The bill seeks to limit the double benefit of charitable contributions, which Sewell explains “allows the wealthy to turn a profit on donations to private school voucher organizations.”
“As the daughter of two long-time educators and the proud product of Selma public schools, I know the power of public education,” said Sewell. “Today’s legislation would stop wealthy donors from cheating our tax system and diverting dollars away from children in our public schools.”
Sewell continued, “Under current law, wealthy donors in states like Alabama can turn a profit on contributions to private school voucher organizations by claiming both state and federal tax benefits. At a time when our public schools are short on resources and Congress is struggling to find funding for important programs such as the Individuals with Disabilities Education Act (IDEA), we have a responsibility to close this tax loophole and protect public funds for public schools.”
Sewell is referring to tuition tax credits (TTCs), which are offered to individuals or corporations in 18 states across the country who contribute to Scholarship Granting Organizations or school voucher nonprofits. In seven of these states — Alabama, Arizona, Florida, Georgia, Montana, Nevada, and South Carolina — the tax credit is dollar for dollar. In addition to receiving a full refund from their state, these donors qualify for a federal tax deduction on the same donation. Sewell wants to close the loophole in the tax code which allows this and disincentive the diversion of federal dollars from public schools.
Under Sewell’s bill, savings created by the Public Funds for Public Schools Act could be reinvested in the school system to offset costs for K-12 education programs, like those under the Individuals with Disabilities Education Act (IDEA).