There is no question as to State House Republican Tim Ackert’s interest and dedication to education. He is the Ranking Member for his party on the Education Committee and his resume shows a history of involvement with education. Tim has a strong desire to improve educational opportunities but his latest proposal (HB-6178) needs some scrutiny.
We have all heard the expression, “the road to hell is paved with good intentions”. So let’s take a look at the path Mr. Ackert wants to walk, as he offers what is no doubt a proposal of good intention.
HB-6178 is An Act Establishing A Tax Credit For Donations To School Districts it is Tim’s proposal and his alone, with no co-sponsors. Tim is asking to amend State Statutes to provide a tax credit to individuals and businesses that donate money, supplies or equipment to local or regional boards of education. On the surface this sounds wonderful but below the surface the idea has trouble written all over it.
This is not a tax deduction proposal, it is a tax credit, and there is a major difference. A deduction allows for the donation to be deducted from calculations to determine the amount of money from which taxes will be paid. A tax credit on the other hand is a direct deduction from the amount of taxes due. The impact could be enormous and devastating to some communities and equally devastating to state government.
This proposal opens a “can of worms” a “Pandora’s Box” when it directly diverts tax dollars to a specific line item without a vote of the community but rather by the actions of individuals. It would allow for special interests to divert tax dollars to special causes. If we applied the same thinking to other issues we could see diversion of funding for hunting, political races or environmental protection.
To illustrate the danger let me provide a scenario. The Town of Coventry votes in May on a budget that is developed largely from Dec. to March. If the budget were to pass in May it would be based on anticipated tax revenue to be collected starting in July. If however, a tax credit were to be allowed where you could donate money directly to Boards of Education in lieu of taxes the amount collect could be substantially altered.
In many towns the largest employer is the Board of Education, like it or not those employees are a special interest group that could easily wait until the budget is passed then divert a huge percentage of tax dollars to their employer. This action could severely harm the general government budget and in fact require layoffs and major cuts in services.
The problem gets exacerbated if other top taxpayers decided to also follow suit. Major companies could as a public relations matter suddenly decide not to support government at all and divert all tax money to educations.
There is more to government than education, we still need, roads, bridges, fire and police departments not to mention other vital services. While the example above points out the problem if a tax credit is allowed on local taxes the same holds true for state taxes.
This proposal is a case of good intentions with risky actions, potentially opening the door to financial disaster. Opening a door to diversion of tax dollars by individuals and businesses, while well intentioned, is not good policy. The allocation of tax dollars should continue to be a matter voted on by the taxpayers and or their representatives.
This series will continue with the next Opining Quill