Republican-Led Senate Passes Controversial Education Tax Credit

State Senator Dean Skelos, the Republican majority leader. (Photo:  Matthew Cavanaugh/Getty Images)

State Senator Dean Skelos, the Republican majority leader. (Photo: Matthew Cavanaugh/Getty Images) (Photo: Matthew Cavanaugh/Getty Images)

The Republican-controlled State Senate passed a controversial bill today that would give a tax credit to people and companies donating money to public schools and private school scholarship funds, setting up a battle with Assembly Democrats.

The tax break, known as the education investment tax credit, is backed by Gov. Andrew Cuomo, Republicans in support of private schools and charter schools, and State Senator Simcha Felder, a Democrat who caucuses with the GOP.

Critics, particularly the New York State United Teachers, call it a backdoor voucher program.

“The Education Investment Tax Credit would give new educational options to parents and help schools and students succeed,” said State Senator Dean Skelos, the Republican majority leader. “This measure will continue to be a priority of our conference during state budget negotiations.”

Mr. Felder, who represents a large Orthodox Jewish population, praised the legislation as a way to aid the many residents in his Brooklyn district who must pay hefty tuition to attend private yeshivas. State Senator Martin Golden, a Brooklyn Republican representing a district with a large number of Catholic institutions, also hailed the bill.

“New York’s children deserve the best education possible, whether its desperately needed educational materials for public or charter school kids, or alleviating the financial burden for tuition-paying families,” Mr. Felder said.

The bill provides a maximum tax credit of 90 percent of individuals’ and corporate franchise taxpayers’ qualified contributions, capped at $1 million plus any amount carried over from a prior year. Eligible contributions include donations to public schools; school improvement organizations or local education funds that provide support to public schools; and qualifying educational scholarship organizations.

The credit is capped at $150 million for 2016, $225 million for 2017 and $300 million for 2018 and thereafter. Taxpayers would not be allowed to use a qualified contribution as both a charitable itemized deduction and a credit against their New York State income tax.

Seventeen labor unions back the tax credit, saying it would help children of their members. But the teachers union, an influential force in Albany, has called it a thinly disguised voucher program redirecting state revenue to private schools.

In March, Richard Iannuzzi, the NYSUT president, told the New York Times the tax credit is a “fundamental and disgraceful attack” on public school pupils.

He attacked backers of the bill who have “chosen their benefactors, hedge funders and financiers over the 97 percent of New York’s children who attend underfunded public schools.”

Mr. Iannuzzi holds far more sway in the Assembly, where Speaker Sheldon Silver enjoys a close relationship with his union. Mr. Silver does not support the bill.

Republican-Led Senate Passes Controversial Education Tax Credit