Watchdog RI: “Rhode Island’s tax credit scholarship grade is largely for showing up to class”

By Justin Katz
October 7, 2015
With the release of the Center for Education Reform’s 2015 scorecard for states’ school choice tax credit scholarships, Rhode Islanders with knowledge of the program might wonder how their state managed to squeak out a C grade. The program comes nowhere near satisfying demand–among donors or recipients–and during budget battles, it can seem more like a trading chip legislators throw to a particular constituency.

But with so many states playing tax credit scholarship hooky, Rhode Island is getting credit for trying.

With $931,250 worth of tax credits available for the fiscal year beginning July 1, 2015, 75 businesses applied to give private-school scholarships to disadvantaged children through Rhode Island’s tax credit scholarship program. On July 20, the state Division of Taxation held a lottery, and the applications of just 23 of those businesses were approved.

Last year, $1.7 million in donations through the program funded scholarships for 411 Rhode Island students with low income or developmental challenges to attend 48 schools. That total includes donations carried over from the prior year, as well as those that take advantage of an opportunity for businesses to commit to two years of donations in order to skip the lottery the second year. The 2014 lottery only distributed $643,750 in tax credits to 17 businesses.

Donors aren’t the only ones who would like the program extended; demand for more school choice among parents is high by multiple measures. More than 53-percent of Rhode Island parents would choose private schools for their children “to obtain the best education,” if they could. Yet, only around 12 percent of all students attend such schools, based on research performed for the RI Center for Freedom & Prosperity.

Data provided by the Roman Catholic Diocese of Providence is instructive. The 41Catholic schools in Rhode Island (not all of them directly run by the diocese) account for the largest portion of the private school sector by far, with around 71 percent of all private-school students.

FACTS Management Company, which handles financing for local Catholic schools, estimates that Rhode Island families need financial aid for 53 percent of the $44 million in total tuition for all Catholic schools in the state, and the diocese is only able to provide about four percent. The rest has to be made up through tuition forgiveness from the schools or money provided by individual parishes or private organizations. As a measurement of demand, these figures don’t include families that might not even bother applying because they believe private school tuition is out of reach.

Yet, fewer than 2 percent of all Catholic school students receive any funds from the scholarship granting organization (SGO) participating in the tax credit program on their behalf. Their average scholarship was $2,348 in 2014, well below the listed tuition at any school and a mere fraction of the $16,075 that the state estimates public schoolsspent per pupil during the 2013-2014 school year.

As inadequate as the funding may be, however, the tax credit program is closely watched during the legislative session each year. In a state whose economy continues to struggle, a program that helps to add an average of nine children to each of the participating schools can’t be dismissed.

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