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The New Media Department of The Post and Courier

SUNDAY, APRIL 03, 2005 12:00 AM

House panel to begin talks on tax breaks

Bill would give parents greater school choice

BY JOHN FRANK
Of The Post and Courier Staff

COLUMBIA--Take your seat. Class is now in session.

Today's lesson is the most emotional question facing the Legislature this year: whether to spend public dollars on private school tuition.

First, some history. When Republican Gov. Mark Sanford first unveiled legislation to give parents dissatisfied with public education tax breaks in 2004, it was met with conflicting opinions.

Since then, the rift only has grown wider, dividing education officials, parents, and most importantly, Republican lawmakers. The proposal's prospects in the House are uncertain.

Some think it would save the state money, while others argue it would take dollars from public education. Some think it is the answer to a failing school system, while others believe the system actually is improving.

This week a special House panel convenes the first public hearing to discuss these issues and more regarding the "Put Parents in Charge" bill, as supporters call it.

Members undoubtedly will get an earful from all sides. The 32 speaking slots allotted for the 3 p.m. Wednesday meeting were divided equally among supporters and opponents. Within hours they were nearly full. The South Carolina Educational Association, which opposes the bill, is calling for additional hearings.

"Most people come down on one side or the other, and they are very adamant," said Sarah Cash, whose child attends the public Belle Hall Elementary in Mount Pleasant.

The calls to speak about the issue aren't just coming from within South Carolina. If implemented, the legislation would put the state in the national spotlight as a leader of the school choice movement.

No other such statewide program exists. But the prospect of one has drawn a number of national groups to the Palmetto State. They are spending thousands of dollars on commercials, fliers and other lobbying efforts to support and oppose the legislation.

Regardless of your view, the legislation's bearing on the state's education system and its 670,000 students is unmistakable. Never before on the scale contemplated has public money gone to help fund private school tuition in South Carolina.

"If it is passed, it will drastically change the way education is delivered," said Goose Creek Rep. Shirley Hinson, a Republican co-sponsor and the chairwoman of the House subcommittee.

Opponents assert that the issue crumbles the core of the state's long-held mission to educate its youth.

"I think if you subscribe to the governor's voucher plan, it is a major shift in philosophy," said Rep. James Smith, a Columbia Democrat. "It is a departure entirely from one of the most important fundamentals of our democracy."

Speaker Pro Tem Doug Smith, the bill's chief sponsor, contends that more choices will help fulfill the state's mission.

"The fact is that we aren't moving up; we aren't moving ahead of the states," he said. "And I think it is just time for us to explore other options."

Doug Smith joked last week that lawmakers would settle the debate with an arm wrestling match. But members know it wouldn't stop until every limb was broken.

THE DOLLAR DETAILS

The wrangling began with Sanford's announcement last year. He pointed to dismal high school dropout rates and low-ranking SAT scores as evidence that the current education system isn't working.

His idea was to give parents a break on their taxes to help pay for private school tuition, home-schooling costs or the fee to transfer to a public school in another district.

The intentions of the bill introduced this year remain the same. But the current bill decreases the size of the tax breaks from 80 percent to 51 percent of what the state spends on average to educate a child. Low-income parents would receive larger credits, as would parents of students with disabilities.

Under the proposal, parents making $75,000 or less in combined taxable income would be eligible. That means the parents earn a combined salary of about $100,000 or less. Parents could take the credit against their income taxes, corporate license fees or insurance premium taxes.

The state is projected to spend $4,296 per student next year, according the state budget. Using that figure, the credits likely would amount to the following:

-- A $2,191 credit for parents who opt to send their children to private school.

-- A $2,749 credit for parents of children eligible for free or reduced lunches.

-- Between a $3,050 and $5,456 credit for parents of students with disabilities, depending on the nature of the disability.

Private school tuition in South Carolina ranges from $1,800 to $14,000 a year. Students currently enrolled in private schools or home schools would be phased into the program over a five-year period.

The bill also would allow individuals or corporations to take a tax credit for donating to private school scholarships granted by nonprofit organizations.

As it is currently worded, the donation could be "double-dipped," in that contributors could get a credit toward their taxes and also deduct the same amount as a gift to a nonprofit.

The cost of implementing the bill has not been definitively determined. Lawmakers are awaiting a cost-saving analysis from the state. The six-month study is expected to be completed this week.

So far the only cost study was done by Cotton Lindsay, a Clemson University economics professor, at the request of the South Carolina Policy Council, which is the leading supporter of the legislation. It shows the state initially could save money.

Critics have attacked that analysis as biased, causing Clemson President James Baker recently to distance the university from the controversy.

A WORKING DOCUMENT

The specific provisions of the bill are likely to change as the subcommittee conducts its work. Although the panel leans in favor of the bill, members said they would be open-minded. In fact, the bill's supporters asked the most poignant questions during a recent workshop.

Those subcommittee members also plan to present a variety of amendments. One would close the double-dipping loophole. A second would limit the bill's scope to a pilot program. Another would direct the tax credits only to struggling schools.

Rep. Jim McGee, a Florence Republican on the House subcommittee, plans to offer an amendment that would not involve tax credits at all. He wants to give money up front to low-income families.

"We have choice right now," he said. "It's with your pocketbook. You have to pay to be able to choose."

Rep. Chip Limehouse, R-Charleston, wants to abolish the $75,000 income cap. "It seems patently unfair to exclude a parent who makes $76,000," Limehouse said.

The differing opinions among lawmakers are so diverse that it seems everyone has his or her own ideas. Many are resigned to the political reality of the legislation.

McGee, a co-sponsor of the bill, best sums up the situation: "I've been around here for eight years," he said. "I know what the political landscape is. I know it will get out of subcommittee. I know it is a coin flip whether it gets out of committee. And I know it gets killed on the House floor."

If that happens, McGee and others said they still will work to get some reforms approved.

"This General Assembly, the thousands of people who have walked through this hall before, have been trying to save education for 40 years," he said. "There's been progress, but we are still lagging behind the rest of the nation.

"This bill is not going to fix that, by the way," he added. "Regardless of whether it passes or not."


This article was printed via the web on 4/4/2005 11:43:16 AM . This article
appeared in The Post and Courier and updated online at Charleston.net on Sunday, April 03, 2005.