School choice advocates have worked for years to bring more education options to Kentucky students and families. But their successes have not come without setbacks. In 2017, the General Assembly approved legislation to allow charter schools in the commonwealth. But lawmakers have yet to provide a funding mechanism for charters.
Earlier this year, the legislature approved a tax credit for individuals who donate to non-profit organizations that will provide scholarships to needy students in certain counties to attend a private school of their choice.
But in early October, Franklin Circuit Court Judge Phillip Shepherd declared that portion of House Bill 563 unconstitutional, saying it would in essence divert public dollars to private education. Other aspects of the legislation, including a provision to make it easier for students to attend a school outside of their district of residence and one-year funding for all-day kindergarten, will remain in place.
Public school advocates applauded Shepherd’s decision, while school choice proponents vowed to appeal the ruling to the Kentucky Supreme Court.
“There’s insufficient evidence that scholarshipping kids in to private schools increases academic outcomes. In fact, there’s research that shows that it can negatively impact education outcomes,” says Brigitte Blom, president and CEO of the Prichard Committee for Academic Excellence. “So for the public dollar, this is a bad investment and it’s bad public policy.”
“We know that the program is constitutional – we know it’s constitutional because similar programs have been upheld across the country over the last 20 years,” says Andrew Vandiver, president of EdChoice Kentucky. “For that reason, I’m confident that the Kentucky Supreme Court will ultimately uphold the program.”
The Crux of the Constitutional Question
House Bill 563 calls for an annual $25 million tax credit for individuals who donate funds to education opportunity accounts (EOAs) that can be used by qualifying students to help pay for public school expenses, tutoring services, or online courses and specialized career training. Scholarship students living in counties with a population greater than 90,000 can also use EOA funds to pay tuitions to attend private schools.
While most charitable donations entitle the donor to a tax deduction, which reduces the donor’s taxable income, the tax credit created by HB 563 reduces the donor’s tax liability in a nearly dollar for dollar exchange. Opponents argue that means the state won’t collect up to $25 million a year that could have gone to public education, and instead gives that money to families who may use it for private education. (The legislation places an initial five-year cap on the program.)
“The only thing that we are opposed to is using public school funds for private purposes because that is strictly forbidden by our constitution,” says Tom Shelton, spokesman for the Council for Better Education, the organization that brought suit against HB 563. “Section 183 of the [Kentucky] Constitution says that it’s the responsibility of the state to provide for an efficient set of common schools, which is the public school system.”
Kentucky is the 28th state to enact a school choice law like this, and Vandiver says the tax scholarship provisions have been upheld as constitutional by state courts in every other state, except Montana. That case went to the U.S. Supreme Court, which Vandiver says ultimately ruled in favor of the tax credit provision.
“You’re talking about a perfect legal record when it comes to these types of programs,” says Vandiver. “This is not public dollars, these are private donations and the idea that this is public money is so ridiculous.”
Tax credit proponents also argue that public school students can use EOA money for things they need, so the program still doesn’t harm public education endeavors. Bluegrass Institute for Public Policy Solutions President and CEO Jim Waters says if opponents are worried about the annual $25 million that is set aside, they should be even more concerned about the much larger tax credits the state already offers.
“This is a tiny program compared to many of the tax credits we have in Kentucky,” he says. “This year the legislature brought back a $75 million film tax credit. We’re hearing nothing about that from… those who oppose school choice.”
Waters says that means the issue is really over who gets to control how the money is spent.
Shelton and Blom say their concerns about the scholarship tax credit go beyond the potential of funneling state money to private school operators. They also argue there’s insufficient accountability over the non-profits that disburse EOA funds to selected students, and that there’s scant evidence that sending a child to a private school will result in an improved academic outcome.
“What assurance does a parent have that a private school education…is actually going to provide for their child a better education?” says Blom.
School choice advocates counter that multiple studies show that students who participate in these programs have better high school graduation rates and are more likely to attend and graduate from college. They argue the increased competition forces struggling public schools to improve.
“The impact on public school student test scores, there’s been 27 total studies on that, 25 showed a positive outcome for public school students,” says Vandiver. “When you look at Florida’s scholarship tax credit program, they had a noticeable increase in the number of kids going to college and graduating from college.”.
The Perspectives of a Parents and a Teacher
Polling indicates that Black parents are among the strongest supporters of school choice, according to Vandiver. Some seek a safer learning environment for their children, and others want better academic opportunities.
School choice advocate Akia McNeary of Boone County has sought both for her children. Although she says one child thrives in public school, McNeary says she has opted to move two sons to local private schools, one because of a bullying incident, and one so he could receive better instruction.
“I felt that there was a need definitely in my community where our current elementary school and middle school are not proficient and distinguished in reading and math,” she says. “That means a majority of the students that come out of our school district are not able to read or write or do math at grade level.”
Beyond helping McNeary pay the private school tuitions, she says an EOA could help her family offset transportation costs and afford dual-credit courses so one son can earn college credits while still in high school.
While individual families could benefit from the tax credit program, public school officials are still concerned about what it could mean for their funding. The Frankfort Independent and Warren County school districts joined the Council for Better Education in the lawsuit challenging the constitutionality of the program. Kentucky Education Commissioner Jason Glass encouraged Gov. Andy Beshear to veto HB 563, which he did. (Lawmakers overruled that veto.) Glass also told KET in March of this year that if private schools get public funds, they should have to abide by the same standards and regulations.
Madison County elementary school teacher Stephanie Winkler says all educators want children to have access to a free, quality public education. She describes the scholarship tax credits as “a slippery slope” that will result in public funds going into private hands. She contends the school choice debate is distracting from efforts to truly improve education.
“We just have too much of fighting for one group or another instead of fighting for what counts and that’s kids,” says Winkler, who was president of the Kentucky Education Association from 2013 - 2019. “Until everyone is truly fighting for that, we will never accomplish the goals that we want to accomplish.”
A Continued Battle over School Funding
Protecting and increasing public school funding has been a core concern of the Council for Better Education since its founding in 1984. The organization brought the original lawsuit that eventually led to a landmark court decision that declared Kentucky’s public school system unconstitutional because of inadequate and unequal funding among school districts.
The council’s Tom Shelton sees the scholarship tax credit program as a new threat to public school funding.
“We have always been advocates for additional revenue, less tax credits so that there’s more money available for education because we are woefully underfunded in our public schools,” says Shelton.
School funding has increased since the Kentucky Education Reform Act of 1990. Waters quotes a University of Kentucky study that indicates education spending in the commonwealth adjusted for inflation increased 80 percent between 1990 and 2019. In the last 20 years, he says Kentucky has boosted its school funding rate more than the state of Massachusetts, which he says is one of the best systems of public education in the country.
At the same time though, Waters says academic performance has not kept pace.
“Only 14 percent of our black students can read proficiently in Kentucky. One in three white students can. What has all this spending gotten us?” Waters says.
Shelton says Kentucky needed to increase spending on education since it had been so low historically. As for the increases in recent decades, he says the bulk of that has come locally through county property taxes. When adjusted for inflation, Shelton says, the state appropriation has actually gone down. He says without more money funneling in to public education, school districts will continue to struggle.
Vandiver says school choice advocates like him want to implement a different philosophy for education funding.
“Kentuckians want to see a student-focused education platform,” says Vandiver. “They want to see policies that fund students not systems.”
As that debate plays out, questions remain about whether scholarship tax credits and education opportunity accounts will help move Kentucky towards the goal of improved student performance.
“This is not a solution that is going to increase academic outcomes overall,” says Blom. “Things that will are things like investing in the quality of teaching and learning in the classroom.”
