Business leaders voice support for tax credit

Legislature-2016-sBy Jessica Able, Record Staff Writer

Two bipartisan bills filed in the Kentucky General Assembly aim to provide families with more educational options.

Senate Bill 44 and House Bill 336 would provide scholarship tax credits to individuals and businesses that make contributions to either a scholarship-granting organization — such as the Catholic Education Foundation — or a fund for public schools.

Andrew Vandiver, associate director of the Catholic Conference of Kentucky (CCK), said the scholarship tax credit program would increase financial assistance to families who wish to send their children to non-public schools, such as Catholic schools. The CCK, the public policy arm of Kentucky’s four bishops, supports the legislation.

Local business leaders David Heintzman and Charles Leis believe some in the business community will stand behind the proposals, too.

Heintzman, chairman and chief executive officer of Stock Yards Bank, said this legislation would be a “win-win for all kids” in Kentucky.

“We’ve hired quite a few people who have gone through the Catholic school system. As I look today at the cost of Catholic education, probably quite a few of those individuals, including me, might not have had that opportunity,” said Heintzman, who is a parishioner of St. Agnes Church.

Heintzman added that the tax credit program would encourage more competition, thus creating a better product.

“I’m a believer that access to competition is good for business and it’s good for customers. This brings more competition to the system by allowing students a choice, regardless of their financial ability,” he said.

In the end, he said, kids will be the winner — both students in public and non-public schools.

“Everyone is a winner when there is a choice, not just affluent kids,” he said.

Heintzman said he believes businesses will see this as an opportunity “to give back for both our current employees, who went through the Catholic school system, as well as looking to ensure it continues.”

Charles Leis, vice president and chief executive officer of Brandeis Machinery & Supply Company, said the proposed legislation appeals to potential donors because it is not a contribution deduction but rather a direct state tax credit, equal to 90 percent of the contribution.

Tax deductions are only six percent, which is consistent with Kentucky’s state tax rate.

“It’s really coming in up front,” he said. “It essentially says, if you make a contribution, you get 90 percent of that in the form of a credit.

It’s very attractive for a donor to come up with the money.”

To make this legislation effective, citizens of Kentucky must “want to volunteer and give money to help schools out,” said Leis, who is also a board member of EdChoice Kentucky, a bipartisan coalition that supports the legislation.

Vandiver said one of the misconceptions surrounding the proposed legislation is how the scholarship tax credit program will be funded.

“This is a completely privately funded program, which gives donors tax credit as opposed to a tax deduction,” he said. “This is something already happening in Kentucky. We already have organizations which provide scholarships. This would just create more opportunities for these organizations to reach more families.”

Detractors, Vandiver said, voice concern of the potential tax revenues that will be lost if this measure passes.

Research conducted by the Friedman Foundation for Education Choice indicates that if the scholarship tax-credit measure were to pass, an estimated 7,000 children would move from public to non-public schools in the first year. In Kentucky, there are approximately 675,000 students in public schools and more than 70,000 students in non-public schools.

“Any cost that would occur from funds not collected as part of the tax-credit program are surpassed by savings of children going to non-public schools,” Vandiver said.

In recent polling conducted by EdChoice, 73 percent of those polled said they viewed scholarship tax credits favorably, with 47 percent saying they were “highly favorable.” This polling was based on input from 500 likely voters.

Twenty-nine states have similar school-choice programs, including Illinois, Indiana, Ohio and Tennessee.

The CCK urges voters to contact the Legislative Message Line at 1-800-372-7181 (or 1-866-840-6574 for Spanish) and ask their state representatives to support House Bill 336 and their senators to support Senate Bill 44.

Senate Bill 44 is sponsored by Senators Ralph Alvarado and Max Wise. House Bill 336 is sponsored by Representatives Tommy Thompson and Russ Meyer.

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