Private school tax credits pro­gram moving in House

Background: A bill to put into permanent law the exceptional needs tuition tax credit program (H.4537) was swiftly taken up and passed out of the House Ways and Means Committee this past week and may be taken up by the full House the week of February 22.

The statewide program has been operating for the past three years through a budget proviso. The statewide program provides individual and corporate income tax credits for contributions to organizations that award scholarships to exceptional needs stu­dents to attend private and parochial schools. A sec­ond refundable tax credit was added in the current year’s budget that applies to individual income tax for tuition and expenses for exceptional needs chil­dren attending private school within the taxpayer’s custody or care. Cumulatively, the two credits may not exceed a total of $12 million.

In addition to the bill, the current proviso was adopt­ed for next year’s budget (Proviso 1.86) by the Proviso Subcommittee of the House Ways and Means Com­mittee. The proviso adoption ensures the program continues next year if passage of the bill does not occur this session.

Position statement: SCSBA testified its opposition to the program and communicated the membership’s long-standing position of opposing the use of public funds directly or indirectly to subsidize private and/ or parochial schools. SCSBA, however, stated that if it is the will of the General Assembly to continue oper­ating the program, the program should be amended and offered several changes, which the subcommit­tee and full committee did not take up. The changes SCSBA requested are as follows:.

  • Add “religion” and “prior academic performance” as factors for non-discrimination in the definition of eligible independent schools. Currently the bill states the schools will not discriminate against race, color and national origin.
  • Require eligible independent schools to provide special needs programs and services to students receiving scholarships or direct tax credit refunds as required in their Individualized Education Plan (IEP).
  • Direct scholarship granting organizations and the individual refundable income tax credit be awarded to students who, among other things currently listed in the bill, do not receive special needs services from the State or school district of their legal residence.
  • Add “income tax fraud conviction” as another criteria for prohibiting anyone from serving on the staff or serving as a member of the governing board of a scholarship granting organization.
  • Require independent schools to publish test scores as required of public schools and require those schools whose students receive scholar­ships and/or refundable tax credits to provide a complete audit every five years.