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

by Bob Bowdon

Dear Future Writer of a School Choice Story,

I’m noticing a misinformation trend that I’d like to try to correct. I’m referring to precisely one particular apocryphal claim reverberating 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.

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.” And yet, I continue to see the following:

On February 18, 2017, Lauren 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. [Emphasis mine]

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. [Emphasis mine]

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. [Emphasis mine]

This is just as incorrect as saying some public funds are used to 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. Actual 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 even if they aren’t, you could theoretically 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 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 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, and courts have understood this 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 it is about tax credit scholarship plans that underpins the circumvention of which they type? 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 also henceforth refer to part of your mortgage interest deduction as “public funds.”

Originally published at on May 15, 2017.

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