Business Tax Credits Plan Chills Support For School Choice Bill

COLUMBIA -- Some legislators who support tax credits for parents sending children to private school don't like part of the bill that lets businesses pay their income tax obligations in scholarships.

That has created concerns that lost business tax money would blow a hole in the state's budget. Lexington Rep. Nikki Haley said it's unclear how much money the state would lose under such a plan.

The legislation, a key agenda item for Gov. Mark Sanford, says parents paying for private school tuition can take a tax credit equal to 51 percent of what the state spends on a per-pupil basis. Based on the state budget bill, that would be $2,190 this fall.

Parents, particularly those with low incomes, would be able to fill tuition gaps with money business donors give to scholarship granting groups. Businesses would be able to make those donations instead of paying state income and other taxes.

Daniel Island Rep. Jim Merrill says he doesn't think enough people will take advantage of the program to hurt the state. But Merrill said he's willing to consider donor limits and other changes to win support.

Merrill and other supporters said pulling children out of public schools with the tax credits will spur competition and leave money in classrooms to improve schools.