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Idaho lawmakers dump private school tax credits

A Senate panel ended hopes of private and religious schools that were pushing for Idaho to extend a tax break to people who donate to scholarships meant to defray the cost of tuition.

The Local Government and Taxation Committee voted 7-2 on March 26 against the plan from Sen. Bob Nonini, a Republican from Coeur d’Alene.

The measure, which passed the House on a 35-33 margin the week before, would have created tax credits worth up to $10 million annually; individual donors would have been able cut their tax liability to zero, while corporations could cut their tax bills in half.

Nonini also said his measure was tailored to limit scholarship awards to children from lower- and middle-class families. For instance, a family of four people that earns $63,900 annually could qualify, according to the bill.

After less than an hour of testimony, however, Senate President Pro Tem Brent Hill of Rexburg dismissed the idea, arguing it wasn’t right to allow donors to benefit at the expense of the rest of the taxpayers.

“The donor is going to profit off making this donation at the cost of the public,” Hill said. “That’s just not fair.”

Hill also worried that private, nonprofit organizations — envisioned by Nonini to accept the donations and hand out the scholarships — would have been allowed to take a 10 percent cut of the money for their administration costs. That makes the scholarship idea less efficient, Hill said.

“We’d be better off just making an appropriation of $8 million to the” private schools, he said. “However, our Constitution prohibits us from doing that.”

The Idaho Constitution strictly forbids public money from going to sectarian or religious schools.

Nonini’s bill sought to get around that problem, by creating a tax credit instead of a state-sponsored voucher for families looking for an alternative to public school.

He came armed with an opinion from the Idaho attorney general’s office that his bill passed constitutional muster.

“This is not a voucher, this is a tax credit,” Nonini said. “There’s a distinct difference there.”

The American Civil Liberties Union spoke against the bill, however, saying it had disagreed with the Idaho attorney general before — a hint that the measure, if it became law, would face litigation.

Private, religious school officials who flew to Boise from northern Idaho for the hearing March 26 argued these scholarships would boost school choice for more students who wanted an alternative to the traditional public school classroom, but didn’t hail from families with the financial means to foot the bill.

“I continue to have to turn away families that can’t afford to pay the full price of tuition,” Chris Finch, principle at Genesis Prep, a private Christian school in Post Falls, told the committee.

But public school groups including the Idaho Association of School Administrators opposed the measure, arguing that Idaho tax revenue directed to the credits would be diverted away from the budgets of already cash-strapped school districts and charter schools.


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