Can One School Really Do Both?

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HALF OFF YESHIVA TUITION?

By: Kelly Jemal Massry

Looking for affordable yeshiva tuition? Consider moving to Indiana. In a landmark tuition tax credit bill, the Indiana legislature approved a $2.5 million program that opens a new range of possibilities for low-income families wishing to send their kids to a nonpublic school. Although the New York legislature has yet to pass any kind of tuition tax credit, the precedent set by this program could set the stage for a similar bill in the Empire state that could help tackle the escalating tuition crisis for the thousands of Jewish parents saddled with the highest yeshiva bills in the world.

Scholarship Funding

Under the Indiana program, a company or individual giving money to a scholarship-granting organization would receive a state tax credit valued at 50 percent of the amount of the donation. The $2.5 million cap sanctioned by the Indiana government would allow for $5 million in scholarships for children.

Coupled with a federal charitable deduction, the tax savings for such donations could be a huge incentive to donors. For example, if a company donated $10,000 to a scholarship fund for a child to attend yeshiva, the company could reduce their state tax burden by $5,000 while also potentially saving up to $1,950 on their federal corporate income tax. The company’s effective outlay would be only $3,050, while the school would receive the full $10,000. Individuals in high income brackets could see similar savings from such donations.

 

The bill, signed by Indiana Governor Mitch Daniels, was approved by the State Senate and received bi-partisan support from the Indiana House of Representatives. According to its stipulations, students already in private school are generally not eligible for the monetary reprieve, but those entering kindergarten will be, and can apply for it every year through the twelfth grade. This development has important ramifications for Jewish families in the state, some of whom have chosen public school education for their children simply because they couldn’t afford private school tuition. Kindergarteners from religious families could potentially receive a scholarship for their entire day-school tenure.

Agudath Israel, an organization that works tirelessly for Orthodox Jewish causes, had vigorously campaigned for the passage of the bill. Howard Beigelman, a spokesman for the Orthodox Union of America, also commended the passage, saying, “This bold move is good news for families in Indiana and signals other states that tax credits are both politically feasible and good public policy.”

Good News for Garden State Yeshivot

Other states have also dabbled in tax credit programs. Florida Governor Charlie Crist put forth legislation that expanded an eight-year-old scholarship tax credit plan, and in New Jersey, the Urban Enterprise Zone Jobs Scholarships Act would legalize a five-year program allowing children of low-income families to attend participating private schools on scholarship. Twenty-five percent of the scholarships would be awarded to children already in private schools, making the yeshivot of Elizabeth, Lakewood and Passaic happy recipients. The bill, sponsored by Senator Raymond Lesniak and advocated by Agudath Israel of New Jersey and the Orthodox Union, would grant $6,000 in scholarships for students in kindergarten through eighth grade, and $9,000 in scholarships for high school students. The money would be donated by select corporations, to whom the state would then award a 100 percent tax credit. In the meantime, Agudath Israel is lobbying hard for school choice in New Jersey, actively uniting all the yeshivot and day schools in the area, and beseeching parents to fight for this important legislation.

New York’s State of Education

Rabbi Moredechai Biser, Associate General Counsel of Agudath Israel of America, laments that this type of initiative has not yet been enacted in New York State. The Educational Tax Incentive Act, which was sponsored by New York Senator Serphin Maltese and Assemblyman Dov Hikind many years ago, called for a 50 percent tax credit for contributions made to scholarship funds benefiting both public and private schools. This bill was never signed into law.

The state government’s financial assistance for tuition-paying families is relatively minimal, amounting to a few hundred dollars and considering that New York is the yeshiva capital of America, and one of the most expensive places in which to receive an education, many believe that the state is failing its hundreds of thousands of private school students.

For years, the primary obstacle to advancing school choice in New York has been the powerful teachers union which argued that any funding of parochial schools violated the separation of church and state. But recent court decisions along with the passage of bills like the one in Indiana, could demonstrate to New York’s legislators that the time has come to do what’s best for New York’s students – no matter what the special interests think.