Education

Proposed Tax Credit Drawing Support in Colo.

By Mark Walsh — October 21, 1998 7 min read
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So far, school voucher advocates in Colorado haven’t had much luck with state ballot initiatives.

Voters rejected one in 1992 by a 2-to-1 margin, and an effort to place a similar measure on the ballot in 1996 got bogged down in the courts.

But this could be their year, supporters of private school choice believe.

They have dropped the idea of a voucher in favor of a state income-tax credit that would accomplish the same goal: providing up to $2,500 to poor families who move their children from public schools to private schools, including religious schools.

“In the short term, this gives kids in bad public schools an immediate escape,” said Steve Schuck, a real-estate developer here who is one of the principal organizers behind Amendment 17, as it will be known on the Nov. 3 ballot. “This makes it so that they don’t have to wait around for the system to improve.”

Supporters of the so-called Educational Opportunity Tax Credit have amassed a $1 million war chest, a significant sum for a ballot measure in this state. They are flooding the state with radio ads and a few television commercials.

And the measure appears to have a real chance of being approved. An independent survey of 600 Colorado voters set for release this past weekend showed that 52 percent of respondents supported it, 41 percent were opposed, and 7 percent were undecided. The margin of error was plus or minus 4 percentage points.

The amendment is designed to appeal not only to low-income families but also to the suburban middle class with provisions that could make the tax credit available to current private school parents, to families who keep their children in public schools, and to those who home-school their children.

In short, the measure claims to have benefits for every taxpayer with a school-age child, and thus would go well beyond existing private-school-choice programs in a handful of states.

But opponents call the proposed tax credit a voucher-in-disguise, and say it is so complex and leaves so many questions to the legislature that is hard to predict its fiscal and educational ramifications.

“This is Frankenstein,” said John Britz, the campaign manager for Coloradans for Public Schools, a coalition of groups opposing the initiative. “They don’t know what they are creating.”

The opposition campaign’s treasury is about half the size of the proponents’, with $400,000 coming from the National Education Association and about $100,000 from its state affiliate, the Colorado Education Association.

Minnesota First

Colorado is the only state with a school choice initiative on the November ballot, so Amendment 17 has attracted nationwide attention.

The state would not be the first to use tax policy to help finance families’ private school tuition and other educational expenses. Minnesota has had a tax deduction for such expenses since 1955. The deduction was relatively modest until last year, when that state’s lawmakers approved a refundable tax credit of up to $1,000 per student or $2,000 per family. Only families with an income below $33,500 are eligible.

The credits cover such expenses as tutoring, academic camps, music lessons, and school supplies, but they do not include private school tuition.

According to the Denver-based Education Commission of the States, Iowa has a $250 tax credit for private school expenses, and Arizona has a $500 credit for donations to groups that provide scholarships for private school tuition.

Both Ohio and Wisconsin have private-school-voucher programs targeted at low-income children in Cleveland and Milwaukee, respectively. The two voucher programs as well as the Arizona tax credit are all being challenged in the courts as government aid to religion that violates the U.S. Constitution.

Minnesota’s original tax-deduction policy was upheld by the U.S. Supreme Court in 1983. In a 5-4 ruling, the court said the deduction for private school expenses did not violate the Constitution because money reached private religious schools only as a result of the decisions of parents.

Todd Ziebarth, a policy analyst at the ECS, said the Colorado proposal appears to go beyond the education-related tax benefits offered by other states.

“This is the first tax-credit ballot initiative, and it appears to be unique,” he said. “The word ‘voucher’ has a lot of negative connotations attached to it, so the Colorado sponsors may have wanted to take a different approach.”

Competition Sought

Mr. Schuck of the Amendment 17 campaign admitted as much as he explained the ballot measure earlier this month. “In every sense operationally, it is a voucher,” he said.

As the 1986 Republican candidate for governor, Mr. Shuck lost to Democrat Roy Romer, who is retiring this January after serving three terms.

Mr. Schuck, a lean man with a full head of graying hair, became agitated at the mere mention of the teachers’ unions.

“I am anti-system, although I am not anti-people in the system,” he said. “Public education is not going to reform itself unless it is pressured by competition.”

He also winced when asked about the criticism that the measure is too complex and full of uncertainties.

“If we worked out every detail, it would be 100 pages,” he said. “Only a professional educator would say you have to resolve every question before you even start.”

The tax credit would work like this: For each child who leaves the public school system, his roughly $5,000 in per-pupil state aid would leave the local district and go into a new Educational Opportunity Fund.

Half the per-pupil amount, $2,500, would go for that family’s tax credit. The other half would help fund tax credits for families whose children are already in private schools, who stay in public schools, and who are home-schooled.

Opponents say they doubt there would be enough money to provide a credit to parents who keep their children in public schools.

“They refer to this as a public-private tax credit, but this is not going to benefit public schools at all,” said Mr. Britz of the public school coalition, which has its war room on the ground floor of the Colorado Education Association headquarters in Denver.

Since parents who keep their children in public school would be at the bottom of the priority list for receiving money available for the refundable credits, more students would be encouraged to leave the public system, he argued.

Catholic Support

Deborah Fallin, the spokeswoman for the CEA and the “No on 17" campaign, said proponents are counting on support among a core group of dissatisfied black parents in Denver and on parents who send, or hope to send, their children to Roman Catholic schools.

In a letter to Catholic school parents last month, Archbishop Charles J. Chaput of Denver called the tax credit “a vital first step toward education reform in our state.”

But Colorado is not a heavily Catholic state, Ms. Fallin noted.

“It’s like they have brought this Eastern [U.S.] debate to a state with a low percentage of Catholic schools,” she said.

Gov. Romer recently expressed concern about the nearly $1 million contributed by several prominent Colorado businessmen in support of Amendment 17.

“I’m very worried that if this passes, we’ll see the beginning of erosion of the public school system in this state,” he told local reporters last week.

Opponents also worry that so many of the details would be left to the legislature. Parents might not know how much the credit is worth from one year to the next, the opponents say, and they would have to pay tuition bills without knowing how much would be reimbursed at the end of the year.

In addition, the foes argue, low-income families would have to find a way to pay tuition up front and get their reimbursement later.

But Mr. Schuck said that hurdle could be addressed. Minnesota has a loan program that helps low-income families pay tuition before they receive their tax-credit check, Mr. Ziebarth of the ECS said.

Floyd Ciruli, the Denver pollster who conducted the survey for the Denver Post, KOA Radio, and KUSA-TV, said he was surprised that Amendment 17 still had relatively strong support with less than a month to go before the election. The survey was conducted Oct. 1-10.

School choice ballot measures in the past, such as the 1992 Colorado voucher initiative, traditionally start out with strong support but drop after opposition is mobilized by the teachers’ unions and other public education groups, Mr. Ciruli said.

“The assumption here was that the proponents would have some out-of-state money, but they would be dramatically outspent by the unions,” he said. But the $1 million in contributions from Colorado businessmen has given Amendment 17 more credibility, he said.

The notion that the electorate has a “fear of vouchers and tax credits has lost some of its saliency,” Mr. Ciruli said.

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