March 17, 2010

Private schools tax credit uncertain in House, passes Senate

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By Andy Rosen and Nick DiMarco
MarylandReporter.com

A proposal to provide tax credits to businesses that contribute to scholarship programs at private schools faces an uncertain fate in the House after it passed the Senate 30 to 17 Wednesday.

The Building Opportunities for All Students and Teachers in Maryland tax credit (BOAST) was scheduled for a hearing in the House Ways and Means Committee Wednesday afternoon.

Committee Chair Sheila Hixson, D-Montgomery, had previously said the bill would come to a vote in her committee if it passed the Senate, but sounded less certain on Wednesday. The committee has been a stumbling block for similar bills in prior years.

“We hope so,” she said of the potential vote prior to the bill hearing. “We want to hear it first”

But the proposal would be unlikely to pass the House in the same shape as the Senate bill, which survived several attempts to scale it back on the floor. Two years ago, another BOAST bill passed the Senate but never got a vote in the Ways and Means Committee.

Hixson said the House would likely scale back the amount that contributors could claim toward the tax credit if it were to pass. She said the allowance would be perhaps Maryland’s largest tax credit.

Sen. James “Ed” DeGrange, D-Anne Arundel, lead sponsor of the bill and a fierce proponent of the program, said he favors the bill in the form that it passed his chamber. He said he hadn’t decided how he would react to a scaled back proposal.

“We’ve got a bill that I thing ought to be given an opportunity to work before we start making changes,” he said.

Proposed amendments on the Senate floor would have limited the size of of a contribution that would be covered by the tax credit. The Senate bill would allow a credit for 75 percent of a maximum $200,000 donation to private schools.

Funding for the measure would be set based on how much money is put aside by the governor. It wouldn’t cost anything in fiscal 2011, but costs could rise by $50 million annually after it takes effect.

The bill passed in the Senate the same vote count by which a similar bill was passed by two years ago.

Archbishop testifies

Baltimore Archbishop Edwin O’Brien personally asked the House Ways and Means Committee Wednesday to support the bill.

“At the same time that our own resources are decreasing, the needs of those we serve have become greater and even more compelling,” O’Brien said.

Some committee members expressed concern that private schools without non-discrimination policies would be able to take advantage of the tax credit. Washington recently began allowing same-sex marriage, a move that prompted Catholic Charities in the District to change its health benefits to avoid providing them to same-sex couples.

“If a high-school child is openly gay, would that prohibit them from going to … your schools?” Del. Justin Ross, D-Prince George’s asked O’Brien.

Ross then asked if the archbishop would be opposed to an amendment that would establish a non-discrimination policy for the children that attend those schools.

“I think we would expect to have the values that, traditionally, we do embrace, to be retained, whether or not we get a tax credit,” O’Brien said. “I would hope that this would not become a political football … our kids are at stake.”

O’Brien’s testimony comes in the wake of the Archdiocese of Baltimore’s announcement earlier this month that it will consolidate 13 of its 64 private schools at the end of this year due to shrinking student populations.

Opponents of the bill, which include organizations such as the Maryland chapters of the American Federation of Teachers and the American Civil Liberties Union, argue that it would undermine funding for public schools.

“This bill would create a quasi-private school voucher system, which would draw needed funds away from public institutions meant to serve all Marylanders,” said Michael Minh Nguyen of AFT-Maryland in written testimony.

But the bill’s sponsors say that while it would establish the tax credit it wouldn’t provide money for the program right away.

“It is not being funded now,” said Delegate James Proctor, D-Prince George’s. Instead, the credit will go unfunded until “happy days are here again, when the state can afford to put this money in the program.”

The 2011 budget “is already out,” Proctor said. “We cannot add to that budget.”

Daniel Leaderman of Capital News Service contributed to this story with testimony from the House Ways and Means Committee.