New York Governor Andrew Cuomo wants his education tax credit, which critics have identified as a backdoor voucher plan for private and parochial schools, and he wants it so badly that sources in Albany are saying he is trying to entice hesitant Democrats by tying strengthened rent regulations to passage of the credit. This is a familiar tactic for Governor Cuomo who originally tied the tax credit together with the Dream Act and whose budget negotiation stance insisted that any increase in state aid for public schools had to be connected to his test-centric teacher evaluation plans.
Now, in the waning days of the legislative session, the Governor is charging hard at Assembly Democrats who have not signed on to his plan for the education tax credit. The complex plan, which is being advertised as a boon for schools and struggling families, is a pool of $150 million with different set asides for getting money to different constituencies. If enacted as proposed, the bill will provide $50 million in tax credits for donors to scholarship funds for low and middle income attendees at private and parochial schools, and it provides $20 million in credits for donations to public schools. Donors could reduce their tax liability by 75% of their donations up to a full million dollars. Under the Governor’s proposal, another pool of $70 million will be set aside for credits to families who make up to $60,000 a year to help offset tuition at private and parochial schools for a total of $500 per family. The Governor has also proposed a pool of $10 million for teachers at fully public schools and at charter schools to make up for out of pocket expenses for classroom supplies. The state Senate, controlled by the Republican caucus, has passed its own version of the legislation.
Tax credits are different from tax deductions. Deductions reduce your taxable income while credits typically are a dollar for dollar reduction in your total tax liability. So while under the old charitable tax deduction available for donations to scholarship funds, a family donating $1 million could take a maximum deduction of $22,000 on state taxes, under the new tax credit, they could reduce that tax liability by $750,000. This basically means that for a million dollar private donation to a scholarship fund for children attending private and parochial schools, the state will pay $750,000 of that by relieving the donor of that amount of his or her tax burden. Although proponents insist that most recipients of the scholarships will be low and middle income, the proposal allows for scholarship money to go to families making as much as $300,000 a year. The $500 a family credit is limited to families making less than $60,000 a year, but again, as a tax credit, this is basically a direct transfer of taxpayer money to a private or parochial school. The teacher benefit is set at $200 per teacher.
Let’s be absolutely clear: a donation of a million dollars will be subsidized by tax payers to the tune of $750,000 for scholarships that might go to people earning $300,000 annually while genuinely needy families will get a $500 coupon for tuition (which is about 1/24 the average cost of tuition at a Catholic school in the United States) and teachers will get slightly less than the cost of 10 packs of multi-colored Sharpies.
At the end of the day, no matter what it is called, the bill is a complex transfer of public money to private hands with little guarantee that genuinely helpful sums of money will ever make it to genuinely needy families.
This is the proposal aggressively pushed by a governor who is billions of dollars behind the state’s constitutional obligation to fund public schools equitably, who continues to use accounting tricks to cheat school districts out of millions of dollars owed under the already inadequate funding in the state budget, who has restricted districts from increasing revenue locally without a super-majority, and then has the nerve to blame strangled school districts for not raising test scores.
If you are public education advocate on social media, you have probably seen some of the aggressive “truthiness” that has been masquerading as grassroots advocacy on this issue. This is from Twitter:
I find this tweet to be emblematic of the past 30 plus years of claiming you can get something for nothing from advocates who want to funnel as much of our national commons into private hands as possible. The $20 million in tax credits for public education purposes would fund donations for public schools covering barely 1/2 of 1% of the over FIVE BILLION in unfunded state aid to schools left from the Campaign for Fiscal Equity Settlement. And in order to get THAT, the public has to agree to tax credits that send $50 million in tax dollars to private and religious foundations and another $70 million that will go in $500 increments to private and parochial schools as “credits” that act as vouchers. And itty bitty vouchers at that.
This is not a “tax free” way to increase spending on education, and the claim that this increases education spending without raising taxes is pure “truthiness”. This is taking a chunk of our current tax pool and divvying it up 80% into private hands. Some of those hands may be extremely worthwhile and deserving of the generous support of their wealthy patrons. But they are also not accountable to the same public purposes and oversight as our fully public schools, and many of them are religious organizations that are now going to be getting public funding. By making these tax credits instead of tax deductions, Governor Cuomo has essentially crafted a proposal whose most generous subsidies amount to the very wealthy directing how their tax dollars get spent. It is another example of political donor class writing themselves out of the rules by which everyone else lives.
Wavering Democrats in the Assembly should hold firm. The precedent of this plan is too radical to approve.