Maryland Education Credit

Maryland Education Credit

Support HB 1262

House Ways & Means

The Maryland Catholic Conference offers this testimony in SUPPORT of House Bill 1262. The Catholic Conference represents the public-policy interests of the three (arch)diocese serving Maryland, including the Archdioceses of Baltimore and Washington and the Diocese of Wilmington, which together encompass over one million Marylanders.

The Maryland Education Credit would provide Maryland’s businesses with a tax credit incentive to assist the state’s public and nonpublic school students and their families. No money is given directly to schools, but rather to nonprofit student assistance organizations, which are registered and held accountable by the state. Business donations will go toward financial assistance for academic tutoring, books, supplies, technology, tuition assistance and special needs services. This bill does not obligate the state to commit funds to the program. It allows for up to $15 million in tax credits to be provided to businesses, but it is completely in the discretion of the Governor and legislature to determine the amount of the credit cap from year to year.

The Catholic Conference maintains that every child has a right to an education that best suits his or her needs. The Maryland Education Credit would allow just that – educational assistance best suited to the education of every child in the State of Maryland – whether they attend a public or nonpublic school. This bill also would provide that assistance where it’s most needed – on a priority basis to low-income children. Thus, this credit would assist the needs of more vulnerable public school students and increase enrollments in struggling nonpublic schools, promoting educational and neighborhood stability in areas in need.

By passing this bill, the General Assembly would also provide a valuable benefit to Maryland’s businesses. The Credit allows any business, corporations and sole proprietorships alike, to receive a tax credit equal to 60% of its donation toward education assistance, providing for business and economic stimulus. Please see the attached sheet for an example of the tax benefit to businesses.

Our state issues approximately 25 different tax credits to businesses every year. Many of these provide a valuable and proven economic stimulus. However, none of those credits provide Maryland’s children and families educational assistance, an investment which should be of paramount importance in this state.

The return to the state on this tax credit should be obvious – it makes sense to invest in maintaining an enterprise in Maryland that offers an extraordinary savings to the state. More than 100,000 students attend Maryland’s nonpublic schools, saving the state almost $1.5 BILLION every year! However, due to rising costs and economic instability, many schools have been forced to close, and enrollments have declined by over 40,000 students in the last decade (please see additional attachment). Nonpublic schools have a stabilizing presence in many local neighborhoods and those closures have a negative economic impact in several communities where there is a critical need to attract businesses and residents.

The decrease in nonpublic school enrollment also has a costly impact on public school budgets, and is a certain factor in the recently-publicized overcrowding problems in Maryland’s public schools. The State of Maryland owes it to ALL of its students to provide the best educational opportunities. The Maryland Education Credit will help stem the tide of nonpublic school closures and help counter the negative impact on both our public and nonpublic school students.

The business investment in education provided by this tax credit program would also allow a greater number of families access to prekindergarten. This year, the Governor and several members of the General Assembly have supported yet another important step toward prekindergarten expansion. The Maryland Education Credit would provide a noteworthy complement to the proposed prekindergarten expansion.

Additionally, it is also imperative to note that the mechanism by which assistance is provided to nonpublic schools under this proposal is completely constitutional, under well-settled standards set by the United States Supreme Court. The program has a valid secular purpose in ensuring that money is given directly to businesses from the state in the form of a tax credit. Financial assistance is given to students by businesses through third-party, federally-approved 501(c)3 nonprofit organizations, and not directly from the state.

In summary, the Maryland Education Credit would:
• Provide educational assistance to Maryland’s most needy students and families
• Expand prekindergarten access to more children and families
• Provide an economic benefit to Maryland’s businesses, while encouraging those businesses to invest in education at the same time
• Help alleviate overcrowding in the state’s public schools
• Preserve the taxpayer savings, diverse educational opportunities and community services and stability provided by the state’s nonpublic schools in a way that is economically stimulating and completely constitutional

It is for all of these reasons that the Maryland Catholic Conference urges a favorable report on House Bill 1262.