Beginning last fall, Catholic parishes and schools across our state have been hard at work collecting signatures for the Children’s Education Initiative (CEI) Petition. The goal of this drive is to secure enough signatures on this petition (167,000 statewide) to place before Missouri Voters, this November, an Amendment to the Missouri Constitution affording donors to all elementary and secondary schools in Missouri a 50 percent tax credit. This would offer substantial tax relief to parents of students in parochial and private schools. It would greatly help F.I.R.E. and the Bright Futures Fund. It would incentivize large corporations to donate to schools. And it would also help our state’s public schools.
Why are we attempting this? Why a Constitutional Amendment?
Catholic schools are the only accredited school districts in the urban cores of Kansas City and St Louis. These strong, accredited urban schools are educating the poor in Kansas City and St. Louis at a fraction of the cost of the unaccredited public school districts. According to the state Department of Elementary and Secondary Education (DESE), the unaccredited Kansas City Public School District (KCPSD) costs the taxpayer $13,000 a year per student ($16,000 a student in St. Louis; The KCPSD 2013-14 budget is $234,000,000). Visitation Parish school in Kansas City is a Blue Ribbon School, yet it only costs $5,500 a student. Why the disparity?
Every student attending a non-public school saves the taxpayer money – lots of money. How is this so? Simple. The taxpayer is not spending anything on that student plus Catholic schools do a much better job at a fraction of what it costs the state. Catholic Schools in the diocese of Kansas City-St. Joseph save the Missouri Taxpayer $130 million each and every year and it’s larger in St. Louis. Parents get nothing for this. The solution to state budget woes and horrendous urban education choices is to provide a means allowing more students the ability to attend Catholic school or a school of their choice.
Over the years, the Missouri Legislature has been unwilling or unable to pass legislation that would give tax credits to individuals or corporations who donate to schools. Achieving this through the petition and ballot bypasses our sclerotic state government. Legislation enacted during one session can easily be undone or severely changed during the next session. A constitutional amendment, once passed, would be very hard to undo. It would also be protected from state officials not friendly towards private, especially parochial, schools.
Why Tax Credits and how do Tax Credits work?
There can be much confusion regarding the various products and the solutions they offer so a bit of clarification is in order. This Amendment is not advocating vouchers. A voucher is a certificate issued by the government, which parents can apply toward tuition at a school of their choice. Vouchers come from the government; therefore, the government can stipulate how they are spent. Theoretically, the government can also have a lot to say about the academic institution where parents “spend their vouchers”. This is not something private institutions would want. Unfortunately, in Missouri, the Blaine Amendment prohibits direct or indirect funding of religious schools. As such, vouchers could not be used to fund Catholic or any faith based school in Missouri. Therefore, Tax Credits are the only viable vehicle that would offer Catholic school parents any financial relief.
A Tax Credit is the amount of money that a taxpayer (business or individual) is able to subtract from the amount of tax that they owe the government. States offer tax credit programs to incentivize certain desired behavior. Missouri offers tax credits to donors to food pantries and shelters for abused women. Missouri also offers tax credits to real estate developers, vintners and film production companies. Unfortunately Missouri offers no education related tax credits.
Tax credits differ from tax deductions. Deductions only reduce the amount of income that is taxable. Tax Credits reduce the amount of tax owed. Under the proposed amendment, the donor (individual or corporate) would receive a tax credit equal to 50% of their donation. This would be applied against their Missouri Tax bill. In addition, the donor would still receive their full federal deduction and a prorated portion of their state deduction.
The CEI will incentivize donors to schools to be more generous, especially large-in-state corporations. The CEI would dramatically lower the per pupil cost of attending Catholic School.
State funding for Public Schools or Tuition for Private Schools never seems to be enough. Parents always need to raise additional funds for education initiatives. These tax credits would help to reduce much of that burden on parents.
Public School districts such as Park Hill, Lee’s Summit, Independence and North Kansas City all have created foundations to fund education initiatives, offer college scholarships or preserve jobs during lean economic times. These school districts actively raise money every year. The CEI would greatly help these and other public school districts.
Private Schools would create scholarships that would lower the cost of tuition and afford students in distressed urban areas an excellent academic alternative to failed public schools. The CEI works in tithing and tuition based schools.
Will this invite the government to intrude into our schools? Will this violate the separation of church and state?
The answer to both questions is an emphatic NO!
Both the US Supreme Court and the Missouri Supreme Court have ruled that Tax Credits are not state funds. The US Supreme Court in ACSTO v. Winn said: “awarding some citizens a tax credit allows other citizens to retain control over their own funds in accordance with their own consciences.”
The Missouri Supreme Court in Manzara v. State of Missouri argued: “Further, this Court agrees with the recent statement of the Supreme Court of the United States that tax credits are not public expenditures…A tax credit is not a drain on the state’s coffers; it closes the faucet that money flows through into the state treasury rather than opening the drain.”
The federal government, through student loans and Pell Grants, provides direct financial assistance to millions of college students a year including students attending Catholic Universities. This federal student aid does not violate the Establishment Clause and neither would The CEI.
Has this been done successfully elsewhere?
There is a large and growing list of states that are employing education tax credits. Each state has a slightly different program. Illinois allows Tax Credits for school supply purchases such as textbooks or computers. Pennsylvania has been very successful in recruiting corporate sponsorship of schools. This has reinvigorated Catholic Schools in the urban core of Philadelphia. The reason it is growing is because it is working.
What will this do to the state budget?
The 2013-2014 Missouri state budget is $24 billion. State law requires 20 percent of the state budget to be set aside for public schools. This translates into nearly $5 billion of state dollars for public schools, and this is in addition to local property taxes. The CEI has a $90 million cap and half the credits are reserved for public schools, so the answer is not much.
The Children’s Education Initiative is designed to help the parents of all Missouri elementary and secondary students. For this to happen, parents need to help themselves by signing the petition and asking others to sign as well.
Please contact John Murphy at email@example.com to learn how you can help.