials charged with administering programs must have the authority to write the rules for the programs they operate. Does the state want a program focused on students from lower-income households or a universal program? States must also be able to decide accountability requirements, testing requirements, and metrics to assess academic progress for schools that enroll scholarship students. Minus this authority, federal regulators with less knowledge of the local landscape fill the gap.
Protect religious freedom and institutional autonomy. Approximately 70 percent of children enrolled in North Carolina’s largest school choice program attend church-related schools. For this program to keep thriving, regulations must protect the principles of religious freedom and institutional autonomy. Religious freedom guarantees the rights of individuals to practice their religion. Institutional autonomy ensures that religious schools can administer schools in ways consistent with their values and mission. Federal regulations must honor both and keep schools free of federal entanglements. Without these protections, school choice becomes no choice.
