Author(s): Jason Bedrick — Publication date: 2012-03-15 Category: Education Abstract: Since 2007, Rhode Island’s corporate scholarship tax credit (CSTC) program has helped hundreds of students from low-income families attend schools that they could not otherwise attend; schools that fit their individual educational needs. The CSTC program grants tax credits to corporations that donate to non-profit scholarship-granting organizations (SGOs). The SGOs then grant scholarships to eligible Rhode Island students from low-income families. The first SGO created under the CSTC program was the Foundation for Rhode Island Day Schools, which awards scholarships to students from low-income families attending Providence Hebrew Day School (PHDS) and the Jewish Community Day School (JCDS). This paper explores the experience of the Foundation and these two schools under the CSTC program. With the aid of the Foundation and its corporate donors, low-income students at PHDS and JCDS receive both the religious education that their parents desire and a strong secular education. Students at both schools score considerably above the state averages on the New England Common Assessment Program (NECAP) exams, often achieving 100 percent proficiency in math and reading school-wide. The CSTC program also has several limitations, including its inflexible means-testing, restrictive credit cap, and lottery system. Accordingly, this paper recommends that any state considering a CSTC program should: 1) adopt flexible means-testing requirements to ensure that aid is targeted to those who need it without excluding families facing exigent circumstances; 2) allow any cap on the amount of tax credits issued to rise to meet demand; and 3) ensure a stable source of funding for scholarship organizations by avoiding credit lotteries and giving priority to previous donors. Adopting these policies would result in a more consistent and fiscally stable program that aids a greater number of financially struggling families.

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5101March 14, 2012March 14, 2012