June 26, 2009
House removes scholarship tax credit from budget, Senate to bring it back
By BRIGID CURTIS AYER (Indiana Catholic Conference)
INDIANAPOLIS — Veronique Briscoe-Pulliam, a graduate of St. Thomas Aquinas Elementary School, Brebeuf Jesuit Preparatory School, Earlham College, and who is headed to law school with her husband this fall, is a continuing success story of what educational choice can bring.
The daughter of a single-parent family, Veronique was one of the first recipients of the Educational CHOICE Charitable Trust scholarships in 1991. Veronique’s mom, who noticed that her then kindergarten daughter was academically gifted, became frustrated that her daughter was not getting a challenging enough curriculum at the public school she was attending, but didn’t have the financial resources for a better school.
Veronique’s success story as told by Mary Nuetzman, a program director for CHOICE on the group’s Web page, would not have been possible without the grants awarded by the Indianapolis scholarship granting organization (SGO).
Parents like Veronique’s, who need better educational opportunities for their children, may still be in luck despite the fact that the House removed the scholarship tax credit from the budget bill HB 1001, which they passed June 19.
Glenn Tebbe, executive director for the Indiana Catholic Conference, said, “The good news is Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, where the bill is headed in the Senate, is supportive of the scholarship tax credit and the Senate is expected to have the provision put back into the budget bill.”
Over the past several months, the Indiana Catholic Conference, Indiana Non-Public Education Association (INPEA) and countless Catholics statewide have urged lawmakers to adopt scholarship tax credit which would offer a 50 percent tax credit incentive to corporations or individuals for donations made to qualified Scholarship Granting Organiza-tions (SGOs). These SGOs would then provide grants to qualifying families for school tuition or other school related costs, at the public or private school of the parents’ choice.
The scholarship tax credit was included in Governor Mitch Daniels’ budget package but was removed by the House Democrats. The House also placed limits on charter schools which offer parents choices within the public school system. “Some lawmakers in the House have concerns that scholarship tax credits combined with charter schools would create too much competition for public schools and could cause some harm for certain school districts,” said Tebbe.
“The school scholarship tax credit was an important policy initiative for legislative Republicans during the regular session,” said Jane Jankowski, a spokesperson of the governor’s office. “In the spirit of cooperation, Governor Daniels included it in his budget proposal.”
Jankowski said that the scholarship tax credit was important because “it en-courages people to help low-income children in poorly performing schools have more education options. The proposal is zero net cost and given the decline in the state’s revenues, proposals that save money received higher priority than those that spend taxpayer dollars.
“The scholarship program is for tuition and fees for students currently en-rolled in public schools with a household income not to exceed 200 percent of the free and reduced price lunch income qualification. The school where the student will use the scholarship must be accredited and administer ISTEP.”
During the regular session, a fiscal report on the scholarship tax credit prepared by Legislative Services Agency, a non-partisan government entity that supports the Indiana General Assembly, indicated that approximately 1,600 students could receive support from contributions of $10 million which is the maximum amount of contributions that would be eligible for the tax credit each fiscal year.
A May 2009 study by researcher David Stuit for the Friedman Foundation for Educational Choice found that a scholarship tax credit would result in significant net savings for the state. For example, the study’s analysis model found that at an average scholarship of $2,500 or less the state would realize at least $13.4 million in net savings in the first year alone.
The Educational CHOICE Charitable Trust in Indianapolis founded in 1991 is the only SGO in the state and was the first in the nation. CHOICE awards scho-larships that cover half of the child’s tuition, up to $1,600 annually. In academic year 2007-2008, over $828,000 in scholarship grants were awarded to 750 students, according to statistics provided by the CHOICE program.
“As far as prospects for passage [of the scholarship tax credit], we’re hopeful it will be part of the final budget,” said Jankowski. “There’s still work to be done before the General Assembly reaches final agreement on a budget.”
After the Senate passes its version of the budget, a conference committee made up of House and Senate members will work to reconcile differences between the House and Senate versions. “Maintain-ing the scholarship tax credit in the final budget will be a hard fought battle,” said Tebbe. “We’re hopeful that the Senate’s and Governor’s commitment to the scholarship tax credit is strong enough to overcome the objections some House members have with the tax credit.”
The General Assembly is expected to pass a budget before July 1, when it goes into effect.