Right now, 16 U.S. states have tax credit scholarship programs. South Dakota could soon be the 17th.

The state Legislature this week approved a bill that would give insurance companies 80 percent tax credits if they donated money to scholarship funds, which could help low-income and working class students attend private schools.

The school choice program would start small, with just $2 million in tax credits available. If donations maxed out, that would yeild $2.5 million in scholarships, or enough to pay private-school tuition for about 1,000 students. (There are fewer than 150,000 total K-12 students in South Dakota.)

According to an analysis by the Friedman Foundation for Educational Choice, the average tuition at Catholic Schools in Souix Falls is less than $2,500. That means a relatively small amount of scholarship money could serve more students than it would in other states. It also means the program could yield big savings for public schools.

A legislative fiscal analysis finds that SB 159, if approved by Gov. Dennis Daugaard, could save taxpayers more than $1.7 million, assuming the maximum number of students receive scholarships.

Yet the Argus Leader reports the proposal has been dogged by some of the typical public-school funding rhetoric that dogs new private school choice programs. (more…)