Federal Tax Credits Offer New Funding. Will Delaware Schools Be Ready?

In August, Marguerite Roza of Georgetown University's Edunomics Lab outlined steps education leaders could take to prepare for federal tax credit scholarships for public school students. With only two months left before the December 31 opt-in deadline, I worry that Delaware students will miss out.

Education Reform Now estimates that nearly $86 million could be raised annually in Delaware if 15 percent of taxpayers donate the maximum tax credit ($1,700 per person or $3,400 per married couple filing jointly). But reaching that level of participation will take time. In the first year, participation may be closer to 2 to 3 percent as more taxpayers learn about the program and its benefits.

Delaware will need a sustained statewide effort to attract donations. Public schools also need to learn how to accept and manage scholarships for eligible educational expenses. It’s worth the effort because these scholarships could make a real difference for students who need extra help.

Yet statewide media coverage of this opportunity has been almost nonexistent. I don't know whether state leaders are discussing this behind the scenes. In my outreach, I've found that uncertainty about whether the state will opt in has left many people in the dark or waiting to see what happens. Once a decision is made, there will be little time to get everyone moving.

Delaware needs to start preparing now

Many groups have a role to play to get ready. For example:

• District and school board leaders: Learn how the program could help their students and how to work with SGOs.

• Major employers: Enable employee donations through payroll deductions.

• Scholarship Granting Organizations (SGOs): Set up state operations.

• Advocates: Run public awareness campaigns to build awareness and participation.

• Parents: Information about how to apply for scholarships for their children.

Statewide media coverage of this opportunity is practically nonexistent. Yet, we've seen extensive coverage in Delaware about the new education funding formula, which depends on more state taxpayer dollars. News outlets also reported that all five New Castle County school districts plan to raise local school taxes later this year. They say the increases are needed to cover the rising costs of serving more special education students.

By comparison, tax credit scholarships offer a new source of private funding for public education at no additional cost to taxpayers. It's difficult to overlook these funds while asking taxpayers for more state and local dollars. And remember: these are private donations, not public dollars. The money goes directly to scholarship organizations rather than into the Treasury.

With so many school districts facing financial pressures, isn't the Federal Scholarship Tax Credit worth serious attention?