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How Does Florida's Expanded Tax Credit Scholarship Law Compare Nationally?

CER in the News

06.25.2014

Arianna Prothero, Education Week

Although Florida has significantly raised the eligibility caps on its tuition tax-credit scholarships to include more middle-income families, it is still far from the most generous program in that regard nationwide.

Tuition tax-credit laws allow businesses or individuals to claim tax credits for donations made to approved scholarship organizations which then distribute money to eligible students. Opponents charge that such programs siphon money away from public schools and into private, religious schools.

‘Solidly Middle Class’

Starting in 2016, students from Florida households making about $62,000 a year (260 percent of the federal poverty level) will be eligible for tax-credit scholarships, although the amount of the scholarships will vary based on family income levels. Currently, Florida law caps the program at roughly $44,000 annually which is just below the median yearly household income of about $47,000 according to the most recent U.S. Census estimates.

With the higher income cap, the tax-credit scholarships have moved well into the realm of being a school choice policy for both low- and middle-income families.

“I would say $60,000 fits in the middle class,” said economics professor Sean Snaith with the Orlando-based University of Central Florida. “It’s not going to get you a house in Miami, but there are many areas, particularly rural, where that’s solidly middle class.”

This income-cap creep is not unpredictable. Many tax-credit scholarship and voucher programs start off serving disabled or low-income students and then expand, says Chris Lubienski an education policy professor at the University of Illinois Urbana-Champaign.

“It’s a foot-in-the-door strategy we’ve been seeing,” he says. “You start such a program for a […] population that is underserved, and then you start expanding from there.”

Low Caps, High Ranking

However, among the 14 states that have tax-credit scholarship programs, several set much higher income caps than Florida’s.

Brace yourself: We’re not done with the numbers yet.

For example, a family of four in Oklahoma has to make 300 percent or less of the eligibility level for the federal free and reduced lunch program, which is roughly $130,000 a year, to qualify for an education tax-credit scholarship, while in Georgia and South Carolina there is no income limit at all, according to data from the Center for Education Reform, a school choice advocacy and research group in Bethesda, Md.

“Florida’s previous eligibility level of 185 [percent of] the federal poverty rate tied the state for the most-restrictive participation limit,” says CER senior policy advisor Brian Backstrom. “The broader reach offered under the higher income-eligibility limit moves it only to 11th place out of the 14 states.”

Other areas of Florida’s law are more generous: The state has a system in place to automatically increase the number of available tax-credits by 25 percent if 80 percent of the credits are claimed in the previous year. Florida awarded 100 percent of its credits last year.

The CER recently awarded Florida an “A” for its tax-credit laws, ranking it only second nationally behind Arizona.

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