By Celine Klosterman
A $1.25 million increase in tax credits for school tuition organizations has been approved by the Iowa Legislature and awaits Gov. Terry Branstad’s signature.
With the increase, STOs would be able to give more financial assistance to students beginning in the 2013-14 academic year.
A total of $8.75 million in tax credits would be available annually for donations to STOs throughout Iowa beginning Jan. 1, 2012. Donors receive a 65 percent state tax credit on their gifts to STOs, which help students attend accredited, nonpublic K-12 schools.
The Iowa Department of Revenue will determine this fall how much in tax credits will be available for each STO, based on enrollment in the schools a particular STO serves, said Steve Roling. He is president of the STO of Southeast Iowa, which covers Catholic schools in the Davenport Diocese outside Scott County. The Mississippi Valley STO serves Scott County Catholic schools.
Based on the STO of Southeast Iowa’s share of state tax credits in previous years, he estimated the STO would be authorized to raise about $875,000 in 2012. That total is up from $749,000 this year.
Linda Duffy, program coordinator for the Family Tuition Plan for Scott County Catholic schools, estimated the Mississippi Valley STO would be authorized to raise an additional $105,000 over the STO’s 2011 cap of $643,909.
Ninety percent of donations received must go toward students’ tuition. Eligible families earn up to three times the federal poverty level.
The Iowa Legislature’s approval late last month of increasing the amount of money STOs may raise means more low- and middle-income students would receive scholarships, noted Trish Wilger. She is executive director of Iowa Alliance for Choice in Education, which educates the public and legislators on STOs and school choice programs, and Iowa Advocates for Choice in Education, a lobbying group.
“All STOs report having to turn qualified applicants away because they don’t have any more funding to offer them, so the current need is not being met,” she said. “Also, most areas of the state report an increase in students who qualify for the free and reduced lunch program, indicating that more families are suffering financial setbacks in this economy and need financial assistance to attend a nonpublic school.”
STO advocates, including the Iowa Catholic Conference, Iowa Advocates for Choice in Education and the Iowa Association of Christian Schools, had lobbied to increase STO tax credits to $10 million. “But we knew how tight the budget was and weren’t sure legislators would make any changes at all,” Roling said.
“Every bit of assistance helps,” said Lee Morrison, diocesan superintendent of schools. “STOs have been a lifeline to our Catholic families in need.”
For the 2011-12 academic year, 491 students received an average of $1,393 from the STO of Southeast Iowa, Roling said. The STO received applications representing 743 students, 545 of whom were qualified to receive a grant.
For the coming school year, the Family Tuition Plan has so far approved 467 grants totaling more than $802,418, Duffy said. Of that amount, around $632,000 will be funded by the Mississippi Valley STO.
To donate to the Mississippi Valley STO, visit www.mvsto.org or call (563) 326-5313 ext. 228. Donations for the 2011 tax year are due Dec. 31.
The STO of Southeast Iowa met this year’s cap on donations in early June.