LANSING, Mich. - A tax credit on donations to public and private school foundations won state Senate approval Wednesday, according to the Michigan Information & Research Service.

Senate Bill 0038, sponsored by Sen. John Pappageorge, R-Troy, passed on a 24-13 vote, MIRS reported. It would amend the Income Tax Act to allow a tax credit of 50 percent of the total amount given to an education fund endowment or a specific project organized by an education foundation, according to MIRS. The maximum amount would be $50 for an individual or $100 for joint filers.

Sen. Gilda Jacobs, D-Huntington Woods, said the bill was "well-intentioned" but would cost the state $44 million in tax revenue and would not resolve the need for comprehensive funding reform, MIRS reported.

Sen. Mickey Switalski, D-Roseville, said the bill violates the Michigan Constitution by including private schools, according to MIRS, but Pappageorge said that, "The notion that this would somehow destroy the (school) system is just wrong." He said that the contributions reduce the financial strain on schools, MIRS reported.

For a resident estate or trust, the credit could not exceed 5 percent of the taxpayer's tax liability for the tax year before any credits were claimed, or $2,500, whichever was less, MIRS reported.

SOURCE:
Michigan Information & Research Service, Inc., "Senate OKs School Donation Tax Break," Jan. 19, 2010 (Subscription required)

FURTHER READING:
Michigan Education Digest, "Slight increase in tuition tax credit programs," April 2, 2009

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