Nine states have enacted education tax credit laws in the last 14 years, four states in just the past five years. More states are currently considering enactment of tax credit laws. This study provided data on enrollment trends in public and private schools in five of these states before and after education tax credits were made available. The purpose of this study was to determine if there is a relationship between education tax credits and school enrollment in K-12 public and private schools. The study of the relationship between tuition tax credits and student enrollment in public and private schools is important for at least two reasons. First, federal, state, and local governments spend a large amount of money to fund public education. If tuition tax credits lead to a shift of students away from public schools and toward private schools, it is possible that this will have far reaching effects on government funding of education. Second, if tuition tax credits shift student enrollment from public to private schools, both public and private schools will compete for students in order to maintain their budgets. This will mean more educational choices for parents and perhaps an overall improvement in school quality for both public and private options. Tax credits are meant to improve the quality of service in the public schools by introducing competition.

Vouchers, tax credits, and tax deductions have been implemented in a number of states with the intent of providing students in low achieving public schools the option of attending a private school instead. The debate about public funding and private schools is part of a larger discussion about the role of government-funded education in the United States.