Jim Kelly, Editor’s Note: This piece was coauthored by Gerard Robinson.
During the 2020 election, school choice finally received the national attention it deserves as one of the top civil rights issues of our times. To build on that momentum, advocates for the public funding of parents to choose a K-12 education for their children in public, private, or religious schools need to educate lawmakers and the public about the educational, social, cultural, and economic benefits of school choice.
With respect to the last benefit, a new analysis of the fiscal and economic impact of Georgia’s K-12 tax credit scholarship program provides groundbreaking evidence of the significant positive impact school choice programs have on state and local budgets and economies.
In 2008, Georgia lawmakers adopted the Education Expense Credit program, which awards Georgia income tax credits to taxpayers who contribute to qualified non-profit student scholarship organizations (“SSOs”). The SSOs use the contributions to provide scholarships to parents desiring to send their children to K-12 private religious or secular schools.
Presently, each year, Georgia taxpayers have access to up to a total of $100 million of education expense credits, a sum which pales in comparison to the state and local K-12 education budget; but, which is significant enough to warrant an analysis of the fiscal and economic impact of the program.
To this end, in 2018, Georgia lawmakers adopted legislation requiring the state auditor to analyze the performance of the program in 2023. The analysis is to consider the net change in state revenue; net change in state expenditures; net change in economic activity; and net change in public benefit.
Georgia’s mandatory economic performance audit of the State’s K-12 tuition tax credit program presents a groundbreaking opportunity to produce a national model for assessing the fiscal and economic impact of school choice programs.
To facilitate the implementation of Georgia’s mandatory performance audit, applying the elements set forth in the legislation, the Education Economics Center at Kennesaw State University conducted a fiscal and economic analysis of the Education Expense Program. The Center’s “fiscal” analysis consisted of an analysis of the net changes in state revenues and state expenditures from offering the tax credits, awarding scholarships, and administering the program.
The Center’s “economic” analysis analyzed how an increase in educational attainment results in changes in economic activity due to increased lifetime earnings accruing to scholarship recipients and changes in public benefits accruing to others and society. The analysis considers public benefits as those resulting from an increase in educational attainment, including increased tax revenue, reduced criminal behavior, fewer health care costs, and less dependency on welfare programs.
In performing the analysis, the Center used scholarship award and student outcome data provided by Georgia GOAL Scholarship Program, the State’s largest SSO, receiving 45% of statewide contributions and awarding 5,855 scholarships in 2019.
According to the Center’s analysis of fiscal impact, the taxpayer cost of tax credit scholarships is significantly less than the taxpayer cost of educating scholarship students in public schools, with total taxpayer savings of $53.2 million in academic year 2018-19 for the entire Education Expense Credit program.
In calculating the economic impact of the program, the Center used data from three cohorts of ninth grade students from academic years 2013-14, 2014-15, and 2015-16 (a total of 784 students), which is the most recent cohorts for which educational attainment could be observed. The Center compared the educational attainment of these GOAL students to traditional public school students and estimated the present value of lifetime earnings associated with increased educational attainment, including high school graduation and college entrance.
Comparing the educational attainment of GOAL students to traditional public school students:
- Of students who received a GOAL scholarship to attend a private school, 99 percent graduated from high school compared to 82 percent of traditional public school students (with GOAL scholarship students who qualify for free or reduced price lunch (“FRL”) graduating high school at a significantly higher rate: 98 percent to 77 percent)
- Participating GOAL scholarship students also enter college at a higher rate, 87 percent, than public school counterparts, 68 percent. Additionally, GOAL scholarship students who qualify for FRL enter college at a rate of 26 percentage points more than similar public school students, 84 percent to 58 percent.
Using cautious estimates from literature on the returns to educational attainment, theCenter determined that, on average, the estimated combined economic benefit from increased high school graduation and college entrance for each of the three cohorts of ninth grade students is $15.6 million. If extrapolated to all scholarship students participating in the Education Expense Credit program, the estimated combined economic benefits for the program-wide cohort of 1,112 ninth grade students starting high school in 2018 is $66.4 million.
Thus, according to the Center’s application of the elements comprising Georgia’s mandatory economic performance audit of the scholarship program, in relation to the 2018-2019 academic year, the program saved Georgia taxpayers $53.2 million and will enable 1,112 ninth grade students to secure a K-12 education that will generate an estimated $66.4 million in economic benefits for Georgia.
Jim Kelly is the Founder and General Counsel of the Georgia GOAL Scholarship Program. Gerard Robinson is a Fellow at the Institute for Advanced Studies in Culture Foundation at the University of Virginia.