February 5, 2010

The Church’s position on school choice

The Church supports school choice.

Glenn Tebbe, Indiana Catholic Conference executive director, said, “The Church has long been an advocate for the economically disadvantaged and promoting the common good of all. We recognize that lower income families often have the fewest educational opportunities and in many instances are the group that needs them the most.

“Scholarship tax credits would provide access to a parochial education for low income families,” Tebbe said. “We oppose any legislation that would delay this educational opportunity.”

How would the scholarship tax credit program work?

According to School Choice Indiana Network, individuals and corporations who contribute to a qualified scholarship program would be able to deduct 50 percent of the amount of that donation from their state tax liability.

For example, a donor who gave $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 Scholarship Granting Organization program received $5,000 in the private donation, which would then be used to fund scholarships for lower-income students.

A $2,500 state tax credit helped leverage $5,000 in private scholarship donations.

Scholarship Granting Organizations would establish their own eligibility rules, application procedures and scholarship amounts within the income limits and other administrative rules within the legislation. The state Department of Revenue would establish procedures for reporting and monitoring participation in the program as well as tax credit application processes for private donors to the Scholarship Granting Organizations.

What would this produce as far as scholarships?

The School Scholarship Tax Credit program is designed to provide a powerful incentive for charitable donations for education for lower-income children.

Consider the following example:

The program’s $5 million statewide cap would allow for $5 million in total private contributions to participating Scholarship Granting Organizations ($5 million in donations with a 50 percent credit equals a $2.5 million program cap). †

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