An Education Tax Credit Plan for New York: Creating New Education Options for Parents (February 2006) Press Release Report

Governor Spitzer's Tuition Tax Deduction Proposal In his 2007-08 executive budget, Governor Spitzer proposed an education tax deduction of up to $1,000 per eligible dependent. Eligible education expensed include tuition for public or private (including religious) schools in New York State. Expenses for higher education were not eligible. To be eligible for the deduction, individuals must have a Federal Adjusted Gross Income (filed joint or separately) of less than $125,000. The amount of the credit was $1,000 per eligible dependent for individuals with Federal Adjusted Gross Incomes of less than $116,000. The amount of the credit would have been phased down by $100 per $1,000 of income for families with incomes of $116,000 to $124,999, and families with incomes of $125,000 or more would not have been eligible for the deduction. If a family did not owe taxes or owed less than the amount of the deduction, the difference would not have been provided to the family as a refund. The State Legislature did not include the proposal in the adopted 2007-08 state budget.

 

Resources and Other Information

	FERA's Jason Brooks: Charter Schools and Tax Credits Aid Spitzer's Education Plan, Syracuse Post-Standard (1/30/07)		Summary of Gov. Spitzer's Proposed Education Tax Credit
	Quotes on Education Tax Credits		Text of Gov. Spitzer's Proposed Education Tax Credit Legislation
	Education Tax Credit Laws in Other States		Summary of Education Tax Break Legislation in New York (2007-08 Session)

News Articles

Support for New York's Proposed Education Tax Credit

Opposition to New York's Proposed Education Tax Credit

Education Tax Credit Archive

Tax credits are an alternative to vouchers that increase choice options but stop short of providing tuition funds directly to parents or schools. Instead, qualified expenses are deducted from an overall tax obligation, thereby easing the financial strain of education costs. Tax credits typically work in one of two ways: 1) allowing parents to spend money on tuition expenses tax free through a direct deduction; or, 2) allowing businesses to take a deduction for donations to qualified scholarship funds.

Many states have initiated tax credit programs, including: Minnesota, Illinois, Pennsylvania, Arizona, Florida, and Iowa.

The federal government also provides two tax credit programs for students pursuing higher education. The HOPE and Lifetime Learning tax credits are available to college students meeting qualifying criteria. Check out the IRS website for more information.

Patrick L Anderson; Richard McLellan, JD; Joseph P Overton, JD; and Gary Wolfram, PhD, “The Universal Tuition Tax Credit: A Proposal to Advance Choice in Education,” Mackinac Center for Public Policy, November 1997.

This report by the Mackinac Center proposes a way to establish a tax credit program to offer educational choice to all citizens and save tax dollars in the process. While specific to constitutional changes for Michigan, the ideas can be applied to circumstances in many places. The authors included fiscal analysis and a discussion on choice philosophy in the report. 

 

Carrie Lips Lucas, “The Arizona Scholarship Tax Credit: Providing Choice for Arizona Taxpayers and Students,” Goldwater Institute, December 2003.

This report examines the Arizona school choice program that created a $500 dollar tax credit for individuals or businesses that donated to qualifying nonprofits for scholarships. The author discusses the fiscal impacts of the program, program characteristics, and possible modifications.

 

David F Salisbury, Phd; Richard Maxfield, Phd; Maxwell Miller, Esq; Jim Bischoff, MS; The Universal Tuition Tax Credit: Advancing Excellence through Parental Choice and Empowerment,” The Sutherland Institute, October 1999.

The Sutherland Institute examines the idea of Universal Tuition Tax Credits and the potential impacts on the state of Utah. The study examines parental choice, financial impacts, constitutional theory, and answers to common questions about tax credits.

 

Jospeh G. Lehman, “Vouchers or Tuition Tax Credits: Which is the Better Choice for School Choice?” National Conference of State Legislatures Annual Conference, July 20, 2004.

Joseph G Lehman of the Mackinac Center for Public Policy delivered this talk to the attendees of a meeting hosted by the National Conference of State Legislatures. It is a thoughtful discussion of the differences between two similar forms of school choice, tax credits and vouchers.

The Heartland Institute offers a comprehensive compilation of many studies and scholarly articles written on tax credits, available at: www.heartland.org/PolicyBotTopic.cfm?artTopic=440