David Michael Miller
The annual tuition for Madison Country Day School in Waunakee is $16,490 for first grade and rises to $17,800 for high school. That’s unaffordable, of course, for most people. Wealthy families choose to pay this because they feel it’s worth it for such a specialized institution.
But beginning with the 2014 tax year, the situation changed, and average taxpayers began to subsidize this separation of wealthy students from the common schools serving most kids. A law supported by Republican legislators and Gov. Scott Walker gives parents of private school students the ability to recoup some of that spending through a tax deduction of up to $10,000 annually for high school tuition and $4,000 for elementary school tuition.
It was one of the most generous such subsidies ever passed by a state, and most of the money goes to the well-to-do. Using data from the Department of Revenue, the Wisconsin State Journal recently reported that the wealthiest 13 percent of taxpayers in the state collected almost $8 million — or 65 percent — of the $12 million in tax deductions awarded.
“A total of 20,560 tax filers making more than $100,000 claimed the exclusion, receiving a tax cut of about $388 per filer,” the newspaper wrote. Another 16,750 filers earning less than $100,000 claimed the deduction, with an average tax cut of $235.
Such tax breaks have been called neo-vouchers by the Institute on Taxation and Economic Policy, a nonpartisan research organization based in Washington, D.C. Rather than awarding money directly to families, as with a traditional voucher, the money comes through a tax credit or deduction. The direct payment of vouchers makes more sense for low-income families who were originally targeted, as they wouldn’t be able to pay the tuition upfront and wait for a tax deduction.
And like vouchers, neo-vouchers help subsidize schools whose teaching may include religious indoctrination, like these two Madison institutions: High Point Christian School, which offers “exemplary academics with a biblical worldview,” including “the study of God’s creation”; and Abundant Life Christian School, whose mission is “Educating the next generation of servant leaders who will impact the world for the Glory of God.”
Wisconsin quietly passed this program as a budget add-on with no study and little discussion, which has become a common pattern under Walker and the Republicans. And Walker, Senate Majority Leader Scott Fitzgerald and Assembly Speaker Robin Vos all declined to comment in response to the State Journal’s story, also pretty common for the state’s leaders.
Back in 2013, Fitzgerald claimed the tax cut would boost private school enrollment, thereby reducing the “huge tax burden” of funding public schools. But if that was the goal, why not target poor and middle-class families discouraged by the price tag for private schools? Why include the well-to-do taxpayers who don’t need the tax write-off to pay for private schools?
The State Journal noted that in the 2014-15 school year, private school enrollment increased for the first time after six straight years of decline, from 119,801 to 123,104, or about 3,300 students, but that enrollment stayed about the same in the 2015-16 school year. Whether the tax handout helped cause that one-year blip in private school enrollment is impossible to say. Certainly Fitzgerald didn’t seem eager to discuss the issue.
State Superintendent of Schools Tony Evers assailed the legislation when it was first proposed, calling it “welfare for the rich” and warning that “it’s taking money out of the system that would normally go to public schools. It’s going to hurt our public schools.”
Evers asked Walker to veto the provision, but the governor declined to do so, without explanation.
State Journal reporter Matthew DeFour recently caught up with Walker, asking the governor whether he might reconsider the tuition tax deduction given the evidence that most of the benefit goes to the state’s wealthiest families.
“That might be an issue of discussion in the future,” Walker replied. As for whether the state should target the benefit only to lower and middle-class families, Walker said, “that very likely will be what some lawmakers consider.”
Walker added that if legislators considered changing to an income-targeting approach and “tied that into then using those dollars to expand the number of low-income families that could then get vouchers...that would be interesting to me.”
The charge of “welfare for the rich” is likely one Walker prefers not to face in his 2018 reelection campaign. His most recent budget was crafted with his reelection in mind, and included a significant increase in funding for public schools. But Republican legislative leaders with safely gerrymandered districts may feel no pressure to end this questionable tax handout. By leaving it up to them to change the program, Walker has given himself a way to sound like he opposes welfare for the rich, while knowing full well the program will continue.
Bruce Murphy is the editor of UrbanMilwaukee.com
