Minnesota school choice advocates prepare for federal tax credit opportunity

NINA MOINI: It's possible this school year is one of the last before a federal program changes the face of public and private schools in Minnesota. President Donald Trump's sprawling budget bill that passed in July included a program that essentially amounts to school vouchers that can be used for private schools. It signals a new era of the school choice movement.

And while legislation like this usually originates in conservative circles, nonprofit advocates and traditionally Democratic-leaning states like Minnesota have a new opportunity to strengthen their movement. Here to explain how the bill could change things for school choice in Minnesota is one such advocate. Ricky Austin is the President of the Aim Higher Foundation in St. Paul. Thanks for joining me in the studio, Ricky.

RICKY AUSTIN: Thanks for having me, Nina.

NINA MOINI: So one of the things you wanted to make sure and talk about is that your mission is not political, right? So many things in our society right now are political talking points. Politics gets in there because funding and passing of legislation, like we're talking about, is inherently political. But tell us a little bit about what the Aim Higher Foundation does.

RICKY AUSTIN: Sure. So it's just a really important point. I think there's really great common ground for the left side and the right side when it comes to education. And the reality is that there are too many children that don't have access to the quality of education that they deserve. And I that's something we can all get behind. Every kid should be able to go to the best learning environment that works for them.

At the Aim Higher Foundation, we're focused on that with one particular sector of the education space. We believe in every school system that's out there, whether it's public, charter, private, faith based. We think kids should be able to access the school that best fits their needs.

And at the Aim Higher Foundation, we're focused on the Twin Cities in particular, of providing tuition assistance scholarships so that more children can attend the 80 Catholic schools that are in the archdiocese of St. Paul and Minneapolis. And that system, with about 30,000 kids, constitutes the fourth largest school district in the state of Minnesota. There are a great number of kids there, and we know that Catholic school is tuition based. And so our goal is to help eliminate the tuition barrier for families that are looking to send their kid there, particularly families from low income, middle income, working class, and immigrant families.

NINA MOINI: How does this tax credit, which isn't a for-certain thing yet in Minnesota-- I just want to make sure to note. But how would that improve or help to improve the work that you're doing?

RICKY AUSTIN: Yeah. So I think the most important thing about this new bill that's created a scholarship tax credit at the federal level is that it really extends the work of the Aim Higher Foundation and other entities that are out there that are looking to make sure that we can align what the best learning environment for a child with the school that fits them and what their family is looking for them.

So the bill creates a tax credit that incentivizes donors to give to a group like the Aim Higher Foundation. We would take those funds, pool them together, and essentially create scholarships for more low-income, working-class, and immigrant families so they could attend the schools. But the real beneficiary in this bill is that more kids are going to be able to be in an environment that best aligns to their family's desires for them.

NINA MOINI: And again, state participation is going to be voluntary. So in a state like this, we have a Democrat as a governor. People have a lot of different opinions about where this should go. And part of the concern, as I'm sure you know, is that if more children are attending private school, where does that leave public schools in terms of disparities, in funding, and resources?

In the last five years or so, since the COVID-19 pandemic, I do wonder if you've seen parents making more of a shift into wanting just more participation. I can think of some friends of mine who I don't think of as highly political but who have decided that they just want more of a voice as a parent in school. So they've gone that route. I think a lot of that maybe started around the pandemic time, in some of the different regulations in schools and restrictions that were going on. What do you think about that? Do you see a change that is less political?

RICKY AUSTIN: Yeah. So there's a couple of important points in there. I think the first is when it comes to the way that this bill is structured, it's really important to know, as we talk about this, called the opt-in conversation. Are state's going to opt in to participate in this bill?

And a really important thing for listeners to understand is that it's not whether donors or taxpayers could opt in. It's whether or not Minnesota opts in for the kids. So you and I and anyone else who's out there that has the ability to make a donation to a qualified scholarship granting organization, they can get that tax credit that this bill creates.

Whether Minnesota opts in or not really determines where those funds are going to go. So I could make a donation to an SGO in Iowa. And then Minnesota money is going to Iowa. The question really at hand for the opt-in is because this bill is the bill of the land-- school choice is the law of the land now-- do we want to keep that money in Minnesota?

The second part that's really important to understand is that these funds that are created, this pooled money that comes from these tax credits, is available to every child, regardless of what kind of system that they attend. So if they go to a private school, this bill will materialize as tuition. If they go to a public school, this bill will materialize as other educational resources-- tutoring, academic enrichment, disability-- excuse me-- funds for students with disabilities.

This bill allows for funds to go to students, regardless of what kind of school system that they're going into. So it really is an additional revenue stream on top of federal education funding, on top of Minnesota funding, and this new set of funding that's here.

To your last question, yes, there is more interest coming out of the pandemic, because families have seen-- the pandemic forced families to see what was happening in their school environment. And some families said, I'm looking for something that's a little bit more aligned with what my family believes. Or I realize that my kid has a different need. And so there's been a lot more interest in customization in school choice, both here in Minnesota and across the country.

NINA MOINI: Are you concerned, though, about some of the impacts of just if there are less children in the public schools that it could end up having a similar result, regardless of if it's private or federal funds that are being moved around?

RICKY AUSTIN: Yeah, I think there's a couple ways to look at that. The first is I think it's important to talk about the number of students who are already in public, private, charter schools, separate from those on the per-pupil public school model, Catholic schools in particular. I can speak to those because that's where Aim Higher Foundation operates.

If those students in Minnesota returned to a public school, if the Catholic schools magically disappeared, Minnesota taxpayers would be on the hook for an additional $1.5 billion in education funding. So another way to say that is Catholic schools are saving the state of Minnesota $1.5 billion.

So there's two kind of coins to this, of it's a complex education system. I think the most important part when it comes to this bill is to think about it as additional revenue. And so, yes, maybe some schools-- or, some-- excuse me-- some students are moving from system to system. But overall, the pot of education funding will be increasing because we're incentivizing donors to get more involved in the education in the country.

NINA MOINI: So moving forward, again, this first ever federal tax credit for private school choice does put organizations like yours more in the spotlight. Are you going to be doing advocacy at the Capitol? How are you going to be working to ensure that this is something that Minnesota does opt into?

RICKY AUSTIN: I think first and foremost, we got a little bit of a runway to think about this. So this bill doesn't go into effect until 2027. I think the second thing we need to be looking at is there's a lot of rulemaking that still needs to happen. And I think when or how states opt in, there's a lot more for us to learn about that. When it comes to the Aim Higher Foundation, we obviously already believe in the family's right to choose the best education for their children.

And so, of course, we want to be involved in these conversations. But first and foremost, from a position of just stating the facts, this bill is complicated. School choice has a lot of different voices in it. There's obviously the voucher school choice system. There's the education savings account.

And then this is a very different program. This is a tax credit that is available to every child, regardless of what kind of public-- or what kind of school system they're in-- public, charter, or private. And so we're going to be part of those conversations. We're looking for coalition partners in each of those sectors and to say, Minnesota, let's keep Minnesota's generosity here in the state and incentivize those donors to create that funding pool for kids and their future.

NINA MOINI: Well, Ricky, I thank you so much for stopping by Minnesota Now and sharing your perspective. And as this continues to unfold, we hope you'll come back.

RICKY AUSTIN: Thank you so much.

NINA MOINI: Thank you. That was Ricky Austin, President of the Aim Higher Foundation in St. Paul.