State House considers education tax credit

By
Friday, April 6, 2007

Correction appended.

A bill introduced last month in the state House of Representatives would create a tax credit for Rhode Island residents pursuing post-secondary education. The bill is designed to expand the current federal tax credit for education expenses to residents’ state-tax bill.

“Rhode Island has identified the creation of a better-educated workforce as one of our priorities and one of our methods for strengthening our economy. Just like the federal government, we should provide a tax break for people who are working toward a degree,” said Rep. Edwin Pacheco, D-Dist. 47, the bill’s primary sponsor, in a press release. “Since they are spending a significant amount of money on their education, this tax break would provide them some needed relief. It will also serve as an incentive to encourage more Rhode Islanders to pursue higher education.”

Under the legislation, a state taxpayer paying for a spouse, a dependent or his or her own education would be eligible for the deduction. Residents with an adjusted gross income under $65,000 or a combined $130,000 if filing jointly with a spouse would be able to receive $4,000 from the state. Individual returns up to $80,000 and joint returns up to $160,000 would be eligible for a $2,000 credit.

“We woefully underfund education in Rhode Island at the grade-school level and at the secondary level, and this will provide some relief to people who are having trouble funding their education,” said Rep. David Segal, D-Dist. 2, a co-sponsor of the bill who formerly represented Providence’s Ward 1 – including much of Brown’s campus – on the City Council. “We’re way below average in per capita education funding,” he said.

“For me, (a tax credit) didn’t make that much of a difference when I was paying for tuition because you have to come up with that money initially to even come in the door,” said Josh Marland GS, a Rhode Island resident paying for his own education. “What’s the answer to the initial entrance into college?”

Segal said the criticism is legitimate. “For some people, this might not be the most efficient method of doing it, but these things are always subject to modification as they move through the process,” he said.

Some taxpayers said the state could do more to help with college tuition. “I’d love it if it passed – every little bit helps, and tuition is a nightmare for most people,” said Judy Knowles P’10, a resident of Newport. “Unfortunately, with a kid at Brown, we don’t really take advantage of the public institutions. It’s my opinion that no state or federal program is really enough.”

“I think that there is a lot more they could do with the money on the front end,” Marland said. “Is it a real commitment to education or a symbolic one?”

The bill is currently awaiting a hearing by the House Finance Committee. Segal predicted that a hearing might happen as early as this month.

Due to an editing error, an article in Thursday’s Herald (“State House considers education tax credit,” April 5) misattributed a statement to Judy Knowles P’10. Josh Marland GS, not Knowles, said, “I think that there is a lot more they could do with the money on the front end. … Is it a real commitment to education or a symbolic one?”