Tax-Credit Bills Are Advancing In Legislatures
Lawmakers in one-third of the state legislatures now in session have taken up the battle for tuition tax credits and deductions, an informal survey of the 50 states has found.
The shift in lobbying from the federal to the state level comes in the wake of last year's U.S. Supreme Court decision, in Mueller v. Allen, upholding Minnesota's tuition tax-deduction law and the recent defeat of tuition tax-credit legislation in the Congress.
Opponents and proponents of the proposals appear to be lining up on the state level much the way they have on the national level, according to legislators and leaders of national religious and education organizations interviewed during the Education Week survey.
"We may be fighting on 50 battlegrounds instead of just one," said Arnold Fege, director of governmental relations for the National Congress of Parents and Teachers--known as the National pta--which actively lobbied against the federal tuition tax-credit bill and is opposed to the state proposals. Mr. Fege added that the shift in emphasis to state legislation "will make it more difficult for both sides to fight."
Leaders of the U.S. Catholic Conference, which lobbied heavily in favor of the federal tuition tax-credit bill, also expect the states to be a major arena for discussions of the proposals, according to the Rev. Thomas Gallagher, the conference's secretary for education.
The conference last September endorsed tuition tax-credit legislation that includes that families of children in public as well as private schools. The organization, which previously endorsed tax credits for private-school families, made the shift to conform with Mueller.
As of last week, lawmakers in 13 states had introduced, or said they planned to introduce, tuition tax-credit or tax-deduction proposals during the current legislative sessions. Eleven state legislatures are not in session, and officials in 26 states reported no activity related to tuition tax credits or deductions, the survey found.
People familiar with the states' legislative proposals cited legal and political obstacles to passage of such measures in many states. But they also said the issue is likely to resurface in future legislative sessions because of the Mueller decision and because of an increase in public support for educational choices.
"I don't know of any legislation that is sure to pass," said William A. Harrison Jr., senior program director of education for the National Conference of State Legislatures. "But my guess is that the position the Court took in Mueller will make it easier for the proponents of tuition tax credits. I think the issue will be with us for some years before it's finally sifted out," he added.
Proposals for tuition tax credits, tax deductions, or both already are on the agenda in Arizona, Illinois, Iowa, Kansas, Massachusetts, Michigan, Missouri, New Jersey, and Ohio. In addition, Minnesota legislators have proposed increasing the allowable tax deduction. State education officials expect proposals to be introduced in Kentucky, New York, and Pennsylvania either in the current or next legislative sessions.
Many sponsors of the bills said they considered introducing such legislation only after the Supreme Court upheld the constitutionality of Minnesota's tuition tax-deduction law last August. They said they patterned their legislation after the 29-year-old Minnesota law. (See Education Week, Nov. 23, 1983.)
The Minnesota law permits state income-tax deductions of up to $700 to parents for educational expenses including tuition, transportation, nonreligious textbooks, and supplies. The law allows deductions for fees and other expenses incurred at public schools, as well as tuition and other fees charged at nonprofit, private schools that comply with state educational standards and federal civil-rights laws.
The Court upheld the Minnesota plan chiefly because it offers deductions to both public- and private-school parents, even though in practice only a handful of public-school parents receive the law's maximum benefits, state analyses show.
Before Mueller, proposals to aid private schools languished in state legislatures because many lawmakers assumed such aid was barred by the Supreme Court's decision in Committee for Public Education and Religious Liberty v. Nyquist. In that 1973 case, the Court struck down a New York law providing state income-tax deductions to families with children enrolled in private schools. That law had no provision for expenses incurred in public schools.
The Minnesota Model
Legislators who are now sponsoring tuition tax-deduction and tax-credit bills say they see them as a means of providing "much needed" help to private schools.
After the Mueller ruling, Catholic leaders and state legislators "flooded" the office of the Minnesota Catholic Conference with requests for information, said Brother William Rhody, the organization's education director. The office has provided background information on Minnesota's tuition tax-deduction law in response to such requests, and staff members have met with state legislators in other states to assist religious leaders in their lobbying efforts, Brother Rhody said.
The Minnesota decision appears, in fact, to have inspired most of the current proposals in other states.
New Jersey Assemblyman Guy F. Muziani, for example, said the Court's ruling last summer prompted him to introduce tuition tax-deduction bills immediately following the ruling and again this January. His measure would provide a tax deduction of up to $1,000 for expenses incurred by parents who have children in elementary and secondary schools. Like the Minnesota law, the bill allows a deduction for parents with children in private or public schools.
Despite the Supreme Court ruling in Mueller, Assemblyman Muziani said he is expecting "some debate" about whether his bill violates the Establishment Clause of the First Amendment. Nevertheless, he said, he is optimistic about the outcome because "we've got the highest court in the nation on our side and they certainly understand the law."
Assemblyman Muziani's bill and a similar bill sponsored by Assemblyman Joseph D. Petero have solid support from leaders of the state's religious community, according to Rabbi Yakov M. Dombroff, director of the New Jersey affiliate of Agudath Israel of America, a New York City-based advocacy group that monitors and promotes legislation of concern to the Jewish community.
"We are working as a united group," Rabbi Dombroff said of private- and parochial-school groups in the state.
But in other states, parochial-school leaders have not been able to provide such a united front. In Pennsylvania, for example, Representative Stephen Freind, who introduced a tuition tax-credit bill last session, is planning several meetings with state religious leaders to make sure he has widespread support before he introduces another proposal.
"We have to decide if what we have to gain is worth the battle and the blood that will be spilled along the way," Representative Freind said. "And if it's a $50 credit, it may not be worth it."
Many leaders of fundamentalist Christian schools in the state are reluctant to support tax relief for school expenses, Representative Freind said. "Some fundamentalist leaders fear that strings will come with money, and it is a justifiable fear," he said.
In several states, including Pennsylvania, constitutional provisions have been construed as prohibiting tuition tax credits and deductions.
According to Representative Freind, the Pennsylvania constitution does not allow state tax credits or deductions for any purpose. He said the state would have to amend its constitution before a tuition-tax credit would be legal--a process that he said could take up to seven years.
Legislators in Pennsylvania meanwhile are waiting to see what happens to the composition of the U.S. Supreme Court in the next few years, Representative Freind said. If President Reagan remains in office and appoints a number of justices, he said, lawmakers will be more willing to propose legislation that would aid parochial schools on the assumption that the Court would be favorably disposed toward it.
Michigan also would have to amend its constitution before passing the tuition tax-deduction legislation proposed by Senator Gilbert DiNello.
The Supreme Court's decision in Mueller "removed a major roadblock" and influenced Senator DiNello's decision to sponsor his bill, said Richard Bearup, administrative assistant to the Senator, but the Michigan constitution contains specific language prohibiting public aid to private schools.
For that reason, Senator DiNello is sponsoring a joint resolution to amend the constitution to allow aid to private schools in addition to the tuition tax-deduction bill he introduced last November.
Passage of the legislation is "by no means a certainty," Mr. Bearup said, noting that the public-education lobby is "very well organized and very vocal in its opposition."
"But their counterparts are equally capable in all those categories," he added.
In Massachusetts, where several tuition tax-deduction bills and a tuition tax-credit bill have been introduced in the current session, reli-gious leaders are skeptical about their chances of passage.
"We would naturally support the legislation, but the level of support is a question," said Gerald D'Avolio, a lawyer who is executive director of the Massachusetts Catholic Conference. "We have a very restrictive [constitution] and we couldn't even get textbooks loaned to us," he said.
Lawmakers sponsoring tuition tax-credit and tax-deduction bills acknowledged that they also face stiff opposition from public-school educators and other national education groups. In all of the states, local units of the National pta, the National Education Association, the American Federation of Teachers, and the National School Boards Association oppose the legislation, spokesmen for the groups say.
Several legislators reported that leaders of local independent schools supported their tuition-tax proposals, but the National Association of Independent Schools has opposed the measures, said Anne Rosenfeld, a spokesman for the group.
"We feel that public money ought to go to public education," Ms. Rosenfeld said. She said the nais will support a plan to provide tax relief "to parents of little means."
The Council of Chief State School Officers also opposes the tax relief, according to Carolyn Warner, Arizona's superintendent of public instruction and one member of the chiefs' group who faces such a proposal in her state.
Ms. Warner said she opposes the tuition tax-deduction bill now under consideration in Arizona. The measure, sponsored by Representative James Cooper, chairman of the House Education Committee, mirrors the Minnesota law except that it does not allow a deduction for textbooks.
"At the risk of mixing church and state, I pray that the bill fails," Ms. Warner quipped, stating that the tax-credit plans are "the first step in the destruction of quality private and parochial schools in America and the first step in eliminating choice."
Ms. Warner said she believes such laws will make private and parochial schools nothing more than an adjunct of state-controlled education.
"Over time, we will require control over private and parochial schools; the taxpayer will demand it and the state boards of education will demand it," she said, "and the state or the federal government would have every right to provide assurances that these schools are delivering appropriate education."
If they are successful, she predicted, supporters of tuition tax-credit proposals eventually would see results opposite from what they are seeking.
Representative Cooper characterized Ms. Warner's statements on the issue as "wild." Opponents of the legislation "are fearful that they'll lose students," he said. "I think the public schools need some competition, and some parents do have legitimate reasons for taking their children out of public schools, especially some schools that stress evolution and those things," Mr. Cooper added.
In action elsewhere:
In New York, another state in which lawmakers have not actually introduced legislation in this session, discussions have been "predictable," with public-education leaders and religious leaders lining up on opposite sides, according to an aide to state Senator James Donovan.
Senator Donovan, who introduced tuition tax-deduction legislation in the last session "because of Minnesota," said he may introduce a bill again in the current session but to date has no specific proposals.
State Representative Robert Miller introduced a bill to provide a tax credit for educational expenses for postsecondary education, but said he does not expect the bill to get out of committee.
In Illinois, a bill to amend the Illinois Income Tax Act to provide parents with a tax credit "equal to the tuition payments made to public or private educational institutions," has been introduced by Senator Jeremiah Joyce.
In Iowa, a tuition tax-credit proposal for both public- and private-school parents was introduced in the Senate on Feb. 7 by Senator Wally Horn.
In Missouri, Representative Jack Goldman also based the tuition tax-deduction proposal he submitted to the legislature in January on the Minnesota law, but it would provide a deduction only for private-school expenses.
In Ohio, Representative Charles R. Earl, who said he is "disenchanted with public education," introduced a bill this session which would provide an 8.4-percent income-tax credit to parents with children in nonpublic schools.