Benavente defends education tax credit

Lt. Gov. Diego T. Benavente expressed his opposition yesterday to a repeal proposal on the Education Tax Credit, citing that it would affect the over 15,000 students currently enrolled in various schools, as well as “significant community institutions” that are at risk of losing financial support if the repeal takes effect.

Rep. Janet Maratita introduced House Bill 14-238 in hopes of repealing the ETC, or Public Law 10-73, citing that the Commonwealth “loses significant revenue” as a result of the law.

In a letter to Maratita, Benavente urged her to reconsider her proposal and “retain the ETC for the benefit of our entire community.”

“There are several ways in which the opportunity to donate ETC dollars promotes educational excellence and opportunity,” Benavente said. “With ETC subsidies, private schools are able to keep tuitions relatively low and make private school education available to a larger segment of the community.”

Benavente said an increase in private schools tuition would place a burden on the Public School System as enrollment would increase beyond its capacity to absorb.

“The availability of private donations promotes competition among public schools for excellence,” he said. “Individual schools where management makes a greater effort to provide quality education will attract a greater share of ETC contributions. The PSS has gone on record that ETC donations give it the ability to fund programs not otherwise available under federal restrictions.”

Further, Benavente said the ETC empowers members of the community to give direct financial support to educational programs of their choice.

“The intent of the existing ETC law was to create an opportunity for parents and other members of the community to provide direct support to schools and other qualified institutions of their choice,” he said. “This direct support is, by way of a dollar-for-dollar tax credit, provides a much more meaningful benefit than a tax deduction, such as is available under IRC 501, which is further limited to a percentage of the taxpayer’s adjusted gross income.”

He said the ETC provides a “more liberal benefit” to both donor and recipient.

“Over the last three years, this administration has consistently taken steps to support and foster educational excellence,” he said, citing PSS’ exemption from budget cuts in 2002, as well as the allocation of an additional $2 million for the Tinian High School project in 2003, and when the administration implemented the Governor’s Education Initiative this year. “We are doing it now by vigorously opposing the repeal of the [ETC].”

Since 1999, a total of $3.3 million has been donated to education under the ETC law.