May 8, 2009
Lawmakers to reconvene in June to pass state’s biennial budget, scholarship tax credit may be included
By BRIGID CURTIS AYER (Indiana Catholic Conference)
The Indiana General Assembly is expected to reconvene in June, when called to do so by Gov. Mitch Daniels, to complete budget negotiations and pass a biennial budget which goes into effect July 1 this year.
“The Indiana Catholic Conference (ICC) will be actively lobbying for the scholarship tax credit, which was amended into the budget bill, and we hope will be part of the final budget plan,” said Glenn Tebbe, ICC executive director.
“We have had an overwhelming response from our Indiana Catholic Action Networkers (I-CAN) this year on the scholarship tax credit, and I encourage everyone to continue contacting lawmakers on this issue. While the regular session has adjourned, we still have a chance for the scholarship tax credit proposal to be added into the budget,” said Tebbe.
The proposal, SB 528, the scholarship tax credit bill, authored by Sen. Carlin Yoder (R-Middlebury) would offer a 50 percent tax credit incentive to corporations or individuals for donations made to qualified Scholarship Granting Organizations (SGO’s). These SGO’s would then provide grants to lower income families for school tuition or other school related costs, at the public or private school of the parents’ choice.
The tax credit would allow individuals and corporations who contribute to a qualified scholarship program to deduct 50 percent of the amount of that donation from their state tax liability. For example, a donor who gave $5,000 to a participating scholarship program would be able to claim a $2,500 credit against what they owed in state income tax liability. The SGO program received $5,000 in the private donation, which would then be used to fund scholarships for lower-income students. A $2,500 state tax credit helped leverage $5,000 in private scholarship donations.
Tebbe said that another issue that went unresolved this year because the budget failed is the sales tax exemption for energy assistance. The effort to extend this program was cut short when HB 1081 did not get a hearing in the Senate. The program, which provides a sales tax exemption for heating assistance for low income households, will expire July 1 unless it is added to the new budget bill. “I am hopeful that this too can be included in the final budget plan,” said Tebbe.