Parental choice provision passes Indiana Senate

By Brigid Curtis Ayer

Parental choice in education for low-income families is expected to expand statewide under an income tax credit provision which was amended into the budget bill and passed the Indiana Senate.

The purpose of the measure is to encourage charitable giving to expand funding for scholarship organizations across the state, especially in communities where educational choice opportunities are most needed.

Sen. Brent Steele

(R-Bedford), who offered the tax credit provision, said the provision provides up to a 35 percent tax credit against state tax liabilities for contributions made to a non-profit Scholarship Granting Organization (SGO).

The SGO may use the funds raised under this program to pay tuition and other expenses for low-income students to attend an Indiana school of their parents’ choice. Students must qualify for free or reduced lunch in order to be eligible for the scholarships. Once a student qualifies, he or she may continue to participate in future years, regardless of changes in their family income.

“For example, if an individual or company wanted to make a charitable contribution of $100 to one of the qualifying SGO’s, the donor would get a $35 tax credit,” Sen. Steele said.

“It will encourage companies and individuals to give to a Scholarship Granting Organization. It will provide opportunities [of parental choice] for people who are trapped [in a school system].

“Some of these families who qualify are very hard- working,” he said. “Sometimes, the parents are working two or three jobs to gather enough money to send their children to another school. These families are highly motivated and highly involved in the lives of their children.”

Sen. Steele said that even though parents have always had an opportunity to remove their children from a particular school system, with a partial scholarship, as a practical matter, they would have to come up with roughly 50 percent of the tuition, and also have to pay for books and transportation.

However, under his amendment, SGO scholarships can be used not only to cover tuition, but also used to pay for books, transportation and even school uniforms—costs that will make school choice possible for families that aren’t able to cover costs beyond tuition.

Bob Hoy, executive director for the Educational CHOICE Charitable Trust in Indianapolis, an SGO, said that since 1991 the organization has given almost $15 million to economically challenged families in Indianapolis. CHOICE is an acronym that stands for “Creating Hope and Opportunity in Children’s Education.”

More than 60 percent of the grants awarded to students in archdiocesan schools have been given to children in schools which now make up the Catholic Urban School Consortium.

In the past two years, since the official opening of the Catholic Urban School Consortium, CHOICE has funded more than $560,000 in grants to children enrolled in the six schools.

The Educational CHOICE Charitable Trust was the first privately funded scholarship granting organization in the country, and currently serves more than 1,200 low-income students in Indianapolis.

Sen. Steele said that even though the Choice Charitable Trust in Indianapolis is the only operating SGO in Indiana, this provision will not only expand those who will be served in the Indianapolis area, but also start fostering these scholarship organizations in different communities, particularly in areas where there is a failing school system.

Indiana would not be the first state to pass this program. Scholarship tax credits already exist in Arizona, Florida, Iowa, Rhode Island and Pennsylvania. Each of these existing programs provides tax credits ranging from 50 percent to 100 percent of the donor’s contribution.

The Indiana Catholic Conference has worked for decades to provide more parental choice options for all families in Indiana.

Glenn Tebbe, ICC executive director, said, “This measure has great potential to not only provide and expand real school choice option for lower-income families, but could greatly benefit middle-income Catholic school families as well.

“Tuition is tied to enrollment. When enrollment increases in a Catholic school, tuition goes down,” Tebbe said. “When tuition goes down, all Catholic school families benefit.”

It is estimated that the tax credits will generate $14 million in scholarship money annually, which will be awarded to lower-income families.

Statewide, more than 35 percent of children enrolled in public schools for the 2003-04 school year were eligible for the free or reduced lunch program.

Since the budget bill, House Bill 1001, was amended in the Senate, it will go back to the House for approval.

“Due to the large number of amendments to the budget bill while in the Senate, the bill will likely go to conference committee for differences to be worked out,” Tebbe said. “Our faith community can really have an impact on having this scholarship tax credit become law by contacting their state representative and state senator now and asking them to support the Scholarship Tax Credit provision in House Bill 1001.”

In October 2006, ICC issued a new statement on Parental Choice in Education. To view the statement, go to the ICC Web site at www.indiana.nasccd.org. Click the Resources button on the left to view the statement.

(Brigid Curtis Ayer is a correspondent for The Criterion.) †