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Maryland Education Credit Proposal Sparks Debate

Recent polling reveals significant support among Maryland voters for the Maryland Education Credit, a proposed piece of legislation which would offer substantial tax credit to business entities that donate funds to nonprofit organizations providing financial help to K-12 students, including tuition at private schools. The concept has stirred controversy, however, with teachers unions characterizing the idea as being little more than an unfair “voucher scheme.”

Key details of proposed Maryland Education Credit

Designed to resemble similar plans in 16 other states, Maryland’s proposed program would offer a 60 percent tax credit up to $200,000, instead of a charitable deduction, to business enterprises donating money to student assistance organizations which give financial aid to students, including those attending private institutions. The proposal, backed by Governor Larry Hogan, has enjoyed notable support on a bipartisan basis in Maryland’s General Assembly dating back to 2006, though it remains stuck in the House Ways and Means Committee.

Widespread support for tax credit among diverse groups

A recent OpinionWorks poll revealed that well over 60 percent of Maryland voters support the proposed program, citing its ability to assist lower-to-middle income families in securing a high-quality education for their children, whether public or private. It was also found that those who support the concept hail from a wide range of demographic groups throughout the state, with 74 percent of African-American voters endorsing the plan. The bipartisan nature of the support enjoyed by this proposal was also evident in the polling data, with Democrat endorsements at 69 percent and Republican at 66 percent. With average tuition for Catholic elementary schools in Baltimore reaching $5,498 per year, proponents of the plan argue that low-income families need all the support they can get when it comes to giving their children an opportunity to break the cycles of poverty, crime and substandard education plaguing numerous communities, including Baltimore City.

Teachers union voices staunch opposition

The president of the Maryland State Education Association has criticized the tax credit idea, calling it nothing more than a voucher scheme that will have the effect of shortchanging public education across the state. The ACLU of Maryland and the Maryland Parent-Teacher Association have also registered their opposition to the tax credit, arguing that public school districts are already struggling to come up with funds to cover needed facility renovations and technology upgrades, and this proposal would make that task even more of a challenge.

One of the specific issues raised by opponents of the tax credit is the fact that private educational entities are not subject to the state’s protections concerning discrimination on the basis of disability and sexual orientation. According to these groups, the state should not be providing additional financial support to schools who are not held to the same standards as public schools in this regard.

Sound guidance on Maryland business tax matters

Though the Maryland Education Credit remains in limbo, and opponents have pledged to continue efforts to block its approval, Governor Hogan has given no indications that he is willing to abandon the plan. The Maryland tax attorneys at Rosenberg Martin Greenberg will continue to monitor developments concerning the credit and stand prepared to provide sound advice and guidance to business clients statewide. For a confidential consultation concerning tax credits or any other planning issue, contact Brian Crepeau at 410.649.4981 or via email at bcrepeau@rosenbergmartin.com.

Rosenberg Martin Greenberg

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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions