The Importance of Education Tax Credits

While education is not at the top of the legislative agenda this year, it is never far from the minds of politicians and those of us who are concerned about out-of-control budgets. That is why the Rio Grande Foundation is supporting the idea of education tax credits. Recently an opinion piece I wrote appeared in the Los Alamos Monitor making the case for the adoption of such a credit in New Mexico during the current legislative session. In building the case for these reforms, I cite Dr. Messenheimer’s recent policy paper published by the Rio Grande Foundation which showed that education results in New Mexico are stagnant despite ever-increasing resources dedicated to education.
My article drew a rather misinformed response from a reader to which I responded with the following:

As the author of a recent (January 3) article on the need for tax credits for education choice here in New Mexico, I feel the need to clear up some misconceptions contained in a recent letter written by John Lilley, dated January 17.
Mr. Lilley states that private schools already have the capacity to accept donations and that such a system is already in place. This is true, but that does not mitigate the need for New Mexico to adopt its own tax credit program for the benefit of needy children in failing K-12 schools.
The idea we are promoting and which is being carried forward by Sen. James Taylor (D- South Valley) this year is for individuals and businesses to take a credit against their New Mexico tax burden. Unlike the federal deduction which Lilley references, tax credits would allow individuals to take a credit against a very high percentage (up to 90 percent) of their New Mexico tax burden and allocate that money to eligible scholarship programs.
The current tax deduction is taken against a taxpayer’s federal tax burden. This provides a significantly lower rate of return and is available only to those who itemize their federal taxes (typically higher income taxpayers).
Two other misconceptions are that we want people to be able to donate directly to their own children’s education. This is simply not the case as donations would be made to a non-profit, scholarship organization to offer scholarships for low-income children.
Lastly, Lilley calls into question our status as a “charity.” While we are designated as a 501c3 non-profit, we are not a grant-making organization. Not all non-profits make grants.
Lilley has every right to criticize both the editor of this paper and the Rio Grande Foundation if he wishes, but his assertion that my writing is nothing more than factually incorrect “ramblings” is incorrect and out of order. If Lilley or any reader of this paper has questions about our work or education tax credits, I encourage them to check out our website: