Monday, March 17, 2008

Public money? When did it become public money?

One of the objections to the New Hope Scholarship Program, which provides a tax credit for donations to scholarship-granting organizations, is that it would provide public money to private schools. "In essence what we’re doing is providing people government and public funds that will then be funneled to private education institutions," state Sen. John Sparks (D-Norman) argued March 13 on the Senate floor. "That’s a slippery slope we don’t need to go down."

Actually, we’re not talking about public funds (more on that in a moment). But even if we were, surely Sen. Sparks realizes we’ve gone quite a long way down that slippery slope already. As OCPA research fellow Pat McGuigan pointed out in a recent article, "whether it’s educating toddlers or twenty-somethings, public dollars flow to private schools all the time." Surely Sen. Sparks is familiar with (to name just a handful of examples) public money flowing to private pre-K providers; Title I money flowing to private schools; NCLB’s "supplemental services" dollars flowing to private schools and tutors; taxpayer funds going to private vendors who provide online high-school courses; and Pell Grants, Stafford Loans, OTEG grants, and OHLAP money going to private schools.

In short, public money is "funneled to private education institutions" all the time.

But contrary to Sen. Sparks’ assertion, that’s not what's happening here. As the Arizona Supreme Court ruled (and the U.S. Supreme Court let stand) in 1999:

According to Black’s Law Dictionary, "public money" is "[r]evenue received from federal, state, and local governments from taxes, fees, fines, etc." Black’s Law Dictionary 1005 (6th ed. 1990). As respondents note, however, no money ever enters the state’s control as a result of this tax credit. Nothing is deposited in the state treasury or other accounts under the management or possession of governmental agencies or public officials. Thus, under any common understanding of the words, we are not here dealing with "public money."

Some folks will argue that the government would collect more revenue if the tax credit didn’t exist, and therefore the money that people donate to K-12 scholarship funds is government money. (Heck, for that matter let's just say your entire paycheck is government money; just be thankful benevolent politicians let you keep any of it.) "Under such reasoning all taxpayer income could be viewed as belonging to the state because it is subject to taxation by the legislature," the Arizona Supreme Court ruled. "We cannot say that the legislature has somehow imposed a tax by declining to collect potential revenue from its citizens."

So please, let’s not refer to Oklahomans' charitable contributions as "government funds." For as Sen. Sparks himself so aptly put it, "if we’re going to debate, we need to debate on the facts as they really are."

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