Education tax credits that save school systems money

By Jim Stergios
July 20th, 2008

From Andrew Coulson at CATO comes a new study of the budgetary impacts of the Institute’s education tax credit model legislation on five states.

It is estimated that, in its first 10 years of operation, savings from the PETC program would range from $1.1 billion for South Carolina to $15.9 billion for Texas. Illinois, Wisconsin, and New York are estimated to enjoy 10-year savings within that range.

Public Education Tax Credits reduce the state and local taxes owed by anyone who pays for the private schooling of an eligible child. Parents can claim credits for their own children’s educational costs, and other taxpayers (including businesses) can claim credits when they pay for the education of someone else’s child, either directly or by donating to a nonprofit scholarship-granting organization.

With the paper, Coulson presents a “generalized spreadsheet tool (”the Fiscal Impact Calculator”) that can estimate the program’s effect on any other state for which the necessary input data are supplied.”

For the full study, go here.