March 27, 2009

School choice bill that passed in Senate awaits House action

By Brigid Curtis Ayer

In years past, school choice has been a partisan issue. Traditionally, Republicans have supported it, and Democrats have opposed it.

However, recent national trends indicate that when school choice legislation is presented in tax credits rather than vouchers, lawmakers on both sides of the aisle support it.

This trend is apparent in Indiana when looking at this year’s school choice bill, Senate Bill 528, which passed the Senate in February with bipartisan support.

The proposal, known as 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 organizations 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 gives $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 receives the $5,000 private donation, which would then be used to fund scholarships for lower-income students. A $2,500 state tax credit thus helps leverage $5,000 in private scholarship donations.

Sen. John Broden (D-South Bend), who supported the bill, said, “The focus was narrowly tailored. It really focuses on those children that are in the 200 percent of poverty category.

“I very much welcome the opportunity to help those families that are obviously having a very difficult time, and yet very much want the option and opportunity to send their children to a school of their choice,” he said. “I like very much the way the bill was tailored to reach those working-class folks.

“I generally oppose these types of bills, like voucher bills or school transfer bills, but because this bill was so well-crafted and targeted to reach those families that really need it is the reason why I supported the bill,” Sen. Broden said. “It also wasn’t school specific. The contributions are going to scholarship granting organizations rather than directly to a particular school.”

Sen. Robert Deig (D-Mount Vernon), who also voted for the bill, said, “The way I look at it is that the families that send their children to parochial schools pay taxes, but don’t receive any benefit. This will allow lower-income children to attend a parochial school.

“I know a number of families that would like to send their child to parochial schools, but they simply can’t afford them. This bill enables those families to do that.”

Prior to the beginning of the 2009 legislative session, the Indiana Catholic Conference’s (ICC) top officials met with Rep. Patrick Bauer (D-South Bend), the Speaker of the House, to get suggestions on how to craft the scholarship tax credit proposal to make it acceptable to Republicans and Democrats alike.

“The Speaker of the House was very helpful in offering ways to make the bill palatable to members of both political parties,” said Glenn Tebbe, ICC executive director, who was present during the meeting. “Rep. Bauer also has provided assistance this year with the scholarship tax credit by assigning Rep. Peggy Welch as House sponsor of the bill, who is known for her ability to foster bipartisan support. We are very appreciative for the speaker’s help.”

Despite opposition to the bill from the Indiana State Teachers Association and the Indiana Federation of Teachers, who testified before a Senate panel about fiscal concerns, bipartisan support in the House is growing.

Tebbe attributes the growing support for the legislation to two reasons.

“People who have joined our Catholic Action Network have been very active in contacting their representatives and asking for support of the scholarship tax credit proposal,” he said. “Thanks to input from the Speaker of the House on crafting the bill, many Democrats in the House are seeing the merits of the bill and how it really helps lower-income families while keeping public schools intact.”

Currently in Indiana, there is only one scholarship granting organization, the Choice Charitable Trust in Indianapolis. This group awards scholarships to families to use in 60 participating schools in and around central Indiana.

The fiscal report on the bill 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.

Senate Bill 528 has been assigned to the House Ways and Means Committee. The bill has not been scheduled for a hearing, and its fate is uncertain.

ICC officials encourage people to contact their lawmakers and ask for them to support the scholarship tax credit proposal.

To contact a lawmaker, log on to and click on “Legislative Action Center” on the left side of the screen. For those without Internet access, call 317-232-9600 or 800-382-9842 to contact a member of the Indiana House of Representatives or 317-232-9400 or 800-382-9467 to reach a member of the state Senate.

(Bridget Curtis Ayer is a correspondent for The Criterion. To learn more about the Indiana Catholic Conference, log on to

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