Education tax credit benefits Idaho's schools

It’s widely known that Idaho does not adequately fund public schools. Less known is how individuals and businesses across the state reach into their own pockets to invest in the schools.

Now a key incentive for those private donors is threatened by a proposal of Rep. Heather Scott. Scott is attempting to kill the education tax credit for donors to the Panhandle Alliance for Education and similar independent, nonprofit school foundations, including those in Coeur d’Alene and Boise.

Scott’s action is disappointing and perplexing. The tax credit has been widely supported for years and Scott has had access to detailed information about how it works and how it benefits schools. Every question she has asked about PAFE — and some she hasn’t — has been answered.

In past years political support has been widespread and bipartisan. Last fall, the Idaho Association of School Boards unanimously favored a resolution in support of the effort to make the tax credit permanent. Former Rep. George Eskridge was a previous sponsor and Sen. Shawn Keough, R-Sandpoint, is working to preserve existing language this year.

How does it work? The tax credit is a maximum of $500 for an individual; $1,000 for a couple. The credit is for half of the value of the gift, up to the maximum. If an individual gives $1,000 he or she gets a $500 tax credit; a couple that gives $2,000 gets a $1,000 tax credit. This is a significant incentive that empowers citizens to support their schools.

What is most troubling about Rep. Scott’s proposed legislation is that she would eliminate the very language that makes the tax credit most effective — its use by independent nonprofits operated exclusively for the benefit of elementary and secondary schools. These organizations, such as PAFE, have as their sole mission raising money for local schools. While school administrators are busy running a school district, citizen board members of the school foundation are raising money for the schools.

PAFE’s partnership with the district has been formalized through a resolution passed by the School Board. The benefit to the district and its patrons are significant:

n At least $75,000 in teacher grants every year for over a decade;

n $540,000 over several years to bring in reading consultants to work with every teacher — a strategic partnership that led to district scores among the highest in the state;

n Seed money for a guidance counselor to help students apply for college. The district incorporated the program and now has an exemplary record of students going on to post-secondary education.

n The launch of “READY! for Kindergarten!” which helps parents become the first, best teachers of their child. Data shows children of “Ready” families ARE ready and have higher 3rd grade reading scores.

One of the important goals of PAFE is to build an endowment to assure that funds will be available for the school district on into the future. It is a model of financial sustainability in which the principal is preserved as interest and dividends are used to carry on the mission. PAFE was fortunate to have generous support from Coldwater Creek in past years. The board used some of that money to fund the endowment and that is now paying off as PAFE continues even past the bankruptcy of Coldwater Creek.

As organizations like PAFE raise money for endowments and school-related projects, Idaho’s education tax credit is a valuable incentive for potential donors. Nonetheless, it’s fair to ask how anyone can be assured the money is spent by PAFE, or any of the other school foundation as promised.

Oversight starts with the tax credit statute itself. The foundation has to be a recognized charity that supports education. It has to be organized “exclusively for the benefit of an educational institution.” And it has to be designated by school trustees as the sole supporting organization. If PAFE, for example misspent its money, the school trustees would withdraw support. Also, anyone can report abuses to the state attorney general who has broad authority to monitor and sanction charities. So far, no one, including Rep. Scott, can point to any abuses by school foundations.

The record is clear and transparent. The education tax credit benefits schools. Statewide, the estimated annual benefit is $21-million.

I urge anyone who agrees that the tax credit should continue for PAFE to contact Rep. Scott and Rep. Sage Dixon.

BILL BERG

Sagle