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Bill Gives Tax Credits and Scholarships

A School Choice Bill filed this legislative session would allow parents to deduct private school tuition or home schooling costs from state income tax

 

It's the idea that simply won't die.

Another school choice bill has been filed for the 2012 session of the South Carolina General Assembly by two Upstate representatives and 60 other members of the House, including Speaker Bobby Harrell, have signed on as co-sponsors.

"We hope to accomplish multiple things with this bill," Rep. Eric Bedingfield (R- Greenville) said. "Number one, by simply empowering families we are hoping that allowing them to make choices in their children's education will encourage them to take a bigger role in their education."

Bedingfield is one of the architects of the school choice bill.

House Bill 4894, if passed would allow parents who send their children to private schools to write off up to $4,000 per child per year on their state income taxes. Parents who home school their children would be allowed to deduct $2,000 per child per year under the legislation. The bill would take effect with the start of the 2012-13 school year.

The bill also would provide a $1,000 tax write-off per child per year for parents who send their children to a school in a district other than the in which they live. Finally, the legislation also requires that dollar amount of the deductions to be adjusted each year to keep up with inflation.

Another section of the bill sets up two scholarship granting organization programs for parents sending their children to independent schools. The larger of the two programs sets up a scholarship program aimed at defraying the cost of private school tuition for parents of children on the Federal Free and Reduced Lunch Program offering scholarships of up to $5,000 or 75 percent of the cost of the tuition (whichever is less). That program has a ceiling of $15 million which the bill's authors expect to meet by the third year of the program. The other scholarship program offers parents of children with special needs the same level of funding to send their children to private schools. That program has a $10 million cap.

Harrell's spokesman Greg Foster said the speaker has consistently supported school choice bills filed in South Carolina, but directed questions about the bill to Bedingfield and its other chief sponsor, Rep. Brian White (R - Anderson).

Bedingfield said the section dealing with the SGOs is aimed at families living below the poverty line and those with children who have special needs and is an effort to address criticisms of past school choice bills that have died in the Legislature in recent years.

"I believe you'll find even educators say the most expensive thing we do in education is educating children with special needs," Bedingfield said. "The SGOs allow them to make choices about what is best for their children."

He characterized the bill as a way to help families stuck in failing schools to find a way out. Under the bill individuals and businesses would be able to write-off donations to the SGOs on their own tax bills until the cap on each program is reached. Those caps, like the tax credits for parents using private or homeschool options are also indexed for inflation by the legislation.

However, South Carolina Independent Schools Association Executive Director Larry White said only a small percentage of families will be able to take advantage of the scholarships. That's because most independent schools don't have much spare capacity, and aren't likely to start major building programs because they already run on very conservative budgets and don't have the capital available to construct new classroom buildings.

The Association has not taken a position on the legislation, White said.

"That's not to say that the idea of helping children at or below the poverty line isn't something that we applaud," White said. "Statewide it will depend on the availability and proximity of independent schools in their area."

"We would not be talking about a lot of students statewide who could go to independent schools," White continued. "Our schools would not be able to take a lot of students."

On the tax credit portion of the bill Bedingfield said it is a way for parents who are not using public schools to offset some of the expenses they incur in pursuing alternatives to the public education system.

"It's an acknowledgement that their tax dollars are going into a system that they don't use and allow them to recoup some of that," he said.

Bedingfield said the bill, which is compromise version of a bill he previously filed and a separate one White had previously filed, would cost about $40 million, with approximately $25 million coming from the scholarship programs. The other roughly $15 million would be from loss of revenue due to the tax credits. The SGOs are also limited to spending no more than 5 percent of their funds on administrative costs and must distribute at least 95 percent of what they take in each year.

The South Carolina Policy Council has not performed an in-depth analysis on the legislation yet, according to Communications Manager Barton Swain, but an Associated Press report on the measure puts the price tag at $37 million.

"You have to take numbers like with a grain of salt," Swain told Patch.com. "For one thing, there’s no way to judge how many people will take advantage of the several credits and deductions listed in the bill. For another, the whole idea of school choice 'costing' the state is questionable: the kids who’d be taking advantage of the deductions by definition wouldn’t be the recipients of education funding going to public schools, even though their parents pay state and local taxes like everyone else."

Bedington said the tax credits, which are applied to the total taxable income of families, not the amount of taxes owed, come out to average savings to families of approximately $300 for the $4,000 credits, approximately $150 for the $2,000 credits and less than $100 for the $1,000 credits.

The South Carolina Education Association opposes the bill, as it has previous school choice bills, according to Executive Director Roger Smith.

"It's similar to past bills, it's in the same vein," Smith said. "We haven't seen the financial/fiscal impact yet, but I expect it will be costly to the state. Bottom line it is sending tax money to private schools."

Smith said SCEA's polling data shows the majority of South Carolinians do not support the idea of sending public tax dollars to private schools. Based on a poll of 400 Palmetto State residents conducted March 1-8, 2011 polling firm Greenberg Quinlan Rosner Research found 64 percent of respondents opposed using public funds for private education, versus 33 percent that supported it. The poll had a margin of error of 4.9 percent.

Smith said members of the Legislature have been trying to pass school choice bills since at least 2004, despite opposition from state residents to the idea.

"Out of state money seems to be the common thread," Smith said.

Smith is referring to the efforts of Howard Rich, a New York resident who has supported candidates in South Carolina elections, and in other states, that support school choice and vouchers. Freedomworks, a nonprofit conservative activist group has also been a proponent of school choice programs.

"They've pledged to spend up to $1 million in South Carolina to pass this bill," Smith said.

Smith contends that while many South Carolinians are not exactly happy with the state of education here, they don't support vouchers or anything else that would send tax dollars to private schools. However, Smith said, they do support various other methods and efforts to fix the problems.

According to the SCEA poll 79 percent of respondents said increasing parental involvement was needed. Among other options respondents thought would help improve South Carolina's education system, 60 percent said improving teacher training would help, 55 percent thought reducing class sizes was a good idea and 54 percent thought expanding early childhood education programs would help as well. Only 25 percent of respondents thought vouchers for private schools would help improve education in the state.

Bedingfield said he and White, and others, have worked to address the criticisms and concerns raised about previous school choice bills, and called the bill a piece of "home-grown" legislation.

"This bill has a lot more accountability for homeschoolers and independent schools," he said. "We've done a lot to pare down the concerns from the past."

The legislation does require that the students receiving scholarships attend independent schools that meet the state's compulsory attendance requirements, have a curriculum that meets the states diploma requirements and administer national achievement and/or state standardized test to track student progress, among other requirements.

Bedingfield brushes off concerns about Rich and out of state money and said that will come up any time this issue is discussed. He said that while he and other State Representatives and supporters of school choice have had discussions with school choice activists elsewhere, this proposed law has been developed in South Carolina.

He added that he felt the chances of school choice passing this year are high based on the number of co-sponsors on his bill.

Charleston County School District Spokesman Jason Sakran said the district has not taken a position on the bill yet.

Related Topics: School choice, South Carolina State House, and vouchers

Mimi

9:30 am on Tuesday, March 6, 2012

I wonder how much tax credit there is for people who pay school tax and have no children in school at all???? This is a pathetic attempt to push up the cost of education to line the pockets of the FOR PROFIT schools. I wonder how much people in public schools can take a tax credit for??? Aleady this state is paying for private tution for those that can afford to go, assuming that private schools are any better than the public schools. The bill then allows the private schools to exploit the poor with hugh grants to off set the cost of paying CEO huge salaries. This is just another step in the wrong direction from a backwards state. They say less government but they go out of thier way to apply for more and more government assistance awarding the highest polical bidders. PATHETIC

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ReadIt

11:13 pm on Tuesday, March 6, 2012

You seemed to be heavily misguided. Practically all private schools in SC are nonprofit.

How many for-profit (or proprietary) schools (K-12) can you name?

Karen

10:00 am on Tuesday, March 6, 2012

I dont have children in school and of course I pay school tax. That's ok, because I believe educating children is in the best interest of the entire community. Maybe people wouldn't find it necessary to find other alternatives if the public school system wasnt so awful!!

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JoSCh

1:47 pm on Tuesday, March 6, 2012

I have two kids in Charleston county public schools in Mount Pleasant, they aren't awful. Quite the opposite in fact, very good teachers and excellent administrators, even if the facilities are a little old. I'm of the opinion that a school is as good as it's parents are. I'm pretty awesome, so naturally my kids school is too!

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Mimi

6:14 pm on Tuesday, March 6, 2012

maybe the public schools wouldn't be so awful if the state was as concerned about them as they seem to be about for profit schools. I also believe educating our children is very important that is why I find it impossible to pay for supplies and education tools and over bloated salaries not to mention investors profits. If you truly believe that because a company is making a profit that somehow the outcome is different you are dellusional. Now if you can pick and choose which children attend your private school paid for with public funds then you can create a allusion as to the outcome especially when you don't have to adhere to federal laws. It would have been a simple fix to change the curriculum and pay teachers what they are worth in the public schools and have more money to apply to the children instead of the CEOs. Remember in a year from now I warned you of the outcome.

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Archer 45

6:19 pm on Tuesday, March 6, 2012

If you have no kids in public school how do you know if public school is awful or not. I have 2 in Lexington County schools and they are getting an awesome education with tons of opportunity. The high schooler has talked with college recruiters from most SC colleges, Alabama, Purdue, Notre Dame the Service Academies and others. The middle schooler is moving up and has different interests and will be on an educational track aligned with his interests. If we want to move businesses into SC then we need be be serious about the public education system.

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stanley seigler

9:20 pm on Tuesday, March 6, 2012

re: the public school system wasn't so awful!!

have no recent experience with public schools...but a zillion years ago...summerville hi school provided me with an excellent education...i went to a good engineering college.

there were people there from some of the top yankee hi-schools...baltimore poly, eg.

many had to take remedial math/english courses...thanks to sville hi teachers (whom i did not appreciate then) i did not...

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John H

11:42 pm on Tuesday, March 6, 2012

Statewide our schools have continuously ranked near the bottom for decades as far as national measures are concerned. However, there are districts that continuously perform at the top and are nationally recognized. Within these districts there is a cross section of socio economic conditions yet they manage to excel. My children attended school in Richland –Lexington district 5 and got an outstanding education. They were complimented by their college professors for their study habits, among other abilities. District 5 consistently ranks in the top in the State, accomplishing this without a massive budget compared to some other districts.

John H

11:28 pm on Tuesday, March 6, 2012

Offering tax incentives for parents who CHOOSE private schooling is serious misuse of public tax dollars (37 million dollars estimated). How are SC public schools supposed to improve if funding is destabilized? How can struggling school districts plan to improve if enrollment is undermined by a system that rewards pulling students out of the public schools? This is another attempt by a few lawmakers to assist the affluent and provide a safety net for those at the bottom (scholarships for free and reduced lunch recipients) while we in the middle are stuck feeling insult to injury. We have to pay for it.

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John H

12:03 am on Friday, April 6, 2012

As of today, after doing some research, I've had to change my opinion about this bill. After reading it, I now know that this is a proposal to let those that can afford to send their children to private schools or donate to a nonprofit SFO keep a little of their money before the state gets their hands on it. Actually, I would not be contributing my tax dollars to support private schools.

I maintain that this legislation would do little to improve education in South Carolina.

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