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Why I Oppose the Education Investment Tax Credit

by New York State Assemblywoman Ellen Jaffee

EllenJaffee20140514As an outspoken advocate for high-quality public education, I strongly oppose the $100 million Education Investment Tax Credit legislation proposed by the Governor Cuomo (A2551/S1976). This legislation would divert millions of dollars to private schools, reduce the tax liability for corporations and the wealthiest New Yorkers, and increase the shameful inequity that exists in school districts and communities across our state.

Since 2008 public schools have struggled with billions of dollars in cuts and are dipping into their reserves. Under the Campaign for Fiscal Equity lawsuit and the Gap Elimination Adjustment, the state owes our public schools $5 billion. By diverting millions of tax dollars from the General Fund that supports public schools and services, the EITC would severely impact student learning and achievement at the same time the state is insisting on an unsustainable tax cap and requiring public schools to increase testing and mandates.

Although it is suggested that $50 million of the EITC would be earmarked for public education, there is no requirement that the money will be distributed to high-need districts. And only $25 million will go to children from low-income households. Furthermore there is no regulation or fiscal oversight attached to the allocation of these monies.

The EITC would not help the largest percentage of low-income or even middle class families; it would cut taxes for corporations and the wealthy. The EITC would provide an unprecedented proportion of tax reduction for donations to private schools boosting the current allowance for a charitable donation from 8.82 percent under the existing tax code to a whopping 75 percent reduction taken as a tax credit.
Under the current tax code allowance for a charitable deduction, and at the highest contribution amount, those earning $10 million in adjusted gross income could donate 10% or $1 million to charity; at 8.82 percent they would qualify for a tax deduction of $22,050.

However, the EITC, would reside outside the existing tax code, not as a charitable deduction but as a tax credit increasing to $750,000 the allowable reduction in adjusted gross income. In addition, the charitable deduction of 8.82 percent could still be taken, further reducing taxable income for the wealthiest.

I deeply respect the right of all families to educate their children in a manner they deem appropriate. However, public education is a constitutionally mandated function of state government, obligated to serve all children, so that every child has equal opportunities to learn and succeed. Public education is the cornerstone of our democracy, a tool for bringing together diverse communities and forging the common good. It is the state’s responsibility to adequately fund our public schools, not to subsidize private schools. I will continue to fight for a vibrant, well-funded public education system that invests in every child.

Assemblywoman Ellen Jaffee (D-Suffern) representing New York’s 97th District.

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