Enacts the educational tax incentives act

Summary of provisions

This bill would permit individual public schools, including charter schools, to accept and receive voluntary cash contributions. * It also amends section 606 of the tax law to define a local education fund as a charitable organization in this state that is exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code and is established for the specific purpose of supporting public education within a specific public school district; a school tuition organization as a charitable organization in this state that is exempt from federal taxation under section 501 (c)(3) of the Internal Revenue Code, allocates at least ninety percent of its annual expenditures for financial assistance to students in order that they may attend an eligible non-public school, and provides such assistance to students in more than one such school. * It adds subsections to section 606 to allow a 66 2/3% tax credit up to $80 in any taxable year for voluntary cash contributions to public education entities, or for cash contributions to local education funds, and to allow a 50% tax credit up to $60 for cash contributions to school tuition organizations, or for the purchase of instructional materials and classroom supplies for schools or non-public home-based instruction.

Contributions to local education funds or to school tuition organizations may not be designated for the direct benefit of any particular student. * It would also add a subsection to section 210 of the tax law to allow a 60% credit up to $2,160 for cash contributions to public education entities or to local education funds, or a 50% credit for contributions to school tuition organizations. A subsection is also added to section 210 to establish a formula for assisting low-wealth school districts.

Justification

The state is considering ways of reducing the tax burden for New York residents, while educators are seeking an expansion of financial resources; permitting public education entities such as school

districts and individual public schools, including charter schools to accept and receive voluntary cash contributions will lessen the need for additional tax revenue; encouraging voluntary support for education, without prejudice for or against any state sanctioned educational enterprise, promotes the state's interest in providing the highest quality education to all children in the state; requiring a sharing of resources among school districts will insure a more equitable distribution of financial support; permitting school personnel to claim a credit for the purpose of classroom instructional materials and supplies for all students; the tax credit provided in this section is merely one of many credits available to New York taxpayers; the intended beneficiaries of this credit are students who attend public schools, non-public schools and who are educated at home.

Legislative history

05/06/09 REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS 01/06/10 REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Fiscal implications

The Department of Taxation & Finance has projected a first-year revenue reduction of $125 million. Independent analysis has projected $200 million would go to support education, including an estimated $160 million to public education, $35 million more than the cost to the state.

Effective date

This act shall take effect on the first day of January next succeeding the date on which it shall have become a law.