STATE BUDGET INFO

Proposed Education Tax Credits

2006-2007 Executive Budget Proposal

February 22, 2006

Governor George Pataki, Executive Chamber, New York State Capitol, Albany, NY 12224

Assemblymember Sheldon Silver, Majority Speaker, NYS Assembly, Room 932, Legislative Office Building, Albany, NY 12248

N.Y. Senator Joseph Bruno, NYS Senate Majority Leader, Room 909, Legislative Office Building, Albany, NY 12247

Dear Governor Pataki, Assembly Majority Speaker Silver, and Majority Leader Bruno:

            The Educational Priorities Panel urges you, as the state’s highest elected leaders, to comply with the NYS Supreme Court order to craft a remedy in the Campaign for Fiscal Equity lawsuit and to reject the budget proposal to provide $400 million for tax credits for private school tuition.

            As we stated in public testimony on February 6th, EPP cannot think of any other tax credit that is premised on the failure of government to perform its function. If part of the state’s road system was in disrepair, should a Governor simply provide a refundable tax credit to low-income and moderate-income motorists for their troubles? Wouldn’t it be the first order of business for the state to fix its roads? Shouldn't it be the first order of business for the state to fix its public schools?

            The Educational Priorities Panel has four major objections to the logic of this proposal:

            Can the state’s failure, so far, to provide a sound basic education be ameliorated by a $500 per-child refundable deduction on family income taxes? When over a third of New York City’s entering ninth graders never graduate, even when some attend high school for seven years, isn’t the real cost to each family closer to $20,000 to $30,000 a year in lost income from a job earner? And where are the tax credits for employers who have difficulty finding skilled workers? Is this a $500 problem for them? The failure of the state to provide a sound, basic education for all of its children has had vast social and economic costs. This tax credit proposal trivializes this problem. On another level, it also trivializes government as outlined by our state’s constitution. It’s a statement that says “Here’s a discount—we haven’t done our job and don’t intend to.”

            Our second objection to these “failure tax credits” is that, despite all the careful sliding-scale calculations based on family income, the most needy families will not have the resources to benefit from this tax program. Their children are not in private school, and these families cannot pay for private tutoring, averaging from $60 an hour to $120 an hour in New York City, and then wait a year for their refund. If you were serious in helping families, you could easily raise the earned-income tax credit or raise the deduction for dependents for state income tax filers if they have school-age children and if their combined income is below $90,000. Then all modest-income families would benefit from across the entire state.

            EPP’s third objection is that these tax credits appear to be a thinly-veiled attempt at state support for religious schools. Since most public school parents can avail themselves of free tutoring programs, the bulk of reimbursements will go towards parochial school tuition. The objective is to skirt the state constitution’s separation of church and state and its prohibitions against funding religious education beyond school bus transportation and books.

            Our fourth objection to these tax credits is that they provide incentives for continual school failure. Parents in only 81 out of the state’s 720 school districts can avail themselves of these credits because one or more schools are on the federal list of Schools in Need of Improvement. What is at stake if a school turns around? Do all parochial school parents lose $500 per child if the public schools that made them eligible for tax credits improve their performance? This is an absurd and unworkable proposition. The Executive Budget provides modest tax incentives if school districts rein in their spending. Are we to believe, as tax payers, that state government will provide parents bigger tax incentives for failing public schools? Is this sound public policy? Again, we come to this question: Shouldn’t it be the first order of business for the state to fix its public schools?

            In 1729, Jonathan Swift made a “Modest Proposal” that Irish infants at the age of one year be sold as “a new dish introduced to the tables of all gentlemen of fortune in the kingdom who have any refinement in taste.” He was, of course, making an outrageous proposal. 277 years later, the “Modest Proposal” of the Executive Budget steers clear of selling low-income children as food, but it is uncomfortably close to providing incentives to families who can afford to send their children to private and religious school so long as some public school children in their communities continue to fail. We urge you to reject this twisted logic and adopt a more broad-based, workable tax incentive for modest-income families, one that is not premised on public school failure.

Sincerely,

Marilyn Braveman, Chairperson                             

Noreen Connel, Executive Director

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