Last reviewed August 2023

Minnesota Issue Guide
Educational Vouchers

This guide is compiled by staff at the Minnesota Legislative Reference Library on a topic of interest to state legislators. It introduces the topic and points to sources for further research. It is not intended to be exhaustive.

Legislative History • Books and Reports • Articles • Internet Resources • Additional Library Resources

The introduction of the modern concept of education vouchers in the United States is usually attributed to the economist Milton Friedman in his 1955 essay, "The Role of Government in Education". Theoretically, in a voucher program, the state issues parents a voucher equal to the state's cost of educating a child for a year and the parents choose the school their child attends, whether public or private. The reality is quite different. Vouchers are often restricted to targeted populations such as those who live in specific cities, children living in poverty, or students with special needs. And state voucher programs often help with costs rather than cover all educational expenses. There are different types of programs that are often lumped under the general category of vouchers including education savings accounts, scholarship tax credits, and state education income tax credits and deductions.

The Town Tuitioning Programs in Vermont and Maine are the oldest voucher programs in the U.S., dating back to the mid-19th Century. One of the first modern voucher experiments occurred in 1972 when Alum Rock Union Elementary School District in San Jose, California conducted a voucher demonstration program with the federal government. The Rand Corporation examined the program and in 1974 published, A Public School Voucher Demonstration: The First Year at Alum Rock, Summary and Conclusions.

Wisconsin has been a leader in school voucher programs since the passage of a 1989 state law that created the Milwaukee Parental Choice Program. The first program in the United States to significantly subsidize private schools with public dollars, it allowed certain public school students to attend private, nonsectarian schools at taxpayer expense. The 1995 Wisconsin Legislature expanded the Milwaukee program to include private sectarian schools. In June 1998, the Supreme Court of Wisconsin, in its Jackson v. Benson decision, upheld the expansion of the program to include religious schools. The United States Supreme Court declined to consider a challenge to this ruling. Wisconsin now offers several private school choice programs.

First Amendment church and state concerns have led to multiple lawsuits around the country. A three-part test has frequently been used to determine the constitutionality of such laws. It was included in Chief Justice Burger's 1971 United States Supreme Court ruling in Lemon v. Kurtzman. It states, "First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster an excessive government entanglement with religion."

In June 2019, the U.S. Supreme Court agreed to hear the case, Espinoza v. Montana Department of Revenue. The case is about Montana's state tuition tax credit program that allows taxpayers to donate to organizations that give scholarships to students who attend private schools, many of them religious. Donors receive a tax credit for their donation. A Montana Supreme Court decision had invalidated the program. In June 2020, the U.S. Supreme court ruled that the Montana Supreme Court lacked the authority to invalidate the program.

The U.S. Supreme court ruled on a similar case in Maine in June 2022. The 6-3 ruling on Carson v. Makin means the Maine Department of Education must allow families to participate in tuition assistance programs, even if their children are enrolled in a sectarian private school. This decision may affect similar programs in other states.

Legislative History in Minnesota

Minnesota law allows parents to take income tax deductions for educational expenses. The earliest such law passed in 1955. (Laws of Minnesota 1955, Chapter 741). A system of tax credits for students attending nonpublic elementary and secondary schools was enacted by the Minnesota Legislature in 1971 (Laws of Minnesota 1971, Chapter 944). Minnesota's law was implemented from 1971-1973. Though a Minnesota state trial court found the law constitutional in 1972, it shared many similarities with a New York program that was found unconstitutional by the United States Supreme Court in 1973 (Committee for Public Education v. Nyquist). In 1974, the Minnesota Supreme Court complied with the Nyquist precedent and ruled that the Minnesota tax credit was unconstitutional. In 1983 the United States Supreme Court in Mueller v. Allen upheld the state's 1955 income tax deductions for dependents' educational expenses. For additional information on Minnesota educational tax credits see, Income Tax Deductions and Credits for Public and Nonpublic Education in Minnesota.

Minnesota experienced a flurry of voucher activity beginning in the mid-to-late 1990's. Then-Minnesota-Governor Arne Carlson actively supported educational voucher programs. During the 1996 legislative session his proposed voucher legislation was rejected in committee, never reaching the full House or Senate for a vote (HF2083/SF2226). In the 1997 regular legislative session various reform proposals were introduced including "common schools of excellence" (SF1903) and increased tuition tax credits (SF21/HF33 and SF212). The K-12 funding bill, HF1684, passed in the 1997 session but was vetoed by the Governor, in part, because his proposal for increased funding for private school expenses was excluded from the bill. During the first special session of 1997, a new K-12 funding bill (Laws of Minnesota 1st Special Session 1997, Chapter 4, Article 13) passed that included increases in education tax credits. The current Minnesota Education Credit is in Minnesota Statutes 290.0674.

During the 2005 regular and special sessions and the 2006 regular session, several bills were introduced in the Minnesota Legislature that would have authorized "education access grants" for certain low income students in the Minneapolis and St. Paul school districts. None of the bills passed. (2005: SF736/HF697; 2005 Special Session: HF13/SF2; 2006: HF3504/SF2962).

In 2011, bills were introduced that would have allowed tuition funding for low income students at low performing schools who transferred to nonpublic schools (HF273/SF388). Language from these bills was added to HF934, the omnibus education finance bill, which was vetoed by Governor Mark Dayton.

During the 2013/2014 and 2015/2016 sessions, bills to create an Equity and Opportunity in Education income tax credit were introduced but did not become law. They sought to allow tax credits for individual and corporate taxpayers that donated money to a qualified education foundation. The donated money was to be used by foundations for scholarships that would pay for student tuition at a qualified K-12 nonpublic or charter school or at a public or private preschool (2013/2014: HF246/SF776; 2015/2016: HF1369/SF1396).

Similar bills were introduced and discussed during the 2017 legislative session (HF386/SF256). The education tax credit was added to the omnibus tax bill (HF4) which was vetoed by Governor Mark Dayton. His veto message specifically mentions his opposition to the proposed tax credit.

In 2021 the Education Savings Accounts for Students Act (HF1528/SF1525 and HF4744/SF4403) was introduced as an option for school choice. Three similar bills were introduced in the 2023/2024 legislative session: HF768/SF1210, HF1109/SF1000, and HF1908/SF939. These bills would allow students to fund private education from dollars, put into an Education Savings Account (ESA) by the Department of Education, that would otherwise have gone to their local public school. ESA funding could be used to pay tuition, hire a tutor, or pay for curriculum and supplies. Thus far, none of these bills have made it to the House or Senate floor for a vote.  

Significant Books and Reports

The ABCs of School Choice. Indianapolis: EdChoice, 2023. (LB1027.9 A23)

Benson, Timothy. Education Savings Accounts: The Future of School Choice Has Arrived. Arlington Heights, IL: Heartland Institute, 2017.

Burke, Lindsey and Jason Bedrick. Recalibrating Accountability: Education Savings Accounts as Vehicles of Choice and Innovation. Washington, D.C.: Heritage Foundation, 2016.

Carnoy, Martin. School Vouchers Are Not a Proven Strategy for Improving Student Achievement. Washington, D.C.: Economic Policy Institute, 2017.

Dynarski, Mark. On Negative Effects of Vouchers. Washington, D.C.: Brookings Institution, 2016.

Flanders, Will and Corey DeAngelis. The Economic Benefit of School Choice in Milwaukee. Milwaukee: Wisconsin Institute for Law and Liberty, 2016.

Larson, Lisa. School Vouchers. St. Paul: Minnesota House of Representatives, House Research Department, 2002. (LB2828.8 .L37 2002)

Lerner, Jon S. The Constitutional Case for Universal School Choice in Minnesota. Minneapolis: Center of the American Experiment, 1993. (LB1027.9 .L47 1993)

Lueken, Martin F. The Fiscal Impact of K-12 Educational Choice: Using Random Assignment Studies of Private School Choice Programs to Infer Student Switcher Rates. Indianapolis: EdChoice, 2019. 

Lueken, Martin F. Fiscal Effects of School Vouchers: Examining the Savings and Costs of American’s Private School Voucher Programs. Indianapolis: EdChoice, 2018. 

Lueken, Martin F. The Tax-Credit Scholarship Audit: Do Publicly-Funded Private School Choice Programs Save Money? Indianapolis: EdChoice, 2016.

Manzi, Nina and Joel Michael. Income Tax Deductions and Credits for Public and Nonpublic Education in Minnesota. St. Paul: Minnesota House of Representatives, House Research Department, 2017. (HJ4653.C73 M36 2017)

McCluskey, Neal P and Corey A. DeAngelis. School Choice Myths: Setting the Record Straight on Education Freedom. Washington, DC: Cato Institute, 2020. (LB1027.9 S353 2020) 

Pearlstein, Mitch. Minnesota's Immense Achievement Gaps: The Untapped Promise of Vouchers. Golden Valley, MN: Center of the American Experiment, 2014. (LC213.22.M6 P434 2014)

Railey, Hunter. Education Savings Accounts: Key Provisions and State Variation. Denver: Education Commission of the States, 2016.

School Choice: Private School Choice Programs Are Growing and Can Complicate Providing Certain Federally Funded Services to Eligible Students. Washington, D.C.: U.S. Government Accountability Office, 2016.

Shakeel, M. Danish et al. The Participant Effects of Private School Vouchers Across the Globe: A Meta-Analytic and Systematic Review. Fayetteville, AR: University of Arkansas, College of Education and Health Professions, Department of Education Reform, 2016.

Stewart, Molly S. and Jodi S. Moon. Follow the Money: A Comprehensive Review of the Funding Mechanisms of Voucher Programs in Six Cases. Bloomington, IN: Center for Evaluation and Education Policy, 2016.

Wixom, Micah Ann. Policy Analysis: Voucher Programs. Denver: Education Commission of the States, 2017.

Significant Articles

(articles in reverse chronological order)

Matias, Benito. “Now that high court has spoken, it’s time for school vouchers in Minnesota” [opinion]. MinnPost, July 15, 2022. 

Eischens, Rilyn. “GOP voucher-style program would shift $178 million away from public schools.” Minnesota Reformer, February 22, 2022. 

Fergusgon, Dana. “State would cover private school tuition under Minnesota Senate GOP bill: The measure has failed to gain support in the DFL-led House of Representatives in recent years and faces an uphill climb this year.” Rochester Post-Bulletin, February 21, 2022. 

Eischens, Rilyn. “Senate GOP, school choice advocates push new voucher-style program in Minnesota." Minnesota Reformer, May 5, 2021. 

"State Aid to Religious Schools: Tax Credits and Church-State Separation." Supreme Court Debates, February 2020, p. 2, 7-41.

Green, Emma. "Your Neighbor’s Christian Education, Courtesy of Your Tax Dollars: The Court Will Hear One of the Most Notable 'Church and State' Cases in Years." The Atlantic, October 13, 2019.

Fiddiman, Bayless and Jessica Yin. "The Danger Private School Voucher Programs Pose to Civil Rights." Center for American Progress, May 13, 2019.

DeAngelis, Corey A. and Blake Hoarty. "Who Participates? An Analysis of School Participation Decisions in Two Voucher Programs in the United States." Policy Analysis (Cato Institute), September 17, 2018, p. 1-15.

Harris, Douglas N. "Still Waiting for Convincing Evidence (Taking Stock of Private-School Choice Forum)." Education Next, Spring 2018.

DeAngelis, Corey A. and Heidi Holmes Erickson. "What Leads to Successful School Choice Programs? A Review of the Theories and Evidence." CATO Journal, Winter 2018.

"School Choice, 2017-2018 Policy Debate Topic: Should the U.S. Government Provide Funding for Private School Options?" Congressional Digest, September 2017.

Tilsley, Alexandra. "So, Do Private School Vouchers Work?" Urban Wire, Urban Institute, June 29, 2017.

Epple, Dennis et al. "School Vouchers: A Survey of the Economics Literature." Journal of Economic Literature, June 2017.

Goldstein, Dana. "Special Ed School Vouchers May Come With Hidden Costs." New York Times, April 11, 2017.

Samuels, Christina A. "Parents See Benefits in Spec. Ed. Vouchers, But No Silver Bullet." Education Week, March 22, 2017, p. 1, 22-23.

Carey, Kevin. "Dismal Voucher Results Surprise Researchers as DeVos Era Begins." New York Times, February 23, 2017.

Mull, Teresa. "Study: Tax Credit Scholarship Programs Save Taxpayers Billions." School Reform News, February 2017, p. 11.

Magan, Christopher. "School Choice, Tax Breaks for Private School Tuition Debated at the Capitol." St. Paul Pioneer Press, January 24, 2017.

Swensson, Jeff and John Ellis. "Follow the Money: On the Road to Charters and Vouchers Via the Educational-Industrial Complex." Journal of Education Finance, Spring 2016, p. 391-418.

Cunningham, Josh. "Expanding Choices With Education Savings Accounts." LegisBrief (NCSL), February 10, 2016.

Bedrick, Jason et al. "Taking Credit for Education: How to Fund Education Savings Accounts through Tax Credits." Policy Analysis (Cato Institute), January 20, 2016.

Mead, Julie F. “The Right to an Education or the Right to Shop for Schooling: Examining Voucher Programs in Relation to State Constitutional Guarantees.” Fordham Urban Law Journal, Vol. 42 no. 3 (2016), p. 703-743.

Fuller, Howard and Lisa Frazier Page. "The Origins of the Milwaukee Parental Choice Program." Education Next, Summer 2015, p. 48-55.

Prothero, Arianna. "What's the Difference Between Vouchers and Education Savings Accounts?" Education Week, June 9, 2015.

Brehm, Andy. "School Vouchers for Low-Income Parents Would Further State's Goal of Equal Opportunity." MinnPost, December 9, 2015.

Justice, Benjamin. "The Originalist Case Against Vouchers: The First Amendment, Religion, and American Public Education." Stanford Law & Policy Review. 2015, Vol. 26 Issue 2, p. 437-483.

Witte, John F. et al. "High-Stakes Choice: Achievement and Accountability in the Nation's Oldest Urban Voucher Program." Educational Evaluation and Policy Analysis, December 2014, p. 437-456.

Cowen, Joshua M. et al. "School Vouchers and Student Attainment: Evidence from a State-Mandated Study of Milwaukee's Parental Choice Program." Policy Studies Journal, February 2013, p. 147-168.

Friedman, Milton. "The Role of Government in Education." Economics and the Public Interest, New Brunswick, NJ: Rutgers University Press, 1955. p. 123-144. (Vertical File: E 12.147)

Significant Internet Resources

American Federation for Children - Working to empower parents, particularly those in low-income families, to choose the education they determine is best for their children. Includes information about types of private school choice programs.

The Case Against Vouchers - From the National Education Association (NEA).

Education - Includes reports on various education topics, including choice and vouchers; from the Heritage Foundation.

Educational Choices -- Numerous articles on a variety of issues related to choice in education including vouchers and education savings accounts; from the Heartland Institute.

Minnesota State Guide – National School Choice Week.

Research on the Impact of Vouchers and Charter Schools - Compiled by the Northwest Regional Educational Laboratory.

Types of School Choice - Information from EdChoice.

Additional Library Resources

For historical information, check the following codes in the Newspaper Clipping File and the Vertical File:
E 12.147 (Education-Vouchers).

For additional reports at the Legislative Reference Library, use these Library catalog searches:
Educational Vouchers; School Choice