House Bill 2754, the “Rose Friedman Educational Opportunity Act,” would create tax credits for K-12 education expenses and for donations to scholarship programs for low-income or disabled students. The bill, a project of the Oregon Education Tax Credit Coalition, is scheduled for a public hearing by the House Committee on Education next Wednesday, March 25, 2009, at 1 p.m. in Hearing Room E in the State Capitol.
This legislation would ease the burden on Oregon families paying out-of-pocket education expenses, provide education alternatives to Oregon children most in need, and potentially save the state money, freeing up more per-student education funding for students remaining in public schools.
This bill contains two tax credits:
“¢ The Oregon Family Education Tax Credit would give a personal tax credit of up to $1,000 (per child) for any educational expense, such as tuition, supplies or tutoring.
“¢ The Opportunity Scholarship Tax Credit would give a tax credit of up to $1,000 for individual taxpayers ($2,000 per couple filing jointly) and up to $8,000 per business for donations to scholarship programs for low-income or disabled students.
According to an independent economic analysis prepared for Cascade Policy Institute by Dr. Eric Fruits, an economist with Economics International Corporation, HB 2754’s tax credits have potential to save the state of Oregon money. In “Fiscal Impacts of Proposed Educational Tax Credits,” Dr. Fruits states:
“Depending on the level and intensity of corporate participation in the tax credit program, so long as 9,400-14,400 students switch to private schools, then the tax credit would “˜pay for itself.’ “¦Moreover, the break-even number of students represents less than 10 percent of the estimated number of students eligible for scholarships under the proposed credit program.”
While the Oregon Family Education Tax Credit possibly could have a negative impact on state revenues under some scenarios, Fruits projects that “if a sufficient number of students transfer to private schools, then per-student public school spending would increase by $90 to $730.”