On Record is a regular feature which lets South Carolina’s policy-makers speak their mind about the issues most important to them. If you’re interested in guest-blogging for On Record, email PPR Editor Logan Smith. Today’s column is from John Ruoff of The Ruoff Group.
State funding of well-off private school students and homeschoolers is back on the agenda with a South Carolina House subcommittee hearing Wednesday on the latest effort to subsidize private education with public dollars. The design of the latest proposal will only transfer public dollars to higher income parents.
This legislation, whose chief sponsor is Ways & Means Chair Brian White, allows an income tax deduction for parents who send their kids to private schools ($4,000 per child), who home school ($2,000 per child) or who send their child to another public school district ($1,000). But those subsidies are not available to the majority of South Carolinians who, although they pay sales taxes and property taxes, have no state income tax liability.
If the real driver of this legislation were to ensure competition and better education for poor children, you would design the program differently. You would create vouchers and allow families to choose which school works best for their kids. That proponents instead create tax deductions to middle and upper class families which only benefit the wealthy and provide a limited amount of scholarship money for poor kids, tells us something. This is about providing a partial subsidy to families already able to send their kids to private schools or home-schooling. This is not about low-income kids.
For instance, a family of four taking the standard deduction, the tax liability is zero until they reach $29,200 in income. To get the full $4,000 for one child, you would need income of $90,200 to have a $4,000 tax liability to wipe out. That assumes that you, unlike most taxpayers in this tax bracket, don’t have enough deductions to exceed the standard deduction and that you don’t receive a break for capital gains. For each additional child you would have to add somewhat more than $57,000 in income to capture the full $4,000. For example, my parents, who sent six of us through Catholic schools, would only have been able to access the full amount if they had reported $376,000 in income.
In a classic bit of bad drafting, these deductions are inflated by growth in population plus growth in the Consumer Price Index (CPI). Leaving aside the appropriateness of the CPI, the growth in population has nothing to do with increasing costs to educate one child.
Having been accused for years of ignoring the needs of low-income students, proponents of public funding of private schools have in recent years established a tax credit for contributions to private scholarship organizations. They would pay tuition (tuition, transportation and textbooks) for low-income students and “exceptional needs” students to private schools. For low-income students, the scholarships are limited to the lesser of $5,000 or seventy-five percent of costs – that means that private schools would still be out of reach for most students, except those at the top of eligible income.
For poor kids, the total of scholarship-funding tax credits is limited to $15 million per year. Only a moment scanning reports for schools on the Poverty Index (using the same standards as eligibility for scholarships, essentially being below 200 % of the Federal Poverty Level) would make clear that $15 million would be a drop in the bucket if this were a meaningful program. Opponents would note that there are no private schools—at least none that is interested in poor students of color—in districts like Marion 7, Allendale and Bamberg 2 where just shy of 100 % of students would theoretically be eligible for scholarships. Though proponents of the fund would suggest that someone would rush in to create those schools, it is easy to see that this will not be the case if funds are limited.
Clearly, immense challenges face our schools and our children. Our long-term well-being depends upon ensuring that we address those challenges. Since poverty is a clear impediment to educational progress, we should also focus on eliminating poverty. Continuing this side discussion about subsidizing private education while we are celebrating a budget that is still short $778 per weighted student unit of recommended adequate funding clearly means one thing — we are still not taking steps toward real change. Instead, we are entertaining proposals that bolster those who need it the least and dragging us further to the failures of the past.
The quickest kill to this kind of legislation is to limit the tax deduction to the amount of property tax paid for public schools.
It seems to me the people pushing these bills are trying to re-create the private academies if the 50s and 60s. They may tell us that’s not the intent, but it sure looks like that would be the effect.
Logan,
It would be great to have a follow-on comment from you regarding the bill, which as I understand it (to my utter dismay) has been passed. Is it identical to the original proposal, was it amended in substantial ways, does it try any harder to improve prospects for lower-income families?
Thanks!