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Show XI VtWUClJ vauo For Against uo vuci o oravuivanx No rL O O Fis red' ann Official Ballot Title: Sl,i reci tha Shall a law be enacted to allow individuals a credit against state income tax for tuition, textbook, and transportation costs they incur Initiative when their dependents attend a private elementary or secondary school within the state? C INCOME TAX CREDIT FOR PRIVATE EDUCATION IMPARTIAL ANALYSIS Initiative C allows an income tax credit for a students tuition, textbook, and transportation costs to attend a private elementary or secondary school in Utah. In order to be eligible for the tax credit, the student's parent or guardian must have paid a third party for the costs of attendance at the private school. The initiative requires that attendance at the school must satisfy the states compulsory attendance law. Home schools, where students are taught in their homes by their parents, may qualify as private schools for the purpose of the tax credit. This initiative could allow one parent to pay the other for attendance at a home school, and claim a credit for those costs. Initiative C limits the credit for each student in kindergarten through sixth grade to 50 of the amount of the funding unit for public education. For each student in seventh through twelfth grade, the credit is limited to 60 of the amount of the funding unit. The Legislature sets the funding unit amount each year. Currently, it is $1,204. Using this amount, the parent or guardian could claim up to $602 for each student in kindergarten through sixth grade and up to $722.40 for each student in seventh through twelfth grade. Initiative C limits the types of costs that may be claimed as a tax credit. Allowable textbook costs are for books and other materials and equipment used to teach subjects legally and commonly taught in public elementary and secondary schools. Costs for books and other materials and equipment used to teach religious doctrine or for worship are not allowed. Allowable transportation costs do not include travel to extracurricular activities or for drivers education programs. If the claimed tax credit exceeds the tax liability for the tax year, the initiative requires that the parent receive a payment. For example, if a parent owed state taxes of $1,000 and was able to claim the maximum credit of $602 for a student in second grade and an additional $602 for a student in fifth grade, the parent would be entitled to a payment of $204. Page 28 Constitutionality Initiative C raises a constitutional question. Does it advar religion, which is prohibited by the First Amendment to the Unit States Constitution? This question has been raised by similar states. In 1973, the United States Supreme Court struck dov New York law that allowed parents a deduction against their su income tax for each student for whom they had paid tuition to attf a private elementary or secondary school. The Court declared that program rewarded parents for sending their children to priu schools. In most cases these were church-affiliateschools, so law had the primary effect of advancing religion. It was there! declared unconstitutional. Committee for Public Education Religious Liberty v. Nyquist, 413 U.S. 756 (1973). s However, in 1983, the Supreme Court upheld a Minnesota;, benefit program that allowed parents of students to claim a si. income tax deduction for the educational expenses of each stud-ia public or private elementary or secondary school. Muellr Allen, 676 F.2d 1195 (8th Cir. 1982), aff'd, 463 U.S. 388 (1983). f Court ruled that the Minnesota law was not unconstitutional sir parents of public or private elementary and secondary soli students could claim the deduction. Initiative C, like the New York law that was declared applies only to parents of students in private schools.? tax benefit is not available to parents of students in public schools, it is in Minnesota. Therefore, the Supreme Court would probat declare Initiative C unconstitutional as violating the Ft Amendment to the United States Constitution. Effective Date The initiative becomes effective at the beginning of the set year following its passage. There is no uniform date established' school to begin in Utah. The Legislature or the State Tax Commiss would probably have to set a beginning date to carry out the inter the initiative. |