The new state income-tax deduction for parents of private school children is the most generous in the nation, according to Governing Magazine, a respected national publication covering state and local government.
The deduction also might be the most controversial in the nation because it has no income ceilings on the parents, unlike the current tax deduction in Wisconsin law for college and post-secondary education. The new deduction was included in the budget law signed June 30 by Gov. Scott Walker.
Under the new law, a parent may reduce his or her taxable income by $10,000 for each child in a private high school and $4,000 for each child in a private elementary school. The high school provision is about 50 percent higher than the deduction already allowed for college tuition.
Tax deductions reduce the amount of income upon which a tax rate is applied. If the effective rate were 6 percent, the $10,000 deduction would mean a parent would save $600 in state tax.
State School Superintendent Tony Evers is livid about the move, which the non-partisan Legislative Fiscal Bureau estimates will reduce tax revenues by $30 million annually while public schools are struggling financially.
Evers said it is has been called "welfare for the rich" in other states and he notes the provisions were added to the budget bill with a "middle of the night" motion by the Legislature's Joint Finance Committee. That budget committee, like the full Legislature, is controlled by Republicans.
The college tuition tax deduction had been capped at $6,543 in 2012 and is limited to single taxpayers with less than $60,000 in annual income and couples with combined incomes of less than $100,000.
"I find it questionable that, in this economic environment, the Legislature" moved to "commit additional limited tax dollars to further subsidize private elementary and secondary education for those who can already afford it, while leaving caps on the deduction that supports higher education and worker training," Evers says.
Democrats love to say that Republicans are the party of the rich. If Republicans fail to add income limits, Democrats will gain a significant campaign issue in 2014. But scaling back a tax break is difficult for any politician to do.
Evers asked for a veto of the tax-deduction provision, but Walker rejected the idea. Additionally, the governor and Evers have clashed over expansion of the voucher program for low- and middle-income students. The governor and Republicans contend it will help children.
The budget bill expands the program statewide but limits it to 500 more pupils this fall and 1,000 the following school year. Walker did use his veto power to close a loophole, keeping the two-year expansion limits.
Prior to signing the budget bill last week Walker told reporters that "some day in the future" he will seek approval of expanding the statewide reach of the voucher program.
Evers calls the statewide expansion of the voucher program seemingly aimed at aiding private and religious schools "unproven and financially reckless."
"Introduced in the middle of the night with no public hearings, no public testimony, and no public fiscal analysis, this provision sets up a second publicly-funded school system guaranteed by law," says Evers, estimating the cost will grow to more than $1 billion. In addition he adds there are no provisions in the law for additional accountability for voucher schools.
Maybe there was no public input, but powerful forces were at work. Three former speakers of the Assembly, all of them Republicans, were lobbying in behalf of the private school operation. Wisconsin's Catholic bishops also had weighed in, urging the expansion of the voucher program.
- Matt Pommer, a 35-year veteran of covering state government in Madison, writes the weekly State Capitol Newsletter for the Wisconsin Newspaper Association. His column is published Monday in the Times.
The deduction also might be the most controversial in the nation because it has no income ceilings on the parents, unlike the current tax deduction in Wisconsin law for college and post-secondary education. The new deduction was included in the budget law signed June 30 by Gov. Scott Walker.
Under the new law, a parent may reduce his or her taxable income by $10,000 for each child in a private high school and $4,000 for each child in a private elementary school. The high school provision is about 50 percent higher than the deduction already allowed for college tuition.
Tax deductions reduce the amount of income upon which a tax rate is applied. If the effective rate were 6 percent, the $10,000 deduction would mean a parent would save $600 in state tax.
State School Superintendent Tony Evers is livid about the move, which the non-partisan Legislative Fiscal Bureau estimates will reduce tax revenues by $30 million annually while public schools are struggling financially.
Evers said it is has been called "welfare for the rich" in other states and he notes the provisions were added to the budget bill with a "middle of the night" motion by the Legislature's Joint Finance Committee. That budget committee, like the full Legislature, is controlled by Republicans.
The college tuition tax deduction had been capped at $6,543 in 2012 and is limited to single taxpayers with less than $60,000 in annual income and couples with combined incomes of less than $100,000.
"I find it questionable that, in this economic environment, the Legislature" moved to "commit additional limited tax dollars to further subsidize private elementary and secondary education for those who can already afford it, while leaving caps on the deduction that supports higher education and worker training," Evers says.
Democrats love to say that Republicans are the party of the rich. If Republicans fail to add income limits, Democrats will gain a significant campaign issue in 2014. But scaling back a tax break is difficult for any politician to do.
Evers asked for a veto of the tax-deduction provision, but Walker rejected the idea. Additionally, the governor and Evers have clashed over expansion of the voucher program for low- and middle-income students. The governor and Republicans contend it will help children.
The budget bill expands the program statewide but limits it to 500 more pupils this fall and 1,000 the following school year. Walker did use his veto power to close a loophole, keeping the two-year expansion limits.
Prior to signing the budget bill last week Walker told reporters that "some day in the future" he will seek approval of expanding the statewide reach of the voucher program.
Evers calls the statewide expansion of the voucher program seemingly aimed at aiding private and religious schools "unproven and financially reckless."
"Introduced in the middle of the night with no public hearings, no public testimony, and no public fiscal analysis, this provision sets up a second publicly-funded school system guaranteed by law," says Evers, estimating the cost will grow to more than $1 billion. In addition he adds there are no provisions in the law for additional accountability for voucher schools.
Maybe there was no public input, but powerful forces were at work. Three former speakers of the Assembly, all of them Republicans, were lobbying in behalf of the private school operation. Wisconsin's Catholic bishops also had weighed in, urging the expansion of the voucher program.
- Matt Pommer, a 35-year veteran of covering state government in Madison, writes the weekly State Capitol Newsletter for the Wisconsin Newspaper Association. His column is published Monday in the Times.
