May 21 2012
Celebrate National Small Business Week with Tax-Credit Scholarship Programs
Vicki E. Alger
This week kicks off National Small Business Week. A growing number of states are helping businesses of all sizes by helping students attend the schools their parents think are best by enacting corporate tax-credit scholarship programs.
Currently nine states have such programs. New Hampshire adopted its program earlier this month, and New Jersey is poised to become the tenth state. Such programs allow businesses to make tax-deductible contributions to non-profit scholarship-granting organizations. Donation amounts vary from state to state, but the result is the same: children have greater educational options, businesses invest in nurturing home-grown talent, and savings are realized by states and school districts alike because scholarship amounts are typically far less than average public-school costs.
Business leaders nationwide are clamoring for policies like tax-credit scholarship programs that foster better climates for work and learning. Consider some recent statistics.
The U.S. Chamber of Commerce, which is hosting its own Small Business Summit this week, recently released its quarterly Small Business Outlook Study. It found, “Concerns about over-regulation are the highest we’ve seen in the past year.” A majority if small business owners say “taxation, regulation, and legislation from Washington make it harder for their business to hire more employees,” and they consider Obamacare “an obstacle to growing their business and hiring more employees.”
Worse, federal red tape breeds state and local red tape for businesses. The Small Business and Entrepreneurship Council’s annual Small Business Survival Index ranks states according to more than 40 leading government-imposed costs affecting small businesses and entrepreneurs. Its latest report concluded that state and local lawmakers must lead the way to economic recovery and not look to Washington for handouts:
“The economy over the past four years has been simply abysmal, featuring a long and deep recession, followed by a very poor recovery. Particularly in 2009 and 2010, state and local governments were viewed as entities needing bailouts from the federal government. In reality, though, doling out more funds to state and local politicians accomplishes nothing in terms of improving a state’s economy and competitiveness. Instead, state and local lawmakers need to be pro-active in advancing pro-growth policies. Economic recovery and job growth, after all, are all about private sector entrepreneurship and investment.”
Business leaders also agree that high-quality education is key to economic growth. The Chamber of Commerce cites the Council on Foreign Relations’ recent report showing poor-quality education threatens our national security. Its education division, the Institute for a Competitive Workforce, also notes, “Rebuilding America’s economic foundation is about… developing the talents of our children and workers, and ensuring that our country continues to lead the world in innovation.” And there’s a lot of work ahead given that “Among 34 developed countries, American students rank 14th in reading, 17th in science, and 25th in mathematics, and an American high school student drops out every 27 seconds.” The Chamber of Commerce also cites statistics showing that American “companies are spending in excess of $4 billion annually, yet student achievement remains stagnant.” (For state data see here and here).
Letting businesses help children attend schools of their parents’—not government’s—choosing is a win-win for students, states, and taxpayers.