Georgia Public Policy Foundation: Study Finds Fiscal, Economic Benefits in Georgia Tax Credit Scholarships
Tuesday, December 1st, 2020
Georgia’s tax credit scholarship program saves state taxpayers millions of dollars and enhances educational attainment among scholarship students, according to a study released today by the Education Economics Center at Kennesaw State University and the Georgia Public Policy Foundation.
Georgia’s Legislature enacted the Qualified Education Expense (QEE) Tax Credit Scholarship Program in 2008. Taxpayers receive a state income tax credit when they donate to nonprofit student scholarship organizations (SSOs), which provide scholarships that allow students to attend a private school of their family’s choice.
Georgia law that expanded the program in 2018 included a requirement that the state auditor study its “fiscal” and “economic” effects by 2023. The KSU study, which provides a first look at the program’s impact, is co-authored by Ben Scafidi, director of the Education Economics Center and a Senior Fellow with the Georgia Public Policy Foundation, and Heidi Holmes Erickson, visiting professor of economics at KSU.
If these scholarship students would have attended public schools, federal, state and local taxpayers would have covered the full cost of their education. Instead, the average taxpayer cost per scholarship was $3,713 per student – significantly less than the $5,717 state average per pupil expenditures in public schools, and less than one-third of the total expenditures per public school student, $12,796.
In 2018, 13,895 students received a scholarship through the program. Assuming 90% would have enrolled in public schools had these scholarships not been available ( a ratio found in similar programs around the nation), the analysis found it would have cost almost $105 million to educate those students in public schools. Instead, the education of all 13,895 scholarship students cost the state $51.6 million, a savings of $53.2 million. Of these total savings, $19.9 million were savings for state taxpayers and $33.3 million were savings for local taxpayers.
“With the average cost of a scholarship about a third of the average cost of educating a student in a Georgia public school, the fiscal savings to Georgia taxpayers are significant,” Scafidi pointed out.
The authors estimated the “economic” effects by comparing high school graduation and college entrance rates between scholarship students and students in Georgia public schools. Data on students who received a scholarship from the state’s largest SSO, Georgia GOAL, show that 99% of GOAL students graduate from high school, compared to 82% of public school students.
"Students with higher education attainment are more likely to live a longer and more economically productive life,” noted co-author Holmes Erickson.
“GOAL scholarship students graduate high school and report entering college at a higher rate than students in Georgia public schools. And low-income scholarship students outperform their public school peers as well.”
Eighty-seven percent of GOAL students enter college, compared to 68% of public school students. Scholarship students who qualify for free or reduced-price lunch (one measure of economic disadvantage) outperform their public school peers 98% to 77% in high school graduation, and 84% enter college compared to 58% of their public school peers.
If students receiving scholarships from other SSOs graduate high school and enroll in college at a similar rate as GOAL students, Georgians would experience an economic benefit of $66.4 million from the scholarship students who entered ninth grade in 2018, the analysis found.
“We have witnessed the profound, positive effects of this program on the educational well-being of Georgia students and their families,” said Lisa Kelly, executive director of Georgia GOAL. “We’re delighted to observe the significant positive effects on the fiscal and economic well-being of our great state as well.”
“The academic performance revealed in this analysis reinforces state legislators’ wisdom in implementing and then expanding this education option for Georgia families,” said Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation.
“That the research highlights significant taxpayer benefits as well is icing on the cake. More Georgia families deserve the ability to make the best possible decisions for their child’s education, and these contributions by willing taxpayers are a strong signal that Georgians want this, too,” Wingfield added.