Neo-Vouchers: The New Corporate Tax Subsidy (Seriously)
(emphasis my own)
http://www.ctj.org/taxjusticedigest/archive/2012/06/neo-vouchers_the_new_corporate.php
School vouchers are always controversial, but a front-page story in the New York Times describes how at least eight states have embarked on a quiet strategy of back-door vouchers which divert taxpayer money through tax rebates to private donors. While two states allow individuals to exploit this tax break, most are structured as corporate tax breaks. So they are like conventional vouchers, except minus the accountability, and offering a special tax shelter for corporate profits.
Youd think you cant make this stuff up, but somebody did.
Sometimes called neo-vouchers, (PDF) the system involves corporate tax credits being doled out to businesses that contribute money to private-school scholarship funds. At their worst, they allow profitable corporations to actually make money from these contributions (they also get a write-off for charitable contributions on top of the dollar-for-dollar tax break match), reducing their income taxes by more than they actually contributed to schools. And of course, this funnels needed public school funds (and those are taxpayer dollars) to private schools that often arent even subject to the same educational standards as a states public schools.
This trend is especially troubling now because elementary and secondary school funding already faces a perfect storm: the bursting of the home-value bubble is depressing property tax collections nationwide, and the end of stimulus-related federal aid to states has further constrained education funding. And as the Times documents, these tax credits cum vouchers are often poorly designed and subject to little oversight: some states dont require the private schools receiving these scholarships to administer the same achievement tests as public schools, while others have no mechanism for directing scholarships to needy families. In fact, there is anecdotal evidence that some students benefitting from the scholarships would have attended these private schools anywaywhich means their parents are being paid, by other taxpayers in their state, to do what they were planning to do anyway.
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NYT article:
Public Money Finds Back Door to Private Schools
When the Georgia legislature passed a private school scholarship program in 2008, lawmakers promoted it as a way to give poor children the same education choices as the wealthy.
The program would be supported by donations to nonprofit scholarship groups, and Georgians who contributed would receive dollar-for-dollar tax credits, up to $2,500 a couple. The intent was that money otherwise due to the Georgia treasury about $50 million a year would be used instead to help needy students escape struggling public schools.
That was the idea, at least. But parents meeting at Gwinnett Christian Academy got a completely different story last year.
A very small percentage of that money will be set aside for a needs-based scholarship fund, Wyatt Bozeman, an administrator at the school near Atlanta, said during an informational session. The rest of the money will be channeled to the family that raised it.
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