Washington D.C. – A new analysis by the America First Policy Institute (AFPI) reveals that states declining to participate in the Education Freedom Tax Credit (EFTC) could lose out on nearly $23 billion in education funding over the next three years, raising concerns about equity and access to quality education. The AFPI's interactive Funding Loss Calculator underscores the potential consequences for states already grappling with underfunded public school systems.

The EFTC, which allows taxpayers to receive up to $1,700 in federal tax credits for donations to scholarship-granting organizations, disproportionately benefits wealthier families who can afford private school tuition and related expenses. Critics argue that this effectively diverts resources away from public schools, which serve a broader range of students, including those from low-income backgrounds and students with disabilities.

The premise behind the EFTC is that private donations will fill the gap in funding, but this model is unreliable and lacks the accountability of public funding mechanisms. Relying on charitable contributions to fund education creates a system where some students benefit from generous donors while others are left behind, exacerbating existing inequalities.

According to AFPI, 28 governors have opted into the program. Erika Donalds, chair of educational opportunity at AFPI, argues that the program provides resources beyond private school tuition, including support for homeschooling, curriculum assistance, tutoring, special needs services, and dual enrollment, funded by private donations.

However, the potential loss of $23 billion in education funding raises serious questions about the long-term impact on public schools. As resources are diverted to private institutions, public schools may face further budget cuts, leading to larger class sizes, fewer resources, and lower teacher salaries. This could create a two-tiered system where wealthier students have access to better educational opportunities while disadvantaged students are left behind.

Moreover, the EFTC does not address the underlying issues that plague public schools, such as inadequate funding, systemic inequities, and the achievement gap between different student populations. Instead of focusing on tax credits that primarily benefit the wealthy, policymakers should prioritize investing in public education and addressing the root causes of educational disparities.

Research has consistently shown that investing in public education yields significant economic and social benefits. High-quality public schools are essential for creating a skilled workforce, promoting economic growth, and fostering civic engagement. By diverting resources away from public education, programs like the EFTC undermine these goals and perpetuate cycles of poverty and inequality.

The interactive tool launched by AFPI allows users to model different participation rates and view projected losses on a state-by-state basis. While this tool may highlight the potential financial consequences of opting out of the EFTC, it fails to address the broader social and economic implications of diverting resources away from public education.

Instead of relying on tax credits and private donations to fund education, policymakers should prioritize equitable funding models that ensure all students have access to high-quality public schools. This includes increasing funding for schools in low-income communities, providing resources for students with disabilities, and investing in teacher training and professional development.

The potential loss of billions in education funding underscores the need for a comprehensive and equitable approach to education policy. Programs like the EFTC may offer short-term benefits to some students, but they ultimately undermine the long-term health and vitality of the public education system. A commitment to investing in public education is essential for creating a more just and equitable society.

Ultimately, education is a public good that benefits all members of society. It is the responsibility of policymakers to ensure that all students have access to the resources and opportunities they need to succeed, regardless of their socioeconomic background. The Education Freedom Tax Credit falls short of this goal and perpetuates a system where some students are left behind.