Education 102

By Dennis Duggan McMahon

Tuition tax credits for the parents of youngsters in private schools

This could lead to some interesting ramifications and scenarios. Let's suppose that youngster is attending a private school where the tuition is $3,500.00 and the parents pay only $2,000.00 in state income taxes. A partial scholarship may currently make up the difference. These parents could go to any other California taxpayers and ask one of them for a contribution of $1,000.00 and ask another for a contribution of $500.00. This would cost these taxpayers nothing as their state income tax liability would be unchanged. These parents might approach their parents, other relatives, or even their employers. California's corporations might see this funding mechanism as a way to invest directly in their own community. It would be an investment in their employees of the near future. And the parents would have the satisfaction of being able to pay their own way. It is accepted practice for everyone to minimize their taxes. Now the incentives are changed. There may be some who will increase their tax liability so that they may make this direct investment in their children's future.

Throughout California there are a number of business parks. And a few of the companies in the Silicon Valley have their new office buildings set in what they refer to as a campus environment. These would be obvious settings for a real school. Mom or Dad could be working in the immediate vicinity of where their kids are schooling. Employers would compete for new workers at least partially on the basis of their corporate sponsored school. Imagine Cisco College Prep, Oracle Junior High, Silicon Graphics Elementary. (No candidate endorsements are implied; these are only examples.)

The voucher values and the credit values may change over time; presumably they will increase in response to market conditions. Only when the budget is in surplus, and California's debt is truly manageable, will these amounts be reconsidered.