You wanted information on programs sponsored by other states to encourage support for private schools. Specifically, you wanted information on state tax credits for private scholarship fund donations and state loan programs for textbooks.

SUMMARY

Five states (Arizona, Florida, Iowa, Pennsylvania, and Rhode Island) offer a tax credit for contributions to private scholarship funds. Generally, the contributions must be made to school tuition organizations (STOs), or similar entities, that grant scholarships to needy students and meet other criteria. The programs are detailed below.

According to a 2004 Education Commission of the States survey on state aid to nonpublic schools, it appears that less than half the states in the country provide support to private schools for text books. After a cursory review of surveys on recent private school policy changes, it appears as if there has been no change relating to textbooks. The survey is attached for your use.

STATE TAX CREDITS/DEDUCTIONS FOR PRIVATE SCHOLARSHIP FUND DONATIONS

Arizona

In 1997, Arizona established an individual income tax credit for contributions made by taxpayers to STOs that grant scholarships for students to attend private schools. The cap on credits is $ 500 for individual donors and $ 1,000 for married persons filing jointly. In 2006, the Arizona legislature instituted a similar tax credit for corporations for contributions made to STOs that provide educational scholarships and tuition grants to children from low-income families. The corporate tax credit is capped at an aggregate of $ 10 million in any fiscal year and the aggregate amount of the cap from the previous fiscal year must be annually increased by 20% until 2011.

STOs must award 90% of corporate contributions as scholarships to students whose family incomes do not exceed 185% of the income limit required to qualify a child for reduced price lunches under the National School Lunch and Child Nutrition acts. These grants may be used at private schools that meet Arizona requirements for nondiscrimination policies and teacher background checks. The schools must also administer and make available to the public its students' scores on achievement tests.

Florida

In 2001, Florida made businesses and corporations eligible for income tax credits for contributions to Scholarship Funding Organizations (SFOs) that grant scholarships to low-income students enrolling in nonpublic schools and public schools outside their districts. SFOs must use all of the contributions to cover tuition, textbook expenses, or transportation for children who qualify for the federal free or reduced lunch program. The annual cap on total corporate tax credits (and carryforwards) is $ 88 million in any fiscal year. In 2006, the program was amended to provide for more accountability.

Iowa

In 2006, the Iowa General Assembly created an individual income tax credit for 65% of a contribution made to an STO. The STOs must allocate at least 90% of their annual revenue in tuition grants for low-income children to attend the qualified nonpublic school of their parents' choice. The credits are capped at $ 2. 5 million for 2006 and $ 5 million each year thereafter. The schools must be accredited under state regulations and must annually report to the state enrollment figures and information about the STOs.

Pennsylvania

In 2001, Pennsylvania established a tax credit for corporations that donate money to educational improvement organizations (for grants to public schools) or scholarship organizations. Pennsylvania's tax credit is available for 75% of a corporation's contribution up to $ 100,000 or 90% percent of its contribution, if it contributes for more than one year. Scholarship organizations must use at least 80% of their contributions for scholarships to public and non-public school children to attend the public or private school of their choice. In 2006, the statewide cap on the program was raised to allow businesses to donate up to $ 18 million to scholarship organizations.

Rhode Island

In 2006, Rhode Island created a corporate tax credit for contributions to scholarship organizations (SOs) that provide private school tuition assistance grants for students whose household income is less than 250% of the federal poverty guidelines. (SOs must use 90% of contributions for scholarships for these students). Businesses are eligible to contribute up to $ 100,000 annually. Corporations donating for one year will receive a 75% tax credit, while those committing to two consecutive years will receive a 90% tax credit. Tax credits are capped at $ 1 million per fiscal year.

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