Education Tax Credits to the Rescue

Philadephia's troubled education system could benefit from tax credits

Spiraling violence in the Philadelphia school district may be making most of the headlines, but the district faces another, less well-known crisis: a runaway budget that threatens to sink an already floundering school system.

The School Reform Commission recently adopted a "lump sum" budget statement last week projecting that the Philadelphia school district will be $82.5 million over budget next year. And as the Inquirer reports, Public Financial Management of Philadelphia, a financial consulting firm specializing in government clients, produced an independent assessment projecting "a shortfall of nearly $1 billion in five years." This was after the district came up $73 million short in fall 2006 and now projects it will end the fiscal year with a $37 million deficit.

Paul Vallas, the Chief Executive Officer for the School District of Philadelphia, suggested recently that the problem could be solved by borrowing money and increasing the district's share of property-tax millage. But going back to taxpayers' wallets won't solve a systemic problem. Philadelphia can save the millions it needs through education tax credits, which are already saving costs and improving education in Pennsylvania.

These programs allow businesses to receive tax credits for donations to scholarship granting organizations, which help low-income children choose good private schools. And since it costs around $5,300 for the average private school to educate a child - as opposed to around $10,500 for the average public school - the credits cut costs a lot.

In Pennsylvania, businesses can get a 90 percent income tax credit on every dollar they donate. That means if a business owes the state $5,000 in taxes and donates $5,000 to a scholarship organization, it only has to pay $500 in taxes. Programs in other states offer 100 percent tax credits, so that business would owe nothing in taxes after donating. Tax credits can also apply to individual income taxes. This helps parents pay for education expenses like tuition and textbooks for their own children.

Education tax credit programs allow businesses and individuals to spend more of their own money on good schools that cost less. Pennsylvania's business tax credit program is already saving the state a lot of money, even as it helps low-income children escape expensive and failing schools. Pennsylvania now provides tax credits to corporations for a total of up to almost $36 million in scholarship donations per year, up from $27 million in 2005.

A $27 million tax credit program amounts to about one third of one percent of Pennsylvania's education expenditures, but because the amount spent on each scholarship is so much less than the amount spent per pupil in the public system, these credits are estimated by a Cato Institute study to save between $150 and $200 million annually.

A 2003 study by the Commonwealth Foundation, a Pennsylvania think tank, found that the state business tax credit program was already saving $136,000 a year by supporting 23 children in the Philadelphia school district. That's pocket change to a bureaucrat, but it could be a lifeline to better education for thousands of students. By covering just what parents need to send their child to a better, less expensive school, a program that supported just over 8 percent of Philadelphia students with about $24 million in tax credits would save enough to cover the $82.5 million budget shortfall the School Reform Commission predicts.

Much of this savings goes to the state government, which pays for the biggest chunk of education. But if the state devoted the equivalent of only 3.2% of the Philadelphia school budget - that's $65 million out of over $2 billion - to education tax credits supporting about 20 percent of students in the city, the local district would save $82.5 million, eliminating its budget shortfall altogether.

The City of Philadelphia could even start an education tax credit program of its own, giving individuals or businesses credits for donations against any of the many taxes it levies, like the net profits tax, the real estate tax, the school income tax, or the wage and earnings tax.

And after all, the time has come to stop the fiscal madness and put parents and communities in charge of education decisions. The District overspends year after year, and even with over $2 billion to play with, it's clear Philadelphia is not getting its money's worth. We should enable taxpayers to spend their own money on education and allow parents to choose the best schools for their children. Taxpayers spend their money more wisely than boards of bureaucrats, and parents know what's best for their children. It's past time to give them back the power to make those decisions.

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Tennessee: Legal challenge to school attire policy may be difficult

Organizations opposed to Metro School Board's approval of standard school attire may be disappointed to learn that fighting the policy with legal action may prove difficult, according to a Nashville First Amendment scholar. Following Tuesday's 7-2 vote by the board to implement the standard student dress policy, both a parents' group and the Tennessee branch of the American Civil Liberties Union said they would monitor the policy for potential student civil liberties issues - neither saying they would pursue legal action.

However, if any individual parent or group were to bring such action against the board or Metro Schools it would be difficult to win because most uniform policies do hold up in court, says David Hudson, a scholar at the First Amendment Center at Vanderbilt University. Hudson, who specializes in the student expression issues involving uniforms and dress codes, said a solid "opt-out" provision is crucial to any standard school attire policy in avoiding legal challenges. "You need to have that opt-out," Hudson said. "If you don't have that opt-out then you're going to have like what happened in North Carolina when a student successfully challenged a uniform policy saying it conflicted with his family's religious beliefs. I think that's actually a positive thing that they have the religious opt-out."

That challenge, a 1999 case involving the Halifax County Board of Education in North Carolina in which a guardian sued the board claiming the school uniform policy violated her right to free exercise of religion and her right to direct the upbringing of her great-grandson, is the exception to the rule, he said. The school district lost because they failed to have an opt-out policy for religious or medical reasons, according to Hudson.

Ashley Crownover, who formed the standard school attire opposition group Metro Parents Against Standard School Attire said she would like to see a change in the draft policy's opt-out provision. With that change in place, Crownover said she likely would not pursue a legal challenge. "We feel hopeful that a policy containing a reasonable opt-out for parents who have conscientious objections to school uniforms will be included in that new policy," Crownover said. "We feel it's essential."

Currently, Metro Schools' draft policy contains a provision stating that if the "bona-fide religious beliefs, medical or special education needs of a student conflict with the Standard School Attire policy, the school will provide reasonable accommodations." Students would not be required to wear khaki pants (or skirts) and collared shirts - the required attire under the approved draft policy - if they could prove to their individual school principals that they had a legitimate religious objection.

The parent's group would like to add a clause allowing parents to opt-out on the basis of moral or conscientious objections. Director of Schools Pedro Garcia said the policy was open to modification at the school board's meeting, but the approval of SSA districtwide was final.

Tennessee ACLU representatives issued a statement Tuesday saying they remained concerned about the policy's implementation and would be monitoring the implementation of the entire SSA policy in Metro Schools to ensure fairness to parents and students.

Garcia, according to district officials, will be looking at the policy in the coming days with administrators and members of the SSA study committee in hopes of finalizing it. They were unclear as to whether or not the current opt-out provision would be revised.

Crownover said even though changing the provision would make some parents more comfortable with the policy, she herself would not force her children to comply. She said her 12-year-old has decided not to comply and although they are expecting some repercussions, she hopes a new opt-out provision will be in place by that time. "I think they will be gentle at first," Crownover said. "I'm hoping to get an opt-out. I hope that a reasonable opt-out will be written into the policy so that people like me who feel so strongly about school uniforms will have the option to opt-out."

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For greatest efficiency, lowest cost and maximum choice, ALL schools should be privately owned and run -- with government-paid vouchers for the poor and minimal regulation.

The NEA and similar unions worldwide believe that children should be thoroughly indoctrinated with Green/Left, feminist/homosexual ideology but the "3 R's" are something that kids should just be allowed to "discover"

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