Supported in 1997, Why Not Now Too?

In 1997, Minnesota enacted a K-12 education tax credit as part of a bipartisan compromise. A special session was called to resolve a stalemate over K-12 education funding, resulting in Gov. Arne Carlson and a Democrat-controlled Legislature enacting a new refundable education tax credit for K-12 education-related expenses, showing that lawmakers could come together to pass policy meant to give parents relief and flexibility. (The state teachers’ union, nevertheless, opposed the measure, continuing its pattern of resistance to other similar and important education reform efforts over the years.)

At the time, supporters recognized a simple idea: providing targeted tax relief to families for education-related expenses is not the same as creating a new government program. As a tax credit, it was a tool that Minnesota was able to use in a bipartisan way to help families.

Fast forward to today.

A new federal education tax credit has been enacted with a similar premise — provide tax relief tied to educational expenses such as tutoring or dyslexia support and give families greater control over their child’s educational needs. Critics (including the teachers’ unions) call it problematic, but those who understand how it works, and that it serves students from both public and nonpublic schools, call it common sense.

It is up to state governors to decide whether they believe this, though. Over half have announced their intent to participate in or have already formally enrolled their states, but Minnesota is not yet one of them. The state’s legislators could help encourage this to change.

As I have explained here, the tax credit provision isn’t complicated. A tax credit reduces what someone owes. It doesn’t create a new bureaucracy or new government spending. If that principle was sound in Minnesota in 1997, it is difficult to argue that it is fundamentally unsound today simply because it operates at the federal level.

Some will argue that federal scale makes it different. But scale alone doesn’t change the underlying philosophy. The question is whether we trust families to make decisions about their children’s education or whether we believe those decisions are best directed through centralized systems.

It is also worth noting that tax credits differ from appropriated spending. A tax credit does not create a new agency, hire new administrators, or mandate participation. It reduces tax liability. For those concerned about growing government, that distinction matters.

The details surrounding the income thresholds and accountability standards of the federal provision will also likely be debated. But if Minnesota Democrats once supported education tax credits as a way to help families without expanding state spending, consistency would suggest at least considering a federal credit through the same lens.

And given the spread of students the federal tax-credit provision supports, wouldn’t state leaders want as many of our next generation of students as possible to be ready to contribute meaningfully to society, regardless of where they were educated? Is saying “no” to prevent a small proportion of nonpublic students from having access to the scholarships worth denying the majority of public school students the same opportunity?

At the end of the day, support of or opposition to the tax-credit scholarship program is less about how the provision works and more about philosophy. Do we see education primarily as a system managed from the top down, or as a partnership in which families have meaningful financial flexibility? Do we treat tax relief as inherently suspect, or as a legitimate policy tool?

Minnesota’s 1997 experience shows that Democrats once found room for compromise on these questions. They supported a policy that used the tax code to provide educational flexibility without expanding government bureaucracy. That history does not automatically settle today’s federal debate, one could argue, but if we agreed then that helping families through the tax code was legitimate public policy, we should be willing to evaluate similar efforts today with the same openness.

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Reach out to Gov. Walz and urge him to opt Minnesota in to the new education tax-credit program. This new federal program will have no impact on the state budget and could benefit students in every learning environment in Minnesota. It’s a win-win for families and taxpayers.