INDIANAPOLIS -- Gov. Mitch Daniels recently proposed a new state tax credit as part of his budget package to encourage charitable donations to fund scholarships for lower-income children.
The program will also result in net savings to the state and taxpayers.
The Indiana School Scholarship Tax Credit program would provide a 50 percent state tax credit for charitable contributions to qualified scholarship programs serving lower-income families.
Children in grades kindergarten-12 could qualify for scholarships to help attend the public or private school of their choice.
The program passed the Indiana Senate with bipartisan support earlier this spring on two occasions.
A May 2009 study by researcher David Stuit, a fellow with the Friedman Foundation for Educational Choice, found that a scholarship tax credit would result in significant net savings for the state.
For example, the analysis model found that at an average scholarship of $2,500 or less, the state would realize at least $13.4 million in net savings alone in the first year.
"In a fiscal crisis, the program could provide the state with much needed savings and struggling families with much needed choices," Executive Director of School Choice Indiana Network Jeff Brantley said.
"It's a win-win proposal for kids, taxpayers and budget policymakers," Brantley continued.
Scholarship tax credit programs are funded through private donations, with a tax incentive to encourage charitable giving.
They should not be confused with "vouchers," which directly finance private school education with public dollars.
Similar scholarship programs exist in several states, including Pennsylvania, Florida, Iowa, Georgia and Arizona.
Earlier this week, Florida governor Charlie Crist signed a bipartisan expansion of the state's scholarship tax credit program.
For more information on the Indiana School Scholarship Tax Credit, call 317-414-6790 or visit www.inscholarships.com.=