Working-class families benefit from Oklahoma school-choice program

Ray Carter | January 4, 2024

Data collected by the Oklahoma Tax Commission show that nearly half of Oklahoma families that have applied for the state’s new private-school tax credit are from lower-income or middle-class backgrounds, defying critics’ portrayal of private-school students.

And because the tax credit program took effect in the middle of the school year, the share of children from lower-income families is expected to increase next fall as more children have the chance to shift to private schools since the program removes financial obstacles for those families.

Moreover, Oklahoma Tax Commission figures show that private-school tuition has often been substantially less than the per-pupil funding provided to Oklahoma’s public schools, so much so that many families can fully pay for tuition without expending their full tax credit.

House Bill 1934 created the Oklahoma Parental Choice Tax Credit Act. The new law provides refundable tax credits of $5,000 to $7,500 per child to cover the cost of private school tuition starting in January 2024.

Families earning up to $75,000 can receive a $7,500 per-child refundable tax credit with the credit provided in two semester installments, while those earning $75,001 to $150,000 get a credit of $7,000 per child.

Those two brackets are considered priority families who are to be served first in the program before other families with higher incomes.

The tax credit gradually declines as income increases with the final tier providing a $5,000 credit for those earning $250,001 or more.

The Oklahoma Tax Commission began accepting applications for the program on Dec. 6. As of the start of January, the commission reports that applications for more than 30,000 children have been received.

Of that total, approximately 45 percent of applications (or roughly 13,500 children) came from families with adjusted gross income of $150,000 or less that fall in the two priority categories.

That defies the predictions of critics.

When House lawmakers took up an early version of the school-choice tax-credit program that was contained in House Bill 1935 on Feb. 22, 2023, critics argued the program would be a boon for the wealthy and would not benefit lower-income or working-class families.

“It carves out choice for poor kids,” declared state Rep. Melissa Provenzano, D-Tulsa. “Granted, do we have a success story or two? Yes. But that is the exception to the rule.”

Instead, Tax Commission figures show those children are not the exception, but instead indicate that children from working-class families may constitute a near-majority of those seeking a private-school education in Oklahoma.

The thousands of families in the two priority categories are not living lives of idle wealth, contrary to the picture often painted by opponents of school choice.

For example, according to estimates released earlier this year by the National Education Association, the average salary for an Oklahoma teacher in the 2022-2023 school year was $55,541.

That means a two-parent household in which both parents have incomes equal to the average Oklahoma public-school teacher would qualify for the $7,000 per-child tax credit but have incomes that exceed the threshold for the $7,500 credit.

The roughly 13,500 applicants received so far from working-class and lower-income families would comprise the state’s 13th-largest school district out of more than 500 in Oklahoma, based on district enrollment figures for the ongoing 2023-2024 school year.

The roughly 30,000 total applications received to date would comprise the state’s third-largest school district, narrowly trailing only Oklahoma City (33,572 students) and Tulsa (32,920).

Of the 13,500 applications for students within the two priority categories, approximately 11,600 priority applications have already been approved for a total of approximately $70 million in total credits.

That means those working-class families have received an average credit of $6,035 per child even though they qualified for credits of $7,000 and $7,500 apiece. The lower credit has been provided because tuition at many private schools has been less than $7,500.

If those same children were attending public schools, taxpayers would be spending more than twice that amount to educate the same children if current per-pupil spending levels were maintained.

According to Oklahoma State Department of Education data, public-school district expenditures in 2023 totaled $9,538,453,992.67 when student enrollment was 701,066, meaning the per-student expenditure was $13,605 that year, the most recent for which full data is available.

However, the state budget approved during the 2023 legislative session hiked state public-school spending in the current 2023-2024 school year by roughly $1,000 more per pupil, according to the Oklahoma State School Boards Association, and annual increases in local property-tax collections and federal school funding are also the norm.

As a result, per-pupil spending in Oklahoma public schools is likely above $14,000.

By providing an average of $6,035 in tax credits per child to educate those 11,600 priority-application students in private schools rather than spending $14,000 per child to educate the same children in public schools, the Oklahoma Parental Choice Tax Credit Act has effectively reduced state taxpayer costs by $92.3 million annually.

Millions more in effective savings will also be accrued from the remaining students whose families have applied for the credit.

However, it is not certain that all families who apply for the credit will receive it due to a cap on the program.

In 2024, the Oklahoma Parental Choice Tax Credit program is capped at $150 million in tax credits. In 2025, the cap will increase to $200 million, and in 2026 the cap rises to $250 million.

Because demand for the credit has already exceeded what many expected, and because the number of applications is expected to increase as the program makes private school feasible for more families next fall, House Speaker Charles McCall, R-Atoka, has already said his chamber is prepared to raise the cap to $250 million.

The Oklahoma Tax Commission continues to accept applications for the Oklahoma Parental Choice Tax Credit program. Families with incomes in the priority categories must apply by Feb. 5 to secure their credit.

[NOTE: This story has been updated since publication to include recently released information on 2023's per-pupil funding in public schools.]

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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