New special needs opportunity scholarship FAQ

March 25, 2020

Originally published by UtahPolicy.com.

What is the Special Needs Opportunity Scholarship Program?

The Special Needs Opportunity Scholarship program is a tax credit scholarship program passed during the 2020 Utah Legislative Session that offers educational options for students with special needs.

A tax credit scholarship is a type of educational choice policy that allows students to receive a scholarship made available through the donations of taxpayers who receive tax credits for their donations to scholarship granting organizations.

Students eligible for the Special Needs Opportunity Scholarship receive it from a scholarship granting organization – an entity with an agreement with the Utah State Board of Education – that offers scholarships from the donations of individuals and corporations, which consequently receive a tax credit for their donation.

To be eligible for the scholarship, a student must be a Utah resident, eligible for public schools from kindergarten to grade 12, and have a special need. Special needs can be demonstrated in several ways: an individualized education program (IEP), an individualized family service plan, or determined by a multidisciplinary evaluation team to be eligible for services under the Individuals with Disabilities Education Act.

Scholarships can be used to purchase a range of educational options including textbooks, fees, exams, school tuition, special needs therapies and more.


What is the difference between Utah’s tax credit scholarship and a voucher?

A voucher is another type of educational choice policy that allows students to attend a private school of their choice while the state directly pays for the private school tuition with a “voucher,” almost like a state coupon.

Unlike a tax credit scholarship, with a voucher the state directly cuts a check to the private school of choice for families who are eligible for the program.

Voucher policies can be structured so that they cover partial or full private school tuition costs based on eligibility. Voucher programs can also limit the eligibility to students with specific circumstances – for example, students attending a failing school or students living in low-income households.

Utah offers a voucher for students with special needs called the Carson Smith Scholarship since 2005.

* Note the graphic shows “flexible spending account” but this article refers to an “education savings account.” For this article’s purposes, they are interchangeable. 


Is this tax credit scholarship different than an education savings account?

Yes, a tax credit scholarship can be different than an education savings account, a policy discussed more frequently.

An education savings account is one type of educational choice policy that allows students to spend their dedicated state education funds on a wide range of educational services including private school tuition.

In short, if students are eligible for the program, the funds that the state would have sent to their public school upon enrollment are instead deposited into a parent-controlled account, which can then be used on a variety of educational purchases.

This bill is an education savings account in function, but Utah does not offer a state-funded education savings account program.


Doesn’t Utah already have an education choice program for students with special needs? 

Utah has a longstanding voucher program for special needs students, but not a tax-credit scholarship program with the flexibility of the Special Needs Opportunity Scholarship.

For the past 15 years, Utah has had a voucher program for students with special needs called the Carson Smith Scholarship program. This voucher program, passed in 2005, is administered by the Utah State Board of Education. It has become a popular option for families, currently serving roughly 1,100 students with special needs who want to send their children to a private school that meets their needs. This program requires a yearly allocation from the state Legislature in order to fund it.

However, Utah has not offered students with special needs a tax credit scholarship program until the passage of the Special Needs Opportunity Scholarship a couple of weeks ago. This tax credit scholarship allows families to spend scholarship funds on textbooks, fees, exams, special needs therapies and more in addition to school tuition, depending on the needs of the eligible student. Students with special needs – like all students – vary widely, and finding what works may require access to several options.

This program can grow based on donations, increasing once a threshold is met, rather than being dependent on an appropriation. It offers students with special needs – a group Utah already believes warrants additional options – another path to access new educational options.


Will public education funding decrease because of education choice policies?

Tax credit scholarships are paid for by donations rather than the state directly. However, income tax credits received by taxpayers for making donations to scholarship granting organizations reduce the state’s income tax revenue, which is currently dedicated to public K-12 and higher education. If voters approve a constitutional amendment this fall, income tax revenue may also be spent on non-education expenses for children and individuals with disabilities.

At the same time, even with income tax credits for special needs scholarships, K-12 public school budgets will significantly increase due to the Legislature authorizing historic funding increases in public education this year. The rise in funding for public schools includes a 6% increase in the weighted pupil unit (WPU) and guaranteed yearly funding increases for inflation and student enrollment growth.

In addition, it is at least possible that special needs tax credit scholarships can have financial benefits for public education. As presented in the 2018 Public Education Appropriations Subcommittee, the state’s longstanding special needs voucher program – the Carson Smith Scholarship – has potential for savings to the state because the cost of educating certain students with the scholarship amount can be less than the cost of educating them in public schools.


Do other states have tax credit scholarships programs like Utah’s?

Yes. There are 23 tax credit scholarship programs in 18 states that target certain students.

There are also many other types of education programs available across the country. There are 29 voucher programs across 18 states, including Utah’s Carson Smith Scholarship. There are five education savings account programs – the newest education choice policy – in five states, including Arizona, Florida, Mississippi, North Carolina and Tennessee. Of all these, there are 18 programs designed specifically for students with special needs.

Rather than creating programs with eligibility for all public school children, most education choice programs are aimed at the most vulnerable students in the state, who may require additional schooling options: students living in low-income households, students with special needs, students whose parents are active military personnel, students in failing schools, or students who are in danger due to being bullied.


Are education choice programs constitutional?

In response to constitutional challenges, the U.S. Supreme Court has generally ruled in favor of educational choice programs.

However, some state constitutional language may prohibit public funds from going to religious schools, and individual states continue to have legal battles over education choice programs, especially when their state constitutions contain Blaine Amendments – vestiges of anti-Catholic sentiment after a failed attempt at a federal Blaine Amendment that would have prevented public funds from going to private institutions.

There have been no successful constitutional challenges to Utah’s education choice program, the Carson Smith Scholarship.

There is currently a case before the U.S. Supreme Court that deals with Blaine Amendments called Espinoza v. Montana Department of Revenue.


Does the Special Needs Opportunity Scholarship program have any oversight to protect against misuse or other issues?

Yes. The Utah State Board of Education has significant oversight authority of the Special Needs Opportunity Scholarship program. Part of this oversight includes the opportunity to select a scholarship-granting organization, including creating agreements and reviewing the financial reports of those organizations. Oversight also includes approving which private schools qualify to participate in the program. There are also other opportunities for oversight and review.

With all education choice programs, increased choices give parents the opportunity to try new options as they seek what is best for their children, some of which may have negative or positive outcomes. The idea is to let parents make those decisions rather than limit them when their current option is not working for their student.

More Insights

Connect with Sutherland Institute

Join Our Donor Network