Freedom fighters in our state General Assembly are continuing their quest to expand educational liberty for North Carolina’s students. Last week, I heralded attempts by state lawmakers to raise the charter school cap; this week, I’ll provide an overview of new legislation permitting tuition tax credits.
What exactly is a tuition tax credit? The Friedman Foundation defines tax credits as”dollar-for-dollar refunds for approved educational expenses.” Parents claim these tax credits on their state income taxes. Seven states have already passed legislation allowing tax credits: Florida, Arizona, Iowa, Pennsylvania, Illinois, Minnesota and Rhode Island.
Let’s hope North Carolina won’t be far behind. Currently, true school choice in our state exists only for families with the financial means to pay twice for education: first, through taxes supporting government schools, and again through tuition at a private school. But “Tax Fairness in Education,” House Bill 421 (and its companion legislation, Senate Bill 703), seeks to resolve this inequity. Both bills permit families to deduct as much as $2,500 per child from their annual state tax bill; families must have a yearly taxable income under $100,000 to qualify. Families with tax bills falling below this deduction are eligible for a refundable credit. HB421 and SB703 also open the door for county commissions to pass along tax savings to families choosing non-government education options.
House Bill 430 (“Tax Credit – Nonpublic School Students”) and Senate Bill 702 would also expand educational options, but with a two-pronged approach – establishing education tax credits while alleviating school overcrowding in densely populated areas. In many fast-growing North Carolina counties, public schools are unable to keep pace with soaring enrollments, leading to packed classrooms and sky-high facilities costs. HB430 and SB702 permit families living in these counties to claim an annual state tax credit of $2,400 per child for education expenses, if parents choose home or private schooling. According to Rep. Blackwood, one of HB430’s sponsors, this bill applies to 26 counties and is also a refundable credit. It’s also worth noting that these tax credits cost counties nothing, and ease the burden placed on property taxes.
Finally, legislators are considering a tax credit bill for special-needs kids: House Bill 388, “Tax Credits for Children with Special Needs,” would allow families to deduct as much as $6,000 per year for tuition and educational/therapeutic expenses for special needs children. County commissions would have the flexibility to assist families with expenses incurred while educating their children.
What’s the status of tax-credit legislation? House Bills have been referred to the House Education Committee, and Senate Bills to the Senate Finance Committee. Democrats hold all leadership positions in these committees, meaning they determine which bills come up for discussion and vote. Before making it to the House or Senate floor for a vote, bills must clear these (and possibly other) committees.
As with all things political, tracking legislation is a constantly evolving process. In the past week, the General Assembly has churned out 444 bills, bringing the total for this session to over 2,100. Part of the legislative proliferation is due to North Carolina statute: in order to remain viable in the law-making process, a bill must “cross over” from the House or Senate by a predetermined date; this year, May 17th is the magic day.
Clearly, now is the time for citizen activism. Be forewarned, though. Education establishment lobbyists labor tirelessly behind the scenes, pressuring lawmakers to keep school-choice bills forever in committee, never to see the light of day. But this need not be the case. Inform your representatives and the committee members who hold these bills of your views. Hold legislators accountable for their action, or lack of it. Opposition may be fierce, but so is our resolve. Join us as we fight for educational freedom!