May 19, 2003

Senate File 1419: Scholarship Tax Credit

Senator Gen Olson (R), District 33.

A companion bill to House File 301, Senate File 1419 permits taxpayers to donate up to one thousand dollars to establish scholarship funds for poor families, and then take a seventy-five percent tax credit for this donation. Thus, a one hundred dollar donation only costs the taxpayer twenty-five dollars.

04/07/2003 Introduced.
04/07/2003 To Senate Committee on Taxes.
04/14/2003 Scheduled for committee hearing but not heard.
05/19/2003 The 2003 regular session of the Minnesota Legislature adjourned on May 19, 2003. Unfortunately, SF 1419 is now dead.

Action Requested:

HSLDA's Position:
Strongly support. Minnesota has some tax relief for low-income families who use secular educational materials. To date, a low-income family in Minnesota still finds it very difficult to educate a child at home. By creating scholarship tax credits, Minnesota homeschoolers can finally provide the kind of money it takes to help a low-income family start homeschooling. Since Minnesota already has other school choice tax deductions and credits, there is a good chance of enacting this seventy-five cent on the dollar tax credit.

Arizona was the first state to enact a scholarship tax credit, and Arizona taxpayers are now providing millions of dollars that help thousands of children have a real choice. Florida and Pennsylvania have adopted Arizona's scholarship tax credit model, and other states are eagerly considering the same mechanism. Up until now, homeschoolers have not been able to directly benefit from the new scholarship funds because homeschools are not eligible for scholarship money in Arizona, Pennsylvania, or Florida. In Minnesota, by contrast, "homeschools" and "private schools" are not two separate legal categories. Instead, all Minnesota schools are either "public" or "nonpublic," which means that scholarship funds would be permitted to assist low-income families who need help in paying for curriculum, tutoring services, and the like.

The most important effect of this bill for many Minnesota homeschoolers would be the new possibility of generating private scholarship funds that are constitutionally able to pay for religious materials. Minnesota is unusually generous in paying for secular textbooks, but Minnesota's existing laws cannot be used to help religious families acquire religious materials. This is because the Minnesota Constitution specifically states, "In no case shall any public money or property be appropriated or used for the support of schools wherein the distinctive doctrines, creeds or tenets of any particular Christian or other religious sect are promulgated or taught." Minnesota Constitution Article 13, §2. Minnesota is leading the country in certain school choice initiatives, as long as all of those choices are secular. The scholarship tax credit allows religious families to pool their money for religious materials without violating the constitution. As the Arizona Supreme Court ruled, the money that the state does not take a way from a taxpayer (tax credit) does not thereby become "state money," and therefore may be used for religious materials even though the constitution prohibits the state from paying for such materials directly.

Given Minnesota's constitution, current law provides subsidies for secular education but shuts religious education out. The proposed scholarship tax credit will save taxpayers money, help low-income families, and "level the playing field" for religious families. We urge the strongest possible support for this bill.

 Other Resources

4/23/2003 - Minnesota--Help Us Support a Scholarship Tax Credit

Bill Text

Bill History