A public hearing was held Wednesday on House Bill 5101, a bill establishing a tax credit for donations to non-profit organizations that provide scholarships to private schools. Proponents of the bill argue that it will allow for better academic opportunities for low-income students who may otherwise not be able to afford private education.
The bill is sponsored by Rep. Holly Cheeseman (R- East Lyme) and co-sponsored by Rep. Devin Carney (R- Lyme), Rep. Tami Zawistowski (R-East Granby) and Rep. Mark Anderson (R-Barkhamsted). Several representatives of Connecticut private schools as well as non-profit advocacy groups testified in favor of the bill, while several public school teachers and concerned residents testified against it.
“There’s nothing that will drive a more vibrant, hopeful future for our state’s low income children than a good education,” said Carol Platt Liebau, president of Yankee Institute. “This is common sense legislation.”
This is the second time that Connecticut Republicans have introduced a similar tax credit. Last year, Rep. Tom O’Dea (R-New Canaan) proposed HB 6344 which intended to do the same thing. Rep. Cheeseman said the bill was “taken out at the last minute in last year’s budget,” in a press conference she held today in support of HB 5101.
While the full text of the bill has not yet been drafted, 20 other states, including nearby New Hampshire and Rhode Island, have passed similar bills. These bills offer non-profit organizations, sometimes referred to as “scholarship granting organizations” (SGOs), tax credits for every scholarship they provide students to attend tuition-bearing schools. In some states, these tax credits can account for up to 100% of the cost of the donation. Currently, Connecticut law stipulates that SGOs can write off tuition scholarships as standard charitable deductions, a lesser financial incentive than tax credits.
Several proponents argued that the passage of this bill would further incentivize donations to SGOs so they can provide more scholarships, which in turn would provide better academic opportunities to low-income students who may thrive in private schools.
Opponents of the bill argued that the inverse is true and that allowing partial or full tax credits to SGOs would amount to the preferential treatment of private schools. They argued that public school districts are already underfunded and students who don’t receive such scholarships are left behind. One such opponent was Lauren Mancini-Averitt, teacher and president of the Meriden Federation of Teachers, who submitted written testimony against the bill.
Mancini-Averitt described the proposed bill as a “voucher scheme, plain and simple.”
“Rather than collecting taxes and then giving a portion to a private school through a conventional voucher, the government forgoes those tax dollars so long as they go to a private school through a TTC voucher,” said Mancini-Averitt of the bill. “They divert taxpayer dollars through SGOs that are unaccountable to taxpayers and even public officials.”
Diane Guz, a lifelong resident of New Haven who works as a paraeducator at Celentano Magnet School, said in her written testimony that the bill “would be a slap in the face to all public education schools.”
“As a magnet school, we don’t charge tuition to our program,” read her testimony. “We need to conform to all state regulations in regards to education. Most private and charter schools can do as they please.”
Sen. Cheeseman said that the concern of diverted funds is overblown.
“It doesn’t take any money away from public schools,” said Cheeseman. “It simply provides the opportunity for people to donate and take the tax credit. We have $3 billion in stranded tax credits in the state that aren’t being used, $2.5 million a year is not going to take a penny away from any student.”
The $2.5 million Cheeseman referred to is the proposed total limit in yearly tax credits that would be allowed in the state’s budget if the bill is passed.
Regardless of what anyone thinks for or against the bill, however, demand for these scholarships appears to be high, according to Dr. Carolanne Marquis, CEO of the Connecticut Center for Educational Excellence (CTCEE), a Connecticut-based SGO.
“We released our scholarship application once again, at March 1st at 12:01 a.m.,” said Marquis. “By 12:30 a.m., I had 100 applications in and they had managed to crash our system.”
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