Please Get It Right: Tax Credit Scholarships Are Not Public Funds

A Misinformation Trend That Needs to Be Corrected

Dear Future Writer of a School Choice Story,

I’m noticing a misinformation trend that I’d like to try to correct. It continues to reverberate like a cymbal crash through an empty canyon. And it’s not something merely repeated by a few random bloggers in basements with tin foil hats, but by some of the most prestigious media and public policy groups in the world.

On February 18, 2017, Laura Camera wrote in U.S. News & World Report:

Denisha Merriweather, who received a school voucher from Florida’s tax credit scholarship program to attend a private school and eventually became the first member of her family to graduate from high school and college, will be a guest of first lady Melania Trump….

Under Florida’s plan, the state uses public dollars to pay for private K-12 school tuition for low-income students and students with disabilities.

Then on April 5, 2017, Elizabeth Mann and Diana Quintero wrote for the Brookings Institution Brown Center Chalkboard:

While different, vouchers, ESAs, and scholarship tax credits share an important (and controversial) trait: providing parents the option of using public funds for students to attend private schools.

And then I was finally triggered to write this by what Geoff Mulvihill wrote yesterday for the Associated Press:

The movement has been cleaved into two camps: those who want to use choice to improve public schools and others, like Education Secretary Betsy DeVos, who want to go further by allowing tax money to flow to private schools through vouchers, government-funded scholarships or corporate tax credits.

My simple message to these and future writers is that tax credit scholarships, like funds from any other tax credits or tax deductions, are neither “public dollars,” “public funds,” nor “tax money.”

This is just as incorrect as saying public funds pay the mortgage interest on my house, donate money to my local church or buy the cereal for the child that I claim as a dependent. Dollar amounts that I do not pay the government cannot be called government funds, simply because I might have paid those funds as taxes if the tax policies were different.

Here’s a simple test. All public funds are at some point held in a government account, meaning they appear on a federal, state, county or municipal spreadsheet somewhere. Many of these balances are posted online, and if they aren’t, you could submit a Freedom of Information Act request to see the government account totals yourself. By contrast, funds I don’t pay because of a tax credit or tax deduction are never part of any government account. That’s how you know they aren’t public funds.

Only sometimes is this particular malapropism is inadvertent. Other times the concept of “taking from” public schools is used quite intentionally because it fosters the righteous indignation associated with theft. As if school districts rightfully earned that money, but then someone broke in through an unsecured window and pilfered it from its owners in some kind of tax credit scheme. (“Scheme,” the very word used by Bob Perry of the New York Civil Liberties Union in Politico.) In fact, school districts have exactly the same claim to tax credit scholarship money as the U.S. Post Office has a claim to the money I pay to FedEx or UPS: None. Just like with package delivery, it’s the entity performing the service that deserves the money, not the entity that didn’t perform the service, but happens to be part of the government.

The very premise of tax credit scholarship programs and why they’ve eluded constraints of the so-called Blaine Amendments built into certain state constitutions is that they do not represent public funds. Here, judicial precedent and common sense agree. Courts have understood distinction all over the country, like in Florida, Georgia, and New Hampshire. Even the vaunted New York Times, (which I often refer to as “America’s Conscience”), admits:

Tax credits for vouchers also allow states to circumvent so-called Blaine amendments, legal prohibitions against the direct disbursement of public funds to parochial schools that were added to many state constitutions in the 19th century during a wave of anti-Catholicism.

Fortunately, state Blaine Amendments may not be long for this world anyway because of a SCOTUS case called Trinity Lutheran. But in what may be the Blaine laws’ last waning moments, I ask you, future school choice story writer, what does The Times mean by the circumvention cited above? Can you tell me what about tax credit scholarship plans allow them to so circumvent? If you’re still struggling with this, here’s the answer: Tax credit scholarships are not public money, nor have they ever been.

It would be nice to stop seeing this misrepresented. Or, if you’re dead set on furthering it, please henceforth also refer to your mortgage interest deduction as “public funds.”

Bob Bowdon

Bob Bowdon has been a television producer, reporter, political commentator, documentary filmmaker and satirist. He is currently the Executive Director of Choice Media, an education news service, website and smartphone app.
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