The St. Louis Federal Reserve has developed a working paper that proposes a charter school tax credit, similar to Low Income Housing Tax Credits, to potentially end the perpetual cycle of experimentation that currently plagues the charter system. Their proposal is explained by Ian Galloway at StLouisFed.org.
Credits would be allocated to the states, which, in turn, would award them to high-performing charter schools. Upon receiving the credits, schools would sell them to private investors and use the proceeds to fund wrap-around services or intensive classroom-based initiatives. The price paid for the credits would be based on the investor's level of confidence that those services and initiatives will deliver the academic results necessary to stay in program compliance and avoid credit recapture. Compliance requirements would be specific, measurable goals demonstrating low-income student achievement. These standards would have the dual benefit of allowing the government to monitor improvement while also allowing the school to evaluate its own programs and adjust them as needed.A similar plan was proposed last year by the MO Senate to allow tax credits to those who fund private school