On Thursday, June 3, 2010, the North Carolina House rejected, by a vote of 51 to 65, a procedural motion to allow the House to consider the education expense credit described below. Democratic leaders urged their colleagues to reject this annual savings to state and local government of $51 million. The parents of an estimated 11,521 students were thereby effectively prevented from choosing the best school for their child. Two days earlier the House Finance Committee rejected this proposal 13-16. The floor amendment incorporated the provisions of HB 1988.

HB 1988, “Tax Fairness in Education” is a bill to allow parents in North Carolina to choose which school is best for their child. It allows an individual income tax credit for part of the expense of each eligible child who is educated in a nonpublic school or home school. The bill would go into effect in January of 2011.

Who is eligible? Enrollment is limited to taxpayers whose NC taxable income is less than $100,000 (married, filing jointly). $80,000 (head of household), $60,000 (single) or $50,000 (married, filing separately). The student must have been enrolled in public school the previous year (i.e. Fall Semester then Spring Semester or Spring Semester then Fall Semester) and the student must be under the age of 18.

An individual tax credit would cost taxpayers of North Carolina $2,500 per student per year. A typical child in the public school system costs taxpayers approximately $6,935. The savings are obvious.

A report on the fiscal impact of HB 1988 was prepared by the non-partisan Fiscal Research Division of the North Carolina General Assembly. The note states that the passage of this bill would result in $51 million dollars in annual savings for the year 2011-2012 and subsequent years. Using the middle range estimates, about 11,500 students will be provided alternative education through these tax credits. The public school system will be able to save time, energy and resources – resulting in more money to spend on fewer public school students.

Allowing tax credits for children who attend private schools or home schools will provide a small reprieve for those children whose circumstances have drawn them away from the public school education to which they are entitled. This amendment would open the door for parents to explore educational opportunities available to their children and select the choice that best fits the needs of their family.