Orthodox world pushes tax credits for day-school donations

As families struggle to meet their day-school tuition obligations, the Orthodox community is turning to the government for help in the form of state tax credits for donations to scholarship funds.

About 150 community members came to Teaneck’s Bnai Yeshurun last Tuesday as legislative policy experts representing two Orthodox advocacy groups discussed political solutions to the day-school crisis.

“Public funding of education can have unbelievable possibilities,” said Rabbi Kenny Schiowitz as he introduced the forum. “We may be a few decades late, but we’re not too late.”

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No silver bullet exists, said Howard Beigelman, director of the Orthodox Union’s Institute for Public Affairs. Beigelman and Joshua Pruzansky, director of Agudath Israel of New Jersey heralded corporate tax credits as a possible form of relief.

The Orthodox Union’s Howard Beigelman, right, and Agudath Israel’s Joshua Pruzansky praised corporate tax credits for day school donations at a meeting in Teaneck last week.

School vouchers, a failed goal of President George W. Bush’s administration, are no longer under consideration, Beigelman said. The idea has long been mired in controversy, particularly for potential violations of the separation between state and religion. Tax credits, however, are “100 percent constitutionally kosher,” Beigelman said.

Under a corporate tax credit program, he explained, a company would make a donation to a central non-profit fund and receive a tax credit. The fund would then distribute the money to families that meet its requirements. Donors could earmark the funds for students in specific schools. Since the money would not go to the school directly, there is no conflict between religion and state.

According to the Agudath Israel, 27,155 students attend 114 Orthodox day schools in New Jersey, an increase of 37 percent since the 2003-04 school year, when the organization last took a census of students.

This year, the state is expected to allocate $24,080,000 to New Jersey’s private schools, with $3,780,000 going to day schools.

The New Jersey legislature has been discussing the creation of a corporate tax credit program since last year. Senate bill 1607, also known as the Urban Enterprise Zone Jobs Scholarship Act, would create a pilot program in the Department of the Treasury, which would provide tax credits for contributions to scholarship programs for public and private schools. If approved, the act would set up pilot programs in Lakewood, Paterson, Elizabeth, Newark, Orange, and Trenton.

Funds from the program would be available to children from homes with income that does not exceed 2.5 times the federal poverty level, a requirement that many Orthodox families could meet, given their typically large sizes and tuition bills, Beigelman said.

In the 11 states where similar programs exist, legislative support has been high on both sides of the aisle, and day schools have reaped the benefits of millions of dollars, Beigelman added.

In 2007, Bank of America made a $200,000 donation to two day schools in Rhode Island through the Rhode Island Scholarship Tax Credit program. Last year, two day schools in the Providence area with a total enrollment of 63 students raised about $10,000 per student through the program, Beigelman said. A similar program in Pittsburgh has raised more than $8 million since 2001.

Pruzansky lamented a lack of political will to move the bill forward in New Jersey.

“The leadership doesn’t have the courage to post the bill,” he said of 1607. He cast blame on the New Jersey Education Association, which he accused of swaying politicians with hundreds of thousands of dollars in political contributions.

Pruzansky implored attendees to begin meeting with their representatives to push through the bill.

“If we go out there, there might be a chance,” he said.

Many states allow for both corporate and personal tax credits, but New Jersey currently does not allow for individual tax credits for any charitable donations. Sens. Thomas Kean Jr. and Richard Codey introduced a bill in the Senate last year to change that, but it has yet to move out of committee. The OU is focusing its energies on creating a corporate option in the Garden State, Beigelman told The Jewish Standard after the forum, although the organization also supports Kean and Codey’s bill.

Beigelman hopes to see the Urban Enterprise Zone Jobs Scholarship Act pass this year, to be implemented in the 2010-11 school year. “If they see it’s important to their constituency, they will do this,” Beigelman said.