5/5/2000

Education Funding with Tax Credits

I recently received the following letter from a reader who describes a novel incentive for businesses and individuals to invest in education through the use of tax credits.

Dear Beth:

A tax credit for both companies and individuals for investments in education and training would be fairly simple to administer through the adult education programs in high schools. Typically those programs charge just about enough to pay the instructor.a modest increase to make it a black ink operation would be in order. Then we have in place the infrastructure to support both decent programs and a means of telling the IRS that the program was both valid and worthy of the tax credit.

The leverage of the companies can result in business focused training being provided at far below what is currently charged. (A two-day course in Excel at a training center can cost as much as $300, not counting time away from the job, while the same material covered in a 2 hour per week session given over 8 weeks costs about $50 in a high school adult education program.)

Paradoxically, adult ed instructors are paid more than their training center counterparts, so there would be no problem finding instructors. I would say the same course would need to be about $75 to convince the finance committee to open up more classrooms at night and on weekends.

The tax credit comes very easily. A receipt is given, which gets filed with a tax return allowing for the full price of the course to be credited against tax liability. A single course for $75 plus a $20 book means $95 less tax paid (or a higher refund). Curriculum and content decisions are still made by the local school system, so no additional burden is placed on the state education department.

The math works like this: If someone is able to spend $95 on a course that ultimately leads to a merit pay hike of $1 per hour, then almost all of the credit is recovered by increased payroll taxes. That's on the employer/employee side.

On the parental side: While it would be difficult to construct a total cost to savings scheme for educating parents, just imagine what it would save if all parents were capable of helping their children with homework.

Perhaps not many people in CT would jump at the chance, but if we could build up to a point where 1,000,000 people in our state were taking just one course a year at a cost in tax credits of $100,000,000.actually just a redistribution of money from state to local schools and far less than the take from the casino slot machines.then that's a revolution.

Think of an additional 5,000 people in the state learning Spanish, another 5,000 learning accounting or how to use computers, how to write effectively or take lessons in civics. And then how many become continuing education students once the dam has burst, and they find themselves headed toward community colleges and universities. We could get the literacy rate up above 70% again.

Our school buildings are empty 60% of the time, and our adult population is spending its evenings watching Regis Philbin give away money to people no better than they are. There sit thousands of potential instructors, languishing away their evenings and hundreds of others waiting tables because the day job doesn't pay enough. There is no reason we can't fix that.

What do you think of the idea?

Please send questions or comments to bbruno@snet.net.