Education Investment Tax Credits – Breaking the Public School Monopoly
Religion & Liberty Online

Education Investment Tax Credits – Breaking the Public School Monopoly

Since 2000, New York City residents have observed the shut-down of 91 Catholic schools. These closures are typically the result of parents’ inability to pay tuition costs. This presents not only a problem to the would-be students, but to the public-at-large. The civic benefits provided through a Catholic education amount to a public good. Graduation rates for Catholic schools top those of public institutions, propelling more students to college, creating future community leaders. A robust civil society such as this is contingent upon strong educational institutions, for which it is critical to incentivize the public to invest.

The Education Investment Tax Credit bill would have curtailed this problem by providing a dollar-for-dollar tax credit for each charitable donation to any private or parochial school scholarship fund, including Protestant and Jewish institutions. However, the mandate perished in the back room of the state legislature, despite support from both parties as summer recess commenced. The use of an incentive structure would have provided up to $300 million to the neediest children in the state of New York. Half of this funding would have been designated to donations to public schools for the arts, music, and athletics so as to eliminate “pay-to-play” costs to parents.

This tax credit would not only have been an investment in the future of at-risk students, but an investment toward a community’s future. In this respect, New York residents would be incentivized to endow education philanthropy, in exchange for lower taxes. Individuals would have the autonomy to support private or parochial institutions of their choosing, empowering the individual to decide what is the best use of their assets.

Non-Christians have come to be integral supporters of the cause. The late philanthropist Robert W. Wilson, an admitted atheist, is the single largest donor to the New York Archdiocese’s Inner-City Scholarship fund, having contributed over $30 million. After learning that superior results could be achieved at a low cost, he too saw the intrinsic social value remarking that “I thought seeing these schools just disappear would be intolerable.”

Cardinal Timothy Dolan lamented the defeat of this proposed legislation: “[I]t is amazing and even a little insulting that [the state] can’t find less than 0.1% of the budget to help fund scholarship organizations that assist the 10% of New York kids outside the public school monopoly.” Without a solution, the rising costs of education will continue the inevitable closures.

Analysis by the New York Times contends that Catholic school closings have mounted in recent years because classes are no longer taught by low-paid nuns and because large congregations are unable to contribute enough to keep tuition affordable for families. In an attempt to combat this, Catholic education officials have established annual funds to provide scholarships to low-income, vulnerable areas. But unfortunately, this is not enough to keep school doors open and will inhibit talented youth from reaching their highest potential.

Supreme Court Justice Sonia Sotomayor, a product of a Bronx area Catholic school, sees them as “a pipeline to opportunity to generations,” which has given “people like me the chance to be successful. It provided me and my brother with an incredible environment of security. Not every school provides that.” Sotomayor’s childhood elementary school will be closing this year, prompting her to raise concerns for how this will affect the community:

The worst thing is, these kids could lose their faith in the adults around them…. Children need to feel secure. This makes it worse. These kids are going to carry this trauma with them for the rest of their lives.

Neglecting a means to provide faith based education to the youth is one that will only contribute to the cycle of poverty and violence in America’s inner-cities. The Catholic Review observes this trend in New York’s Midwestern counterpart. “[W]hile crime fell in Chicago between 1999 and 2005 by 25 percent in most police beats in the city, it only fell by 17% in those neighborhoods where a Catholic school closed.” Catholic schools serve as an added security construct for neighborhoods trying to solidify social order.  The Manhattan Institute’s Sol Stern explains how Catholic education is fundamentally entwined with the American civic culture tradition:

As the city’s public schools trivialized their curricula and embraced brain-dead multiculturalism, most Catholic schools held fast to the ideal that minority children could share our civilization’s intellectual and spiritual heritage. Indeed, they are among the last urban schools that embrace the idea of a common civic culture. Every time one of them dies, the city that they have served so well suffers another rent in its civic fabric.

Catholic schools have emerged as an investment for low-income, at-risk youth toward becoming civic minded adults. Parochial schools instill moral teachings, which directly translate into positive externalities in society. The partnership between Catholic schools with parents and the community forges an educational institution that steps beyond its traditional role and establishes an improved social order in the public square.

The Education Investment Tax Credit could have been an important investment in saving America’s inner cities from a civic disaster propagated by high poverty and increased crime rates. Catholic schools have served the urban poor well. It is within the best interest of a state to ensure that stable institutions continue to prosper in a way that will promote a society characterized by virtues empowering the individual. Investment in human capital is the foundation for a strong civil society, when paired with religious values, guided by moral principles.

Jacqueline Derks

Jacqueline Derks is a 2014 Charles G. Koch Fellow at the Acton Institute. She attends New York University, majoring in Politics and Middle Eastern and Islamic Studies.