Why it is wrong and misleading to call FL’s tax credit scholarship a “voucher”

Jon East

Teacher unions have sufficiently tarnished the word “voucher” in the public education arena that they insist on using it even when it is wrong. But the legal fight now underway in Florida over a “tax credit scholarship” should help clarify the difference.

Indeed, it could decide the case.

The distinction is straightforward. Merriam-Webster defines a voucher as “a coupon issued by government to a parent or guardian to be used to fund a child’s education in either a public or private school.” A tax credit scholarship, on the other hand, comes from tax-credited contributions made by private companies to a private nonprofit organization that in turn hands out the money. In short, one is a check from the government, the other from a private organization.

Not surprisingly, when the Florida Education Association and Florida School Boards Association announced their constitutional challenge to the Tax Credit Scholarship on Aug. 28, their press release used the word “voucher” 21 times. The formal complaint used it 45 times. But the FEA is using “voucher” not because it is correct but because it feeds a legal strategy. The FEA wants the courts to see the scholarship as no different than the government-issued voucher program the Florida Supreme Court ruled unconstitutional in 2006. Though it acknowledged in its filing that the scholarship “relies on a different (funding) mechanism,” it wants the program to be treated the same nonetheless.

That may be a smart legal tactic, but it doesn’t change the meaning of “voucher.” It also doesn’t change the separate constitutional case law that has emerged around tax credit scholarships. Though some state supreme courts, including Florida’s, have ruled that school vouchers violate their constitutions, none has ruled against tax credit scholarships.

In fact, the same day the FEA filed its suit, the New Hampshire Supreme Court rejected a constitutional challenge to that state’s Education Tax Credit Program. The court said the plaintiffs lacked standing because their claims of lost funding to public schools were merely “speculative” due in part to the fact that the money was not withdrawn from the treasury.

Though the New Hampshire ruling is timely, the Arizona courts provide a better comparison. That’s because the Arizona Supreme Court ruled in 2009 that a government-issued voucher for special-needs students and foster children was unconstitutional. But the same Supreme Court also ruled in a previous case, called Kotterman v. Killian, in favor of a tax credit scholarship.

In its 2009 decision, the Arizona court explained why it reached different conclusions: “Because the funds in Kotterman were credits against tax liability, not withdrawals from the state treasury, the funds were never in the state’s treasury; therefore, the credits did not constitute an appropriation. Unlike the funds in Kotterman, the funds at issue here are withdrawn from the public treasury and earmarked for an identified purpose.”

Even more important, the U.S. Supreme Court has weighed in.

In a 2011 case, Arizona Christian School Tuition Organization v. Winn, it rejected a federal challenge to the Arizona Tax Credit Scholarship by ruling that the tax-credited contributions were not the same as government expenditures even if the tax credits were 100 percent.

Wrote Justice Anthony Kennedy for the majority: “Like contributions that lead to charitable tax deductions, contributions yielding (scholarship organization) tax credits are not owed to the state and, in fact, pass directly from taxpayers to private organizations. … When Arizona taxpayers choose to contribute to (scholarship organizations), they spend their own money, not money the State has collected from respondents or from other taxpayers.” The court therefore denied standing.

The new Florida case, McCall v. Scott, will likely take years to play out, and it would be unwise to predict the grounds on which the courts will base their decisions. But words have meaning, and the scholarships serving 69,000 of Florida’s most economically disadvantaged schoolchildren are not vouchers.

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1 comment

Doug Tuthill November 3, 2014 - 3:07 pm

Jon, Milton and Rose Friedman introduced the notion of K-12 education vouchers in the 1970s through their book, Free to Choose. Below is a quote from that book describing school vouchers. You’ll note the Friedmans’ definition of “vouchers” includes within district school choice, which means magnet schools are voucher programs. Here’s the quote:

“The voucher plan embodies exactly the same principle as the GI bills that provide for educational benefits to military veterans. The veteran gets a voucher good only for educational expense and he is completely free to choose the school at which he uses it, provided that it satisfies certain standards. Parents could, and should, be permitted to use the vouchers not only at private schools but also at other public schools…The public schools would then have to compete both with one another and with private schools.”

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