- The Washington Times - Tuesday, January 23, 2001

RICHMOND A House committee yesterday passed and sent to the full House a measure that would provide $500 tax credits to businesses and individuals who donate to private, nonprofit scholarship funds.

The bill, in effect, creates an indirect tuition tax-credit plan, in which donors get credits for giving to the funds and then parents apply to the funds for scholarships of up to $3,100 per child per year to send children to private schools.

The bill, which still has a very difficult road ahead of it, is a significant break with Virginia tradition. Fidelity to the concept of public schools stretches back to Thomas Jefferson and has been a mantra of Virginia politicians since a plan was put in place for public schools after Reconstruction.

But the bill passed the House Finance Committee 12-11, winning support from delegates who had opposed tax credits in the past. One Republican joined the committee's 10 Democrats in voting against it, but the Republican majority on the committee was enough to carry the bill.

"This is not a question about systems or philosophy or funding. It's about getting our children the best education they can receive in Virginia, wherever that may be," said Delegate Jay Katzen, Warrenton Republican and the bill's sponsor.

Opponents, though, said the plan would take money away from public education, and they argued that's where the state's taxpayer money should be used.

"You can pretty it up any way you want, but it's a voucher bill period," said Delegate Robert D. Hull, Fairfax Democrat and one of those who voted against the bill. "I think anytime you have anything like that, you decrease the amount of money available for public education."

The way the program works, individuals or businesses could make donations of up to $500 to nonprofit organizations as defined by federal tax law, and take a state tax credit for the amount. The nonprofit organizations could then offer scholarships, and any parent whose child was accepted to a private school could apply.

Needy parents defined as those making up to 185 percent of the poverty level could receive $3,100 per child per year, non-needy parents could receive 80 percent of that, and home-schooling parents could receive $550 for home schooling or other education expenses.

This year's bill is different from bills that have died in the same committee in prior years. The other bills offered direct tax credits to parents who sent their children to private schools, which opponents argued would mainly help wealthy parents who have already sent their children to private schools.

Changing that captured the votes of Republicans like Delegate John H. "Jack" Rust Jr., Fairfax Republican, who said his fear with the other bills was that they would be a drain on the budget while the experience of Arizona, which has a program very similar to Virginia's proposal, actually saw a net savings because some students were no longer in public schools.

Mr. Katzen and other supporters told the committee there's no way of knowing the fiscal impact because they can't calculate the number of students who will use the program or how much of a decrease in school enrollment will follow.

The credit isn't refundable, meaning if a contributor only pays $400 in taxes he would only be able to take a $400 credit.

But Mr. Katzen said that still sounds like a good choice. "You can contribute your $400 to the general fund or you can give your $400 to help a needy kid."

He said in Arizona, enough folks were willing to donate money and that there wasn't a huge middle-class flight from schools.

Still, most of the established education associations, from the school boards to teachers to principals, opposed the bill, for the same reasons as the committee's Democrats.

"It will take money away for the general fund," said Rob Jones, government-affairs director for the Virginia Education Association. "About one-third of the general fund goes to education. There's no way you can say this won't take money away from education."

The bill could come up in the full House this week, but even if it passed there, its toughest challenge would still await in the state Senate.


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