South Carolina Considers Private School Tax Perk

By: - April 2, 2012 12:00 am

Parents of private and home-schooled students in South Carolina could soon have a smaller tax bill thanks to a bill that passed the House last week that would allow parents with any income to deduct up to ,000 for private school tuition and expenses and up to ,000 for home-schooling costs. It also would provide tax credits to businesses and individuals who donate money for private school scholarships. 

If it becomes law, South Carolina would be the seventh state to offer a tax deduction or credit for private or home-school expenses, according to the National Conference of State Legislators. Eight states have tax credit pograms for donations to private school scholarship programs, according to NCSL, and several others have passed or are considering such plans this year.

Supporters of the measure emphasized that the legislation would give parents more educational choices. “I don’t believe education is a one-size-fits-all proposition,” Representative Eric Bedingfield, told the Associated Press

Opponents of the bill, which is estimated to cost the state $36.7 million in lost revenue next year, say that it would harm public education funding and would be the first step down the path to private school vouchers. 

“It’s a foot in the door approach on their part,” says Roger Smith, executive director of the South Carolina Education Association, which opposes the bill. 

More than 50 percent of the estimated beneficiaries of the tuition deduction would have an income higher than $50,000, according to the South Carolina Board of Economic Advisors. The board estimates that the tuition deduction would save private school parents an average of $205 per student, while the home-school deduction and another deduction for attending a school outside a student’s resident district would save $81 and $40, respectively. 

But even that amount can make a difference, says Jeff Reed, state programs and government relations director of the Friedman Foundation for Educational Choice. “Would we prefer that that funding be a little more considerable? Absolutely,” he says. “But we find that every little bit does help.” 

The scholarship tax credit program, which would fund scholarships up to $10,000 for students with disabilities and $5,000 for lower-income students could have an even bigger impact, he says, and could ultimately save the state money. 

Indiana last year became the most recent state to pass a private school tuition tax deduction. The $1,000 deduction was designed to provide a benefit for students currently in private school who would not be eligible for the state’s new voucher program. In Louisiana, which added a tuition deduction in 2008 that now allows parents to deduct up to $5,000 of eligible private school expenses, more than 100,000 people took advantage of the benefit in fiscal year 2011, at a cost to the state of nearly $11.9 million in lost tax revenue, according to the Louisiana Department of Revenue. 

In South Carolina, the legislature has considered bills like the current legislation for the past eight years. The bill hasn’t been introduced yet in the Senate and Senator John Courson, who chairs the Senate Education Committee, says it would be premature to comment on the legislation’s chance for success before it’s introduced.

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