Tax Credit Voucher Program Headed For Expansion

By: Lilly Rockwell, The News Service of Florida
By: Lilly Rockwell, The News Service of Florida

Tallahassee, Florida - March 31, 2011 --

In an attempt to boost participation in Florida’s tax credit school scholarship program, a Senate committee approved a bill Wednesday that gives corporate tax information to scholarship groups and boosts how much of a tax credit a company could receive.

The Department of Revenue would be required to provide groups that receive scholarship money a list of the top 100 corporate taxpayers in the state under the bill (SB 1288). Companies that qualify for the tax credit would also be eligible for a tax credit equal to 100 percent of the donated amount, rather than the 75 percent current law permits.

Companies that voluntarily donate money to certain tax credit scholarship groups – providing a tuition voucher for a student to go to a private school - are eligible for a discount on their corporate income and other taxes.

This program has escaped constitutional challenges because it does not directly send taxpayer dollars to private schools. Instead, it gives tax credits roughly equivalent to the amount of a donation to certain school scholarship programs.

This year there were only two scholarship groups receiving tax credit donations. Only one of those is eligible for those donations next year – Step Up for Students.

That one group would be able to receive information about the top 100 corporate taxpayers in Florida and target them to ask for donations. Only groups that receive at least $100 million in donations would be eligible for information about the top taxpayers under the bill.

“I’m very uneasy,” said Sen. Bill Montford, D-Tallahassee, the only “no” vote on the bill. “We are talking about approving something that I would consider to be confidential information, highly sought after by competitors.”

The move is an attempt to boost participation in Florida’s tax credit scholarships. Bill sponsor Sen. Anitere Flores, R-Miami, said there are 8,000 students on a waiting list for tax credit scholarships.

She said it is largely known who the tax credit contributors are and releasing the information does not mean they are required to participate. “The people currently participating know their information will be out there,” Flores said. She said the bill is designed to target the companies that do not know they can contribute.

“The way to clear out the numbers of students on the waiting list is to (get information to) some of these companies who may not know they have an opportunity to use their tax dollars for the benefit of education,” Flores said.

The Florida Education Association, which represents public school teachers in Florida, opposes the bill. Many opponents of the tax credit scholarships believe they siphon money away from the public schools.

“There is some hypocrisy here at work,” said FEA lobbyist Ron Meyer. He said the Legislature wants to have less government involvement in business, but this bill requires more.

Meyer also objected to the list of top 100 taxpayers not being made available to the public. “The public has a right to know which corporations are waiving (their taxes),” Meyer said.

The number of approved tax credits has steadily risen since the program’s inception in 2002. There were 125 tax credits given to 104 companies this fiscal year amounting to $140 million in discounts.

The cap on tax credits this year is $140 million, but a bill passed last year will increase the cap by 25 percent each year whenever the approved tax credits are equal to 90 percent of the capped amount.

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