Printed on: December 03, 2012

Idaho tax break plan could send kids to private schools

JOHN MILLER
Associated Press

BOISE, Idaho (AP) - Idaho just concluded a bruising debate over reforming public education, with voters rejecting an overhaul proposed by Superintendent of Public Instruction Tom Luna.

Come 2013, the Legislature is likely to discuss another education policy change that was not in Luna's package but is perhaps just as divisive: Whether to offer tax breaks to those who donate to scholarships to help students attend private and religious schools.

The proposal is similar to one introduced in the waning days of the 2012 Legislature and is being promoted by the Idaho Freedom Foundation, a private foundation linked to economist Milton Friedman and the conservative-leaning American Legislative Exchange Council.

Foundation director Wayne Hoffman said tax breaks for donors could provide resources for students struggling at public schools to excel in a different setting.

"There are a lot of children in Idaho attending private school," Hoffman said. "For many children, that option is simply out of reach to them, because of the cost. This could be a breakthrough, for children, whether they have financial means or not."

Rep. Bob Nonini, R-Coeur d'Alene, floated the 2012 tax credit proposal in late March.  He initially capped the program's cost at $10 million to the state.

The bill died with little fanfare.

Nonini, who is moving to the Senate in 2013, didn't return a phone call seeking comment on plans to resurrect his bill this January.

In his proposal earlier this year, individuals were allowed to deduct the full amount of their donation. For instance, a $5,000 donor with an identical tax bill would owe nothing.

A corporation could have deducted half of its state tax liability.

Luna didn't return a call seeking his office's positions on the bill.

House Minority Leader John Rusche, D-Lewiston and a graduate of private Catholic schools, said such institutions can provide a quality education. But he doesn't want tax credits to fund the schools, in part because that could take away from money available for public schools, he said.

"We never asked for taxpayer money to support that," Rusche said of his Catholic school education  "That was a family decision."

Schools' share of state money is already disputed.

There's an unresolved lawsuit in 4th District Court in Boise, contending Idaho isn't funding schools adequately. Some schools have had to buttress their finances by charging fees for some classes, supplies or activities - in violation of Idaho's constitutional promise of a free public education, the lawsuit claims.

Republican Senate Education Chairman John Goedde worries that the funding proposal could circumvent strict Idaho constitutional prohibitions against using public money to fund church-affiliated schools.

Tax credits such as Nonini proposes might differ from direct, private-school vouchers offered in places like Indiana, where there's a pending challenge in that state's Supreme Court, but Goedde said the measures have similar aspirations.

"You're putting money that would be paid into the coffers of the state of Idaho into the hands of private institutions," he said. "You can do workaround to the Constitution all you want, and at some point, you destroy the soul of that document."

The constitutionality of public support for church schools has been a recurrent theme in Idaho.

In 1971, for instance, the state Supreme Court prohibited transporting parochial school students to and from their schools on public school buses.

There have been dueling Idaho attorney general opinions on tax credits.

A 1995 opinion concluded tax credits would likely be unconstitutional, while another in 1997 concluded a tax credit proposal could be constitutional - provided it wasn't a reimbursement for a religious schools' tuition.

"The benefit flows to the taxpayer/parent, not the school," according to that 15-year-old opinion.

The Freedom Foundation's Hoffman says he's confident of his legal ground on the proposed tax breaks.

"They're actually taxpayer contributions that never arrive in government coffers, so they can't be counted as government dollars," Hoffman said.

The Idaho Education Association teachers union didn't return a phone call seeking comment.