SCHOOL CHOICE PROGRAMS

• Arizona - Tax-Funded Scholarships
• District of Columbia - Means-Tested Vouchers
• Florida - McKay Special Needs Voucher
• Florida - Tax Credit Scholarships
• Florida - PreK Scholarships
• Illinois - Personal Tax Credit
• Iowa - Personal Tax Credit
• Maine - Town Tuitioning
• Minnesota - Tax Credit and Deduction
• Ohio - Cleveland Vouchers
• Ohio - Autism Scholarships
• Ohio - Educational Choice Scholarships
• Pennsylvania - Educational Income Tax Credit
• Pennsylvania - PreK Tax Credit
• Utah - Special Needs Vouchers
• Vermont - Town Tuitioning
• Wisconsin - Milwaukee Vouchers

ARIZONA
Tax Credits for Student Tuitioning Organizations
Enacted 1997, Began Operation 1998

Program Description
Arizona provides a credit on personal income taxes for donations to Student Tuitioning Organizations (STOs), privately run non-profit organizations that support private-school scholarships. Individual taxpayers contributing to STOs may claim a dollar-for-dollar credit of up to $500, and married couples filing jointly may claim up to $1,000. Also, up to $250 may be claimed for contributing to a public school for extracurricular activities or character education programs. Any non-profit that wants to operate as an STO may do so; there were 53 STOs in 2004-05.

Scholarship or Voucher Value
STOs provide varying amounts of student aid. In 2004-05 the average scholarship was worth $1,334.

Student/School Participation
In 2004-05, 21,160 scholarships worth a total of about $28.2 million were awarded at 334 private schools.

Student Eligibility
Each STO may set its own eligibility guidelines. Most STOs give to students based solely on financial need, sometimes concentrating on a specific location or school system. An individual taxpayer may not make a contribution to an STO earmarked for his or her own child.

Legal Status of the Program
In January 1999 the Arizona Supreme Court upheld the program under both the state and federal constitutions, and in October 1999 the U.S. Supreme Court turned down an appeal of that decision. In early 2001 the Arizona Civil Liberties Union (AzCLU) filed another lawsuit challenging the program under the federal Constitution in federal court. The U.S. District Court for Arizona dismissed the case under the federal Tax Injunction Act, which requires that challenges to state taxes must be filed in state court. In June 2004, the U.S. Supreme Court ruled that the tax-credit program could be challenged in federal court. The case returned to the U.S. District Court and in March 2005, the judge granted the Institute for Justice Arizona Chapter’s motion to dismiss the case and upheld tax credits as constitutional. The AzCLU appealed to the 9th U.S. Circuit Court of Appeals, where the case was pending at the time of this publication.

Regulations on the Program
STOs are required to be non-profit organizations that allocate at least 90 percent of their revenue to private-school scholarships. STOs must file fiscal reports with the Department of Revenue, may not use a donor’s money to support that donor’s child and may not restrict their scholarships to a single school. Participating private schools may not discriminate on the basis of race, color, handicap, familial status or national origin.

Research on the Program
The Arizona Department of Revenue finds that:

• From 1998 to 2004 the program raised $146 million in donations.
  
• From 1998 to 2004 the program awarded 98,300 annual scholarships.
  
• Donations grew 8 percent in the most recent year.

A 2004 Goldwater Institute report by Carrie Lukas found that STOs primarily distribute scholarships based on financial need, and that the program will likely be a revenue saver for the state by 2007 (the state loses money overall when scholarships go to students who were already in private school, but gains money overall when students use scholarships to transfer from public to private schools).

Governing Statutes and Amendments
Title 43-1089 and 43-1089.01 of the Arizona statutes

Program Description
To give parents in the District of Columbia the ability to select the educational setting that best serves their child’s interests and needs, the U.S. Congress passed the D.C. School Choice Incentive Act of 2003. This five-year pilot program was part of the omnibus spending bill passed in 2004 and became the first voucher program to be overseen by the U.S. Department of Education. The program is funded separately from District of Columbia public schools, so each year Congress must appropriate funds for it; the number of scholarships available will depend on these appropriations.

Scholarship or Voucher Value
The Washington Scholarship Fund, the designated administrator of the program, distributes scholarships worth up to $7,500. The voucher may be used for tuition, fees and transportation. Amounts may vary depending on need.

Student/School Participation
In 2004-05, 1,015 students received the voucher, despite a short, three-month enrollment window. Fifty-three schools participated in the program. Applicant numbers for 2005-06 have far surpassed the number of vouchers that will be available; the WSF has announced that it received 1.7 applications for each available voucher, and it expects to give out 1,733 vouchers in 2005-06. Sixty-two private schools have agreed to participate in the program for that year.

Student Eligibility
Any family in the District of Columbia that qualifies for free and reduced-price lunch is eligible. Families may earn as much as 185 percent of the federal poverty level when they enter the program; in 2004, a family of four could earn up to $34,873. Families will lose their eligibility if their income later rises above 200 percent of the poverty level. Actual participation is limited by the amount of money appropriated to fund the program each year. Preference is given to students who are enrolled in public schools deemed failing under the No Child Left Behind Act. If more students apply to a participating private school than there are seats available at that school, admission must be decided at random.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Schools must be in the District of Columbia and must have a majority of city residents on their governing boards. They must use no more than 3 percent of the total grant amount received for administrative expenses. Each year, the schools must provide a report to Congress on how the scholarship funds received were used. Schools must comply with antidiscrimination laws.

Research on the Program
The U.S. Secretary of Education and the D.C. mayor selected an independent group to annually evaluate the performance of scholarship students in the five-year program. The study will explore the achievement levels between scholarships students and public school students, success of expanding choice for D.C. parents and the impact on public school performance.

Governing Statutes and Amendments
House Resolution 2673, 2004 Consolidated Appropriations Act, Title III

FLORIDA
Mckay Scholarships Program for Students with Disabilities
Enacted as Pilot Program in 1999, Expanded Statewide 2000-01

Program Description
Any disabled student whose parents are unhappy with their assigned public school are eligible to receive a McKay voucher to send their child to a private school or another public school. Started in 1999 as a pilot in Sarasota County, the program originally was capped at 5 percent of eligible enrollment. It was expanded statewide in 2000 and the cap was removed.

Scholarship or Voucher Value
The voucher is worth the same amount public schools would have spent on each participating child, though it may not exceed the cost of the private school’s tuition and fees. Thus, the value of the voucher varies widely depending on the severity of the child’s disability; in 2004-05, McKay vouchers ranged from $3,885 to $22,248, and the average voucher was worth $6,117. In addition, parents may supplement the voucher with their own money.

Student/School Participation
In 2004-05, 15,910 students used McKay vouchers; 703 private schools participated in the program.

Student Eligibility
All students with disabilities – those who have Individualized Education Plans covered under the federal disability-rights law – and who have been enrolled in a public school for at least a year are eligible to receive the voucher. About 370,000 children statewide are eligible. Schools are not required to accept participating students, a particularly important factor for this program considering that not all schools are equipped to handle all types of disability.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Participating schools must hire teachers who have a bachelor’s degree, three years of experience or special qualifications. They must demonstrate fiscal soundness, comply with antidiscrimination laws, meet health and safety codes and complete a five-page notarized questionnaire covering issues such as the number of teachers and food safety inspections.

Research on the Program
A 2003 Manhattan Institute study by Jay Greene and Greg Forster found that:

• 93 percent of McKay participants are satisfied with their McKay schools, while only 33 percent were similarly satisfied with their public schools.
  
• Only 30 percent of current participants say they received all services required under federal law from their previous public schools, while 86 percent say their McKay schools provide all the services they promised to provide.
  
• 47 percent of participants were bothered often and 25 percent were physically assaulted at their previous public schools because of their disabilities, compared to 5 percent bothered often and 6 percent assaulted in McKay schools.
  
• Over 90 percent of former McKay participants who have left the program said the McKay program should continue to be available for those who wish to use it.

Governing Statutes and Amendments
2001 Florida Statutes, Title XVI, Chapter 229.05371

FLORIDA
Tax Credits for Scholarship Funding Organizations
Enacted 2001, Began Operation 2002

Program Description
Florida provides a tax credit on corporate income taxes (the only type of income taxes the state collects) for donations to Scholarship Funding Organizations (SFOs), privately run non-profit organizations that support private-school scholarships. SFOs provide scholarships worth up to $3,500 for low-income students. They also may provide students with funds for transportation to another public school. Businesses get a dollar-for-dollar tax credit for contributions up to 75 percent of their total tax owed, capped at $5 million to any single SFO. The overall size of the program is capped at $88 million.

Scholarship or Voucher Value
SFOs provide scholarships worth up to $3,500, though they may not exceed the actual private-school costs. At least 75 percent of the scholarship must be used for tuition, with the rest going for textbooks and transportation. Transportation grants are worth up to $500.

Student/School Participation
In 2004-05, six Scholarship Funding Organizations provided scholarships to 11,231 students.

Student Eligibility
Students who qualify for free and reduced-price lunch and who are either enrolled in public school or are about to enter kindergarten or first grade are eligible to receive scholarships. A family of four must earn $34,800 or less to qualify. Participating private schools are required to accept scholarship students, but if they have more applicants than open seats they are not required to admit students at random.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
SFOs are required to be non-profit organizations incorporated in Florida. They must disburse 100 percent of their income from tax-credit donations as scholarships in the same year in which it is received (administrative costs must be paid separately) and be audited annually by an outside accountant. They may not use a donor’s money to support that donor’s child. Participating private schools must complete a five-page notarized questionnaire covering issues such as the number of teachers and food safety inspections.

Research on the Program
According to The Florida Corporate Income Tax Credit Scholarship Program: A Preliminary Analysis by the Collins Center on Public Policy, “there will be slight declines in state tax collections” because of the tax credit, “but these declines will likely be offset by increases in the amount of statewide revenue available for education or other state purposes” because there will be fewer students in public schools. “Using a conservative growth rate of 1.9 percent for future education revenues, the increases in statewide net revenues could accumulate to more than $600 million over the next 10 years as low-income students leave public schools to participate in the scholarship program.”

Governing Statutes and Amendments
2001 Florida Statutes, Title XIV, Chapter 220.187

FLORIDA
Voluntary Pre-Kindergarten Program
Enacted 2004, Began Operation 2005-06

Scholarship or Voucher Value
The voucher amount is expected to be worth $2,500-$3,000, and may not exceed the pre-kindergarten’s actual tuition and fees.

Student/School Participation
It is estimated that in 2005-06 about 140,000 children, or 70 percent of those eligible, will participate in the program. The state expects a large majority of students will be served by private providers. Private providers will be approved by regional early-learning coalitions. The number of providers has yet to be determined.

Student Eligibility
Any Florida resident who turns four years old on or before Sept. 1 is eligible to participate in the program that fall. About 200,000 children statewide will be eligible in the 2005-06 school year. Participating private providers are not required to accept voucher students.

Legal Status of the Program
No challenges have been made to this program.

Regulations on the Program
Private providers must be approved by regional early-learning coalitions and obey civil-rights laws. They must be accredited, hold a current Gold Seal quality designation or be licensed to meet each of the requirements of the program. They must have four to 18 children in each class. If the class has more than 10 children, two adults are required. Full-year pre-K providers must have a director who holds the pre-K director credential and a teacher in each class who holds at least a Child Development Associate certificate or equivalent state-approved credential and completes a five-hour course in emergent literacy training. Schools may choose their own curricula with no restrictions on religious content. Summer pre-K providers must have at least one Florida-certified teacher or instructor in each class who holds a bachelor’s degree or higher in specified early learning programs. A child can enroll in only one of the three available options, and may leave and re-enroll in another option only one time. Parents may switch providers as they deem necessary. Schools will be evaluated based on readiness rates of children beginning with 2005-06 completers; providers with more than 15 percent of their students unprepared for kindergarten will face sanctions after four years.

Research on the Program
There has been no research on this program, which will begin in the 2005-06 school year.

Governing Statutes and Amendments
State constitutional requirement. State Statues 1002.51-.79h

Program Description
Illinois provides a tax credit covering educational expenses for students in any private or public school, including tuition, books and lab or activity fees. The credit is worth a maximum of $500. This makes it a little bit easier for families to choose a private school for their children.

Scholarship or Voucher Value
Parents receive a tax credit worth 25 percent of their expenditures after the first $250, up to a maximum credit of $500 per family. To get the maximum $500 credit, parents must spend $2,250 in educational expenses; they also must have a state tax liability of at least $500 because the credit is non-refundable and thus cannot reduce an individual’s tax burden to less than zero.

Student/School Participation
In 2003, 194,923 families saved about $67.1 million by claiming the education tax credit.

Student Eligibility
To be eligible, a student need only be a resident of Illinois who is under 21 and enrolled full-time in kindergarten through 12th grade.

Legal Status of the Program
In 1999, two separate suits were filed against the program, one by the Illinois Federation of Teachers and one by the Illinois Education Association and the People for the American Way. Both suits argued that the program violated the First Amendment of the U.S. Constitution and the religion clauses of the Illinois constitution, which includes both a Blaine Amendment and a “compelled support” clause. By the middle of 2000, Illinois appellate courts had upheld the constitutionality of school choice in both cases, under both the state and federal constitutions. Moreover, the Illinois Supreme Court refused to grant an appeal, thus letting the favorable appellate court decision stand.

Regulations on the Program
Parents must provide receipts for educational expenses. The school may not discriminate and must satisfy attendance requirements.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Chapter 35 Section 201(m) of the Illinois Compiled Statutes

IOWA
Tax Credits for Educational Expenses
Enacted 1987, Expanded in 1996 and 1998

Program Description
Iowa provides a tax credit covering educational expenses for students in any private or public school, including tuition, books and lab or activity fees. The credit is worth a maximum of $250. This makes it a little bit easier for families to choose a private school for their children.

Scholarship or Voucher Value
Parents receive a tax credit worth 25 percent of their expenditures, up to a maximum credit of $250 per family. To get the maximum $250 credit, parents must spend $1,000 in educational expenses; they also must have a state tax liability of at least $250 becasuse the credit is non-refundable and thus cannot reduce an individual’s tax burden to less than zero.

Student/School Participation
In 2003, 101,987 families saved about $13.6 million by claiming the tax credit. The maximum value of $250 was claimed by 14,900 families.

Student Eligibility
All students enrolled in accredited non-profit public or private elementary or secondary schools in Iowa are eligible.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Expenses for religious instruction are ineligible for the tax credit; schools may itemize the portion of tuition and other expenses that apply to religious instruction so that parents can claim the tax credit on the remaining expenses. Schools must be non-profit and comply with civil rights laws.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Iowa Code, Section 422.12

Program Description
Many small towns in Maine do not operate local high schools, and some do not operate local elementary schools. Students in these towns are eligible for a voucher to attend public schools in other towns or non-religious private schools, even outside the state. The “sending” towns pay tuition directly to the “receiving” schools. While most towns allow parents to choose which schools will receive their students, some towns send all their students to one school. In 2003-04, 113 towns let parents decide where to send their children, while 33 towns contracted with one school.

Scholarship or Voucher Value
Public schools in Maine have a “tuition rate” that sending towns must pay when their students are tuitioned at public schools. For private schools, sending towns provide a voucher good for up to Maine’s average per-pupil cost for secondary education in the previous year, plus what is known as the Insured Value Factor, an additional payment intended to cover depreciation of private schools’ buildings. Parents may supplement this voucher with their own money. In 2004, the Maximum Allowable Tuition Rate was $7,567, of which $687.90 was the Insured Value Factor. Sending towns have the option of increasing the voucher to as high as 115 percent of the maximum rate, but may not reduce the voucher below that rate.

Student/School Participation
In 2004-05, 13,959 students were tuitioned. Of these, 7,907 (57 percent) were tuitioned at public schools and 6,052 (43 percent) at private schools. Of all tuitioned students, 11,263 (81 percent) are secondary students and 2,696 (19 percent) are elementary. Of all Maine private-school students, 38 percent are tuitioned.

Student Eligibility
Students must live in Maine and reside in an identified sending town that does not have a public school at their grade level. In 2004-05 a total of 58 sending towns tuitioned all their elementary and secondary students, 89 towns tuitioned only their secondary students.

Legal Status of the Program
In 1981, the Maine legislature banned religious schools from participating in the program under the mistaken belief that allowing religious options violated the First Amendment’s Establishment Clause. In 1997, Maine parents and the Institute for Justice filed a lawsuit seeking to overturn this law as unconstitutional religious discrimination. In 1999, the Maine Supreme Judicial Court upheld the exclusion of religious schools. The U.S. Supreme Court declined to review this decision. However, in light of the 2002 U.S. Supreme Court decision upholding the constitutionality of vouchers in Cleveland, the Institute for Justice and Maine families have again asked a Maine court to overturn the 1981 law. The trial court upheld the exclusion of religious options in October 2004. The Maine Supreme Judicial Court heard oral argument in the case in March 2005; as of publication the case was still before the court.

Regulations on the Program
Participating schools must be non-religious and meet state standards for private schools. The eligibility of out-of-state schools is judged on a case-by-case basis. Private schools with large numbers of tuitioned students are required to administer the state test.

Research on the Program
A 2002 Friedman Foundation study by Christopher Hammons found that tuitioning introduces healthy competitive incentives that improve public schools:

• Public high schools closer to tuitioning towns had better test scores than other public high schools, controlling for school spending and student demographics.
  
• The effect is large enough that if a town a mile away from a school decided to tuition its students, we would expect the percentage of students passing the state test at that school to increase by 3.4 points – a gain of 12 percent over existing scores.
  
• If Maine wanted to purchase the same test score gains by increasing per-pupil spending, it would have to spend an extra $909 per student.

Governing Statutes and Amendments
Free High School Act of 1873, Sinclair Act of 1957

Program Description
Minnesota provides a tax credit and a tax deduction covering educational expenses for students in any private or public school. The tax deduction lowers a family’s taxable income; the tax credit reduces the family’s total tax liability. They both cover books, tutors, academic after-school programs and other non-tuition educational expenses. The deduction also includes tuition payments at private schools, while the credit does not. The credit and the deduction make it a little bit easier for families to choose a private school for their children.

Scholarship or Voucher Value
The tax deduction is worth 100 percent of the amount spent on education (including private-school tuition), up to $1,625 per child in grades K-6 and $2,500 per child in grades 7-12. The tax credit is worth 75 percent of the amount spent on educational expenses other than tuition. The total amount that a family may claim is equal to $1,000 per child in the family. Also, the refundable tax credit is phased out for taxpayers earning more than $33,500. For families with one child, the family’s maximum allowable credit is reduced by one dollar for every four dollars of income above $33,500, and the family may not claim the credit at all if family income is above $37,500. For families with two children, the family’s maximum allowable credit is reduced by two dollars for every four dollars of income above $33,500, and again the family may not claim the credit if its income is above $37,500. For families with more than two children, the phase-out is still two dollars for every four dollars of income above $33,500, but the $37,500 income ceiling is raised by $2,000 for each child after the first two. For example, a family with four children may not claim the credit if its income is above $41,500.

Student/School Participation
The Minnesota Department of Revenue estimates that in 2002, about 60,000 families claimed the tax credit and 186,000 families claimed the tax deduction. More recent figures are available for total dollars: families claimed about $16.6 million in tax credits and $13.2 million in tax deductions in 2004.

Student Eligibility
Any parent or guardian who spends money on approved education expenses for a child, including tuition, is eligible to receive the deduction. Parents must meet an income restriction to claim the credit; the income cutoff is $37,500 plus $2,000 for every child in the family after the first two. Also, parents must be tax filers and have proof of eligible expenses.

Legal Status of the Program
In 1983, the U.S. Supreme Court ruled in favor of the tax deduction program. No additional legal challenge is expected.

Regulations on the Program
Expenses for religious instruction are ineligible for both the tax credit and the tax deduction. Schools may itemize the portion of tuition and other expenses that apply to religious instruction so that parents may claim the tax credit on the remaining expenses.

Research on the Program
The Minnesota Department of Revenue projects that in 2007 a total of $19.2 million will be claimed via the tax credit and $15.3 million via the tax deduction.

Governing Statutes and Amendments
Minnesota Statutes, section 290.0674

Program Description
Families who live within the boundaries of the Cleveland Municipal School District are eligible to use a voucher to send their children to private school. The voucher also may be used at public schools bordering the school district, but currently no public schools have chosen to participate. No more than half of new recipients may be students previously enrolled in private schools. In addition, the state gives tutorial grants to public school students for services beyond those provided by public schools.

Scholarship or Voucher Value
The maximum voucher value is $3,450. Families with incomes below 200 percent of the federal poverty level receive scholarships worth 90 percent of tuition, while families above the 200 percent level receive scholarships worth 75 percent of tuition. Parents agree to either pay the remaining tuition or volunteer equivalent hours of service at their child’s school. Children with special needs may receive larger scholarships, based on need. Tutorial grants are worth up to 20 percent of the average basic voucher amount; starting in 2006-07 they will be worth up to $400.

Student/School Participation
5,675 students received vouchers in 2004-05.

Student Eligibility
Children must be in grades K-8 when they first apply for the voucher, an eligibility window recently expanded from K-3; if they fail to apply by eighth grade, they may not enter the program later. Once students are in the program, they may continue to receive the voucher through grade 11 as of 2005-06, and through grade 12 as of 2006-07. They must live within the Cleveland school district. Priority is given to families with incomes below 200 percent of the federal poverty level ($37,700 for a family of four in 2004). Children from families with incomes above 200 percent of poverty are eligible only if funds are available. Participating private schools must accept voucher students on a random basis, giving preference to low-income students if they have more applicants than open seats.

Legal Status of the Program
On June 27, 2002, after years of fighting the case in state and federal courts, the U.S. Supreme Court ruled that the Cleveland voucher program does not violate the First Amendment of the U.S. Constitution. The court ruled that school choice programs are constitutional when they give parents a truly independent choice of schools among a wide array of options without favoring or disfavoring religion.

Regulations on the Program
Participating schools must have classes of at least 10 students each or a total of at least 25 students in the school. They may not discriminate on the basis of race, religion or ethnicity, nor may they advocate hateful or unlawful behavior. The schools must be registered with the state, attain minimal enrollment requirements and meet Ohio’s minimum standards for chartered non-public schools.

Research on the Program
A 1999 study sponsored by Harvard University found that:

• The average income of families receiving scholarships was about $16,000 a year.
  
• Between fall 1996 and spring 1998, students using vouchers to attend the two Hope Schools experienced gains of seven percentile points in reading and 15 percentile points in math.

The program also conducted a state-sponsored annual evaluation through 2002. In some years the evaluation found voucher students had higher test scores than Cleveland school district students, while in other years it found no significant differences.

Governing Statutes and Amendments
Ohio Revised Code, Sections 3313.974-3313.979

Program Description
Ohio students who have autism (including autism-spectrum disorders) may use a voucher to receive education services from a private provider, including tuition at a private school. After participating students receive education services, they apply to the state for reimbursement of expenses.

Scholarship or Voucher Value
Education services of up to $20,000 per year will be reimbursed by the state.

Student/School Participation
There were 270 students and 93 service providers registered with the program in 2004-05.

Student Eligibility
Students must be age 3-21, diagnosed with an autism-spectrum disorder and registered in the public school special-education system. Students may use the voucher whether or not they were previously enrolled in public schools, though students not previously enrolled in public schools must formally transfer into the public system (they do not need to actually leave their private schools).

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Service providers must meet the minimal standards set by professional organizations in their fields, demonstrate fiscal soundness and have at least one staff member with relevant credentials. Schools must have a formal special-education program that has existed for at least a year and that employs teachers with special-education credentials. Also, the voucher pays only for services specified in the student’s Individual Education Plan; it is difficult to determine how restrictive this is in practice without a detailed examination of participants’ plans, but it at least means students must pay the portion of tuition covering any religious instruction.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Ohio Revised Code, Sections 3301.103.1-3301.103.9

OHIO
Educational Choice Scholarship Pilot Program
Enacted 2005, Began Operation 2006-07

Program Description
Starting in 2006-07, Ohio students attending chronically failing public schools will be eligible for vouchers to attend private schools. The number of vouchers is capped at 14,000 for the first year.

Scholarship or Voucher Value
In grades K-8 the voucher will be worth up to $4,250; in grades 9-12 it will be worth up to $5,000. The voucher may not exceed the private school’s actual tuition and fees. Participating schools may charge additional tuition (or require equivalent volunteer hours from parents) for students whose household incomes exceed 200 percent of the federal poverty level, but must accept the voucher as payment in full for students at or below the 200 percent level. This misguided regulation has the unintended effect of forbidding low-income families from expanding their available educational options by supplementing the voucher with their own money, while permitting richer families to do so.

Student/School Participation
Each year the state legislature is to set a cap on the maximum number of participants. For the first year of operation, 2006-07, the cap has been set at 14,000.

Student Eligibility
Students will be eligible if they are assigned to attend public schools that have been designated in a state of “academic emergency” by the state for three consecutive years. Students eligible for the voucher program in Cleveland will not be eligible for this one.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Regulations for this program have not yet been written.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Ohio Revised Code, Sections 3310.01-3310.17

PENNSYLVANIA
Educational Improvement Tax Credit Program
Enacted and Began Operation 2001, Expanded 2003

Program Description
The Educational Improvement Tax Credit Program provides a tax credit on the state’s corporate income tax for contributions to Scholarship Organizations (SOs), which give private-school scholarships to eligible children, or Educational Improvement Organizations (EIOs), which support innovative programs in public schools. A company may claim a tax credit worth 75 percent of its contribution. Alternatively, if it commits to two consecutive annual contributions, it may claim a tax credit worth 90 percent of its contribution. In either case, the maximum tax credit is $200,000 in each year that a donation is made. The total of all tax credits awarded is limited to $44 million annually – $29.3 million for SOs and $14.7 million for EIOs. Credits are awarded to companies on a first-come, first-served basis until the cap is reached.

Scholarship or Voucher Value
Each SO determines the amount of the scholarships it distributes.

Student/School Participation
In 2004-05, more than 25,000 scholarships were awarded by 167 SOs. Since the limit on SO contributions recently was raised from $26.7 million to $29.3 million, it is expected that about 27,400 scholarships will be awarded.

Student Eligibility
Children are eligible for scholarships if their household incomes are under $50,000 plus $10,000 for each child in the family. For example, a family with one child must have an income below $60,000, while a family with three children must have an income below $80,000. Household income does not include items such as disability payments, workers compensation, retirement pensions, public assistance or unemployment compensation. Some SOs have other eligibility criteria.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
SOs and EIOs must be non-profit organizations incorporated in Pennsylvania. An SO must contribute at least 80 percent of its annual tax-credit donations to scholarships and submit annual reports, and it may not restrict its scholarships to a single school (although all of an SO’s scholarships may happen to end up at one school if all the parents decide to use them at that school). Participating schools must satisfy the requirements of Pennsylvania’s compulsory-attendance law and comply with antidiscrimination laws.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Act 4 amended the Pennsylvania Public School Code to establish the program. In December 2003, Act 2003-48 expanded the program.

PENNSYLVANIA
Pre-Kindergarten Tax Credit Program
Enacted 2003, Began Operation 2004

Program Description
The Pre-Kindergarten Tax Credit Program provides a tax credit on the state’s corporate income tax for contributions to Pre-Kindergarten Scholarship Organizations, which give scholarships to eligible three- and four-year-old students to attend a public or private pre-kindergarten program. Companies receive a credit worth 100 percent of the first $10,000 contributed and 90 percent of the next $90,000 contributed. The total size of all tax credits available is limited to $5 million annually. Credits are awarded to companies on a first-come, first-served basis until the cap is reached.

Scholarship or Voucher Value
Each scholarship organization determines the amount of the scholarships it distributes.

Student/School Participation
In 2004-05, scholarships were distributed by 52 scholarship organizations. A total of 152 companies pledged donations of about $3.2 million.

Student Eligibility
Three- and four-year-old children are eligible for scholarships if their household incomes are under $50,000 plus $10,000 for each child in the family. For example, a family with one child must have an income below $60,000, while a family with three children must have an income below $80,000. Household income does not include items such as disability payments, workers compensation, retirement pensions, public assistance or unemployment compensation. Some scholarship organizations have other eligibility criteria.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
The scholarship organizations must be non-profit organizations incorporated in Pennsylvania, must contribute at least 80 percent of their annual tax-credit donations to scholarships and must submit annual reports. They may not restrict their scholarships to a single school (although all of an organization’s scholarships may happen to end up at one school if all the parents decide to use them at that school). The pre-kindergarten program must have a curriculum that aligns with the curriculum of the school with which it is affiliated. It also must provide a minimum of two hours of instructional and developmental activities per day for a minimum of 60 days per school year. The school must comply with antidiscrimination laws.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Act 2003-48, SB 80, PN 1341 amended the Pennsylvania Public School Code to establish the program.

Program Description
Most students with disabilities will be eligible to receive a voucher to attend a private school. Participation will be limited by the amount of money appropriated to fund the program.

Scholarship or Voucher Value
The value of the voucher will be based on the state’s weighted pupil unit, an element of its school financing formula. Students who receive more than three hours of special-education services per day will get vouchers worth 2.5 times the weighted pupil unit, while students receiving fewer than three hours per day will get vouchers worth 1.5 times the weighted pupil unit. In 2005-06 these values will work out to $5,700 and $3,420; the estimated total value of the vouchers to be given out in that year is $640,144. The voucher may not exceed the private school’s actual tuition and fees.

Student/School Participation
It is expected that 138 students will receive vouchers in the program’s first year of operation. So far, 13 private schools have registered to participate in the program.

Student Eligibility
Public school students identified as disabled under federal disability-rights law are eligible to receive the voucher, as well as students with disabilities in private schools that specialize in serving disabled students (so far, six private schools have been recognized as meeting this criterion). Participation in the program will be limited by the amount of money appropriated to fund it each year. Enough funding has been appropriated to cover all the expected participants in the first year.

Legal Status of the Program
No legal challenges have been filed against the program.

Regulations on the Program
Participating schools must hire teachers who have a bachelor’s degree, three years of experience or special qualifications. The schools also must demonstrate fiscal soundness and comply with antidiscrimination law.

Research on the Program
No research has been conducted.

Governing Statutes and Amendments
Utah Code Sections 53A.1a.701-53A.1a.710

Program Description
Many small towns in Vermont do not operate local high schools, and some do not operate local elementary schools. Students in these towns are eligible for a voucher to attend public schools in other towns or non-religious private schools, even outside the state. The “sending” towns pay tuition directly to the “receiving” schools. While most towns allow parents to choose which schools will receive their students, some towns send all their students to one school. In 2004-05 about 6,250 students attended schools chosen by their parents, while about 1,800 attended schools chosen by their towns.

Scholarship or Voucher Value
When students are tuitioned at public schools, the sending town pays the receiving school district an amount equal to the receiving district’s average per-pupil costs, as calculated by the state Department of Education. When students are tuitioned at private schools, the voucher is worth up to the average announced tuition for union schools, calculated each year by the state. This figure is calculated separately for grades K-6, 7-8 and 9-12. For 2005-06 the figures will be $8,155 for grades K-6, $9,000 for grades 7-8 and $8,890 for grades 9-12.

Student/School Participation
In 2004-05, 136 towns tuitioned at least some students. Out of 8,040 tuitioned students, 3,595 (45 percent) were tuitioned at public schools and 4,445 (55 percent) were tuitioned at private schools.

Student Eligibility
Students must live in Vermont and reside in an identified tuition town.

Legal Status of the Program
Vermont has a complex legal history with school choice. In 1961, the Vermont Supreme Court ruled that including religious schools in the program violated the First Amendment but not the state constitution. In 1994, the Vermont Supreme Court overturned this decision, but the Vermont Department of Education refused to allow parents to choose religious schools. In 1999, the Vermont Supreme Court again barred religious schools from participating, this time under the state constitution. In light of the 2002 U.S. Supreme Court decision upholding the constitutionality of vouchers in Cleveland, the Institute for Justice mounted another legal challenge, arguing that barring parents from choosing religious schools is unconstitutional religious discrimination and a violation of the right to free exercise of religion. The Institute for Justice terminated the suit, however, after its clients – in a decision unrelated to the litigation – withdrew their children from religious schools to transfer them to public schools.

Regulations on the Program
Participating schools must be non-religious, obey antidiscrimination laws and meet state standards for private schools.

Research on the Program
A 2002 Friedman Foundation study by Christopher Hammons found that tuitioning introduces healthy competitive incentives that improve public schools:

• Public high schools closer to tuitioning towns had better test scores than other public high schools, controlling for school spending and student demographics.
  
• The effect is large enough that if a town a mile away from a school decided to tuition its students, we would expect the percentage of students passing the state test at that school to increase by 3.4 points – a gain of 12 percent over existing scores.
  
• If Vermont wanted to purchase the same test score gains by increasing per-pupil spending, it would have to spend an extra $909 per student.

Governing Statutes and Amendments
Vermont Constitution, Act 27 (1902), Act 31 (1927)

Program Description
Eligible low-income families in Milwaukee may send their children to a participating private school of their choice within the city of Milwaukee. In 2005-06 the program will hit its enrollment cap of 15 percent of Milwaukee Public Schools’ student population.

Scholarship or Voucher Value
The voucher is worth up to the amount of state funding (but not local funding) for each student in Milwaukee public schools. In 2004-05, the voucher was worth up to $5,943. The voucher may not exceed the private school’s actual tuition and fees. Families may not supplement the voucher with their own money.

Student/School Participation
In 2004-05, 15,035 students used vouchers at 118 private schools. Enrollment in the program is capped at 15 percent of enrollment in Milwaukee’s public schools; it is expected to reach this cap in 2005-06.

Student Eligibility
Students who live in Milwaukee and whose family income does not exceed 175 percent of the federal poverty level ($32,988 for a family of four in 2004-05) are eligible to receive a voucher. When they first apply for the voucher, students must be enrolled in public school, be enrolled in a private school in grades 3 or lower or be entering school for the first time. Participating private schools must accept voucher students at random if they have more applicants than open seats, although preference is given to siblings of current participants.

Legal Status of the Program
The program did not originally include religious schools; when it was expanded to include those schools in 1995, the expansion was challenged in court and a judge issued an injunction barring religious schools from participating. On June 10, 1998, the Wisconsin Supreme Court found that including religious schools did not violate the First Amendment because the program “has a secular purpose” and “will not have the primary effect of advancing religion.” In November 1998 the U.S. Supreme Court refused to hear an appeal.

Regulations on the Program
Participating private schools must accept all eligible students. They also must obey all laws that apply to Wisconsin private schools, follow state accounting standards, file an independent audit, comply with health and safety codes and comply with civil rights laws. In addition, students enrolled at religious schools must be allowed to opt out of religious instruction if they choose. Each school must meet at least one outcome measurements for voucher students: 70 percent advance grades, 90 percent attendance rate, 80 percent demonstrate significant academic progress, or 70 percent meet parent involvement criteria.

Research on the Program
Milwaukee has been studied twice with random-assignment methods, the gold standard for social science. Random assignment compares students randomly selected to receive a voucher with students who applied for the voucher but were not selected, thus providing highly similar “treatment” and “control” groups similar to those in medical trials.

• A 1998 Harvard study found that, after four years of participation, Milwaukee voucher students gained 11 points in math and six points in reading compared to the control group.
  
• A 1998 study by Cecilia Rouse of Princeton found that voucher students outperformed the control group by eight points in math over four years.

In a 2004 study, researcher Jay Greene found that in the graduating class of 2003, private schools participating in the voucher program had a graduation rate of 64 percent, while Milwaukee’s public high schools had a graduation rate of 36 percent.

Research also finds that the Milwaukee program improves public schools:

• In a 2001 study, Caroline Hoxby of Harvard found that public schools more exposed to voucher competition had test score gains over a three-year period that outpaced other public schools by 10 percentile points in math, nine points in language, 16 points in science and eight points in social studies.
  
• A 2003 Manhattan Institute study found that fourth grade test score gains were much bigger in schools in which more students were eligible for vouchers; a school with 100 percent of students eligible would have gains 15 points higher than a school with only 50 percent eligible.

Governing Statutes and Amendments
Wisconsin Statues, Section 119.23