Senate OK of education tax credit is an early win in NY legislative session open in NYS


The New York State 2016 legislative session has barely begun, yet the Senate has already passed a bill of major importance for the nonpublic school community: the Education Investment Incentives Act. This bill, sponsored by Bay Ridge Senator Marty Golden, co-sponsored by Boro Park Senator Simcha Felder, and long championed by Agudath Israel of America, would provide significant tax credits for scholarship funds for needy yeshiva students.

The bill would provide tax credits to individuals, corporations, and partnerships that donate money to public schools, charter schools and, through “educational scholarships,” to students who attend schools that provide religious education.

The Education Investment Incentives Act would encourage the private sector to give such donations to yeshivos and yeshiva students by providing a tax credit of 90 percent for eligible donations. Thus, for example, a $1,000 contribution would yield a $900 reduction in taxes. Currently, a $1,000 donation results in a tax deduction, which has a significantly less substantive reduction in tax burden, dependent on one’s tax bracket.

While it remains to be seen if this bill will pass subsequent hurdles, including an upcoming battle with the Assembly, this is an excellent step in a headline issue. Education tax credits were identified as Agudath Israel’s top legislative priority in a recent letter from Executive Vice President Rabbi Chaim Dovid Zwiebel to Governor Andrew Cuomo. 

Another issue that Agudath Israel advocated for in its annual letter to the governor was a request to close the CAP shortfall. While Agudath Israel, together with other advocacy groups, has successfully secured $250 million to nonpublic schools over the next two years, by Agudah Israel calculations, the state still owes at least $50 million to nonpublic schools. The shortfall was caused by a flawed formula employed by the state to fulfill its legal mandate to reimburse nonpublic schools for certain required services. Agudath Israel asked the governor to verify the shortfall and remedy it.  

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