NASSAU COUNTY CIVIC ASSOCIATION, INC.
"The government is us, we are the government, you and I." Teddy Roosevelt
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NASSAU COUNTY CIVIC ASSOCIATION, INC. "The government is us, we are the government, you and I." Teddy Roosevelt |
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March 3, 2007
Talk and Action Needed for Education Finance Reform
By Timothy P. Mulhearn
When Gov. Spitzer included $25 million in his budget proposal for a tuition tax deduction, some people hailed this as a bold step, as it was something that had not been done before. Other observers called it a brave more, as it was certain to be opposed in some quarters. In any event, the Governor gave members of the New York State legislature something to talk about.
Not content with talk alone, two legislators have taken action to reform how education in New York State is financed. Sen. Serphin Maltese (R-Queens) and Assemblyman Dov Hikind (D-Brooklyn) have introduced their Educational Tax Incentives Act (or ETIA), S.3627/A.6432. Before the bill was even printed, thirty-seven of their colleagues added their names as cosponsors of this progressive, forward-looking legislation. These thirty-nine senators and assembly members – Democrats and Republicans -- represent several city districts, as well as suburban and rural regions of the state.
Based on similar and successful legislation in Arizona, the Maltese-Hikind proposal is designed to help students in all of New York’s schools. While ETIA would allow some help for nonpublic school children, public education would be its primary beneficiary. It would allow principals as well as school boards to solicit donations from individuals and corporations. In return, the donors could claim a credit on their state income tax returns. This credit would be for 50% of the donation, with a $140 cap for personal tax returns and a $4,000 cap for taxpayers who file a corporate franchise tax return, as well as for those who have S corporations, limited liability partnerships, and other such business arrangements. These dollar amounts were calculated to bring the first-year cost if the bill within the $25 million figure proposed by Gov. Spitzer; however, since the credit is for only half of the amount donate, ETIA has the potential to raise $50 million to support education. Based on the Arizona experience, analysts have projected that $40 million would go to support public schools. In other words, public education would gain $15 million more than the state would lose in tax revenue. New York’s public schools would benefit even more in subsequent years, as the amounts donated are expected to increase.
ETIA would not replace the current method of funding public education. Local school boards would still be responsible for setting tax rates and for the supervision of the schools within their districts, and the state legislature would not be relieved of their constitutional mandate to guarantee that a “sound basic education” be offered to every child in New York State. Instead, ETIA is a way of supplementing a district’s tax revenue with voluntary contributions. On Long Island and across New York State local education foundations have been established for the purpose of providing additional financial support for the public schools within specific schools districts. ETIA would offer a tax credit for donations to these foundations, as well as to individual public schools or school districts. ETIA also has a provision for assisting low-wealth/low-donation school districts. Accountability would be required by means of annual reports of all donations and disbursements.
Sound education finance reform must also acknowledge the 500,000 students in New York State’s nonpublic schools, and the savings to taxpayers represented by those students and their families. Although the major share of tax-advantaged support for education under ETIA would benefit public education across the state, there is also a provision for taxpayers who wish to donate to scholarship foundations. These organizations support students in many of New York’s secular and religious nonpublic schools, mainly children from economically disadvantaged backgrounds.
ETIA has the potential to help New Yorkers in many ways. Public school leaders could maintain or expand existing academic and athletic programs without asking for increased tax revenue or for having “pay-to-play” requirements for sports teams. Taxpayers could see school tax rates held steady, rather than increasing. Parents without significant financial resources but who may live in school districts with serious safety and other concerns could turn to scholarship foundations for assistance. Wealthier New York individuals or businesses would be encouraged to support education in return for a partial tax credit.
New York State has become an increasingly expensive place in which to live. Thus the Empire State has experienced one of the highest out-migration rates in the nation. Every time a business decides to relocate out of the state, all New York suffers. ETIA is a sound attempt to make New York State a more attractive environment in which people can live, work and raise their families. While Gov. Spitzer’s $1000 tax deduction for each New York student in a school that charges tuition is a welcome gesture and provides legislators with an interesting conversation item, it is time for the legislature to act by passing the Maltese-Hikind Educational Tax Incentives Act. Specifically, this means Senate Majority Leader Bruno and Assembly Speaker Silver agreeing to allow this bill to move through the respective committees to which it has been referred, then place it on the Senate and Assembly calendars for a vote, and then passing it and sending it to the Governor for his signature. New York’s students, parents and taxpayers deserve no less.
Timothy Mulhearn is President of Hempstead, LI-based United New Yorkers for Choice in Education, unyce@earthlink.net.