News

Trio introduce education tax credit legislation

By Jeff Kurowski
Compass Assistant Editor

GREEN BAY -- State Rep. Phil Montgomery (R-Ashwaubenon) introduced a plan to provide tax credits for educational expenses at K-12 public and private schools as well as creating incentives for private sector contributions to schools and scholarship funds.

Reps. Montgomery, Karl Van Roy (R-Howard) and John Nygren (R-Marinette) unveiled the education tax credit plan at a May 11 press conference at St. Thomas More School in Green Bay.

"We are rolling out a great new program for all children," said Montgomery, "a Wisconsin initiative that will have the opportunity to make education affordable for all. We are putting kids first and helping families afford education."

The initiative is a two-phase plan, explained Montgomery. Families with a household income of $40,000 or less with a $10,000 allowance per dependent are eligible for a maximum $5,000 education tax credit. For example, a family with two dependent children and an income of $60,000 would be eligible for the tax credit. If the family tax liability is only $3,000, for example, that is the tax credit they receive.

The second phase provides tax credits to businesses that contribute to scholarship funds set up at private or public schools.

"Corporations can set up an endowment," said Montgomery. "They can give an unlimited amount of money for educational needs. The businesses get to set the criteria. They get to work with the schools. The experience of similar plans in other states is that 90% of the contributions from businesses were needs based."

The plan follows a 1999 law passed by the Illinois state legislature, which enacted a state income tax credit for educational expenses, including tuition and book and lab fees incurred by K-12 students at public or private schools. New York and Minnesota also have long-standing traditions of tax credits for educational expenses.

Education tax credit plans have also been passed in other states. In 2001, Pennsylvania became the first state to pass an education tax credit aimed at corporations. Arizona and Florida also have laws in place providing tax credits to businesses that donate to scholarship funds.

Bp. David Zubik, a Pittsburgh native, supports the measure. He said it has had a positive effect on education in his home state.

"Begun in 2001, more than one million Pennsylvania students currently are eligible to receive funding to attend the school that best meets their academic needs," he said. "During the 2006-2007 school year, more than 38,000 students were awarded scholarships. Imagine the promise that this proposed legislation in Wisconsin holds for families as well as for public and private schools."

Montgomery said any notion that the plan is designed to solely support students attending private schools is false.

"It will provide funds to relieve some of the financial burdens on public schools," he said. "There is a great opportunity for public schools to receive support for programs which are being cut at some schools, such as physical education and tech education."

"This proposed legislation holds the promise of helping families as well as private and public schools," said Bp. Zubik. "Giving families more educational choices is a good plan and clearing the way for businesses to help is solid thinking. I urge all Wisconsinites to contact their state representatives in the months to come and voice their support for further improving education in Wisconsin."

The legislators hope the plan is included in the State's 2007-2009 biennial budget, and will be introducing the tax credit proposals for legislative review as early as this week.

"There is a lot of support in the Wisconsin legislature to expand educational opportunities," said John Gard, former assembly speaker. "The costs are minimal when you look at the amount of new money that will come into education from private dollars. There is a very good chance that over this contentious budget process that this can actually get to the governor's desk this summer."