Delaware Tax Credit Would Empower Parents

Published July 1, 1999

Families with children in public schools, at private schools, or schooled at home could receive a tax credit of up to $3,000 for the education expenses they incur, under a three-tier education tax credit proposal that Delaware State Representative Deborah H. Capano plans to introduce into the state legislature.

Capano’s bill would help parents to pay for the costs of tuition, educational software, books, transportation expenses, and other fees imposed by public and nonpublic schools.

Describing her proposal to reporters on May 26, Capano said the tax credit was designed to give those who know and care the most about their children–parents–new decision making power in matters relating to their children’s education.

The tax credit would help different parents in different ways: For public school parents, it could help pay for education_related computer software; for home schoolers, it could help with books or lab fees; and for nonpublic school parents, it could help with tuition expenses.

“The idea here is to help parents manage the various costs of their children’s education and to do so with an emphasis on fairness and flexibility,” explained Capano.

Families with adjusted gross incomes of $75,000 per year or less would qualify for a $3,000 tax credit. Families with annual incomes between $75,000 and $85,000 would qualify for a $2,000 tax credit, while those with annual incomes between $85,000 and $100,000 would qualify for a $1,000 tax credit. Families with higher annual incomes would not be eligible for the tax credit.

Although the tax credit would result in reduced state tax revenues, it also could produce savings for the state, since the credit may be enough to encourage parents to transfer their children from public to private schools. Capano notes that the net cost of her proposal, which she estimates at roughly $200,000 a year, is very modest compared to the $637 million the state spent on kindergarten through grade 12 education this year alone.

The education tax credit, she says, “is a perfect illustration of how creative thinking can provide a huge bang for the buck.”

In the past, similar school choice legislation has been approved by the Republican majority in the House of Representatives, but the Democrat-controlled Senate has stymied bills involving school vouchers or education tax credits.