PROVIDENCE — Rep. Robert Lancia (R-Cranston) announced legislation on Tuesday to expand the corporate tax credit scholarship program, which allows corporations and small businesses to obtain state tax credits for donations made to scholarship funds for students with financial need. If passed, the legislation would increase the amount of scholarship funds available to Catholic and other private school students through tax-deductible corporate sponsorships.
“I’m very proud to introduce this legislation because I am an educator myself as well as a proud pastor,” Lancia, a retired American Baptist pastor, told a meeting of Catholic school educators at the chancery last week.
The corporate tax credit scholarship program was introduced in 2006 to offer a tax credit beyond the federal tax deduction for charitable contributions for donations supporting K–12 education. Participating businesses make a one or two-year commitment to donate to one of six scholarship-granting organizations (SGOs) that serve the state’s religious, independent and charter schools. Donations intended for students at Rhode Island’s Catholic schools are distributed through Financial Aid for Children’s Education (FACE of RI), an SGO administrated by the diocesan Catholic School Office.
According to Edward Bastia, business administrator for the Catholic School Office, the program has received strong interest among local businesses but is restricted by a state-set limit on available tax credit, which is currently capped at $1.5 million. The limit has increased only once since the program’s creation and falls far below annual demand, with only 22 of the 107 businesses that applied last year selected to participate. In contrast, the calculated need of students attending Catholic schools has increased by 122 percent since 2006 and currently exceeds $24.7 million.
“The need is growing at such an alarming rate which means that those families who are choosing to enroll their children in a Catholic school of their choice have deep and alarming need,” Bastia said.
Legislation submitted to the General Assembly would increase the tax credit limit to $5 million and provide for an additional increase of 15 percent following any year in which applications for the program exceed the limit by at least 10 percent. The raised limit would allow businesses and SGOs to expand a partnership that, according to Bastia, is highly sought after by both potential donors and students in need but lacking government support.
“That cap is so small and there are so many corporations looking for this that it sells out in one day,” he said, referring to the application period for potential donors, which opens and closes yearly on July 1 due to excessive demand. Selection for the program is decided by lottery later in the month.
“Think of what it would mean for you if we could make more Catholic schools available and affordable for children and their families,” he added.
Rep. Lancia is optimistic about the bill’s outcome but emphasized the importance of testimony from families impacted by the program at the committee hearing, which has not yet been scheduled.
“We have got to get people up there testifying, that’s the key to the bill,” he said. “I’ll tell you, [it’s] very powerful when you have a young person who comes up and testifies how this affects their lives.”
Lancia said the committee would also consider the program’s fiscal impact as well as the graduation and college-bound rates of students at affected schools. Data compiled by the Catholic Schools Office based on the average cost-per-student in the state’s public schools as released by the Department of Education indicated the corporate tax credit scholarship program provided a $6.7 million savings to the state in 2015.