‘NMI not losing revenue through tax credit’

Far less than 1 percent of the Commonwealth’s total estimated revenue is “lost” through the educational tax credit, according to a group opposing a House bill that would repeal the ETC law.

Coalition of Private Schools CNMI Inc. president Scott Norman said that, contrary to a statement in House Bill 14-238, the government is not losing substantial revenue as a result of the ETC.

“Quite the contrary, the Commonwealth is putting money where it is needed most. The money is going directly to the schools. There is no loss in that arrangement,” Norman said in a letter to Rep. Norman Palacios, chair of the House Ways and Means Committee.

“Every time a dollar is donated to an educational institution through [ETC], a child is greatly benefited because the school where that child attends is better able to supply material and services that might not be otherwise be available,” he added.

Further, Public School System data showed that all the government-run schools in the CNMI received only $129,772.33 in total donations through ETC in fiscal year 2004. This amount represents a negligible 0.006 percent of the CNMI’s $217.8 million general fund for FY2004.

The school that got the biggest amount of donations was Saipan Southern High School, at $30,374.99 for the entire fiscal year. Koblerville Elementary School ranked second at $13,153.12, followed by Tanapag Elementary School at $10,025.

Rota High School received the smallest amount at $200.

The total donation received by public schools in FY 2003 was even smaller at $94,528.74.

Norman said the Coalition of Public Schools is working on gathering all the figures from its members. There are about 20 private schools in the CNMI.

In his letter to Palacios, Norman also challenged a statement in H.B. 14-238 that the supposed lost revenue “could be used to fund the pressing needs of the Commonwealth for essential services in the areas of education.”

“[That] is exactly where the revenue goes. It goes to our educational institutions in the elementary, secondary, and post-secondary levels. It helps meet the pressing needs of the education of our youth,” he said.

He pointed out that ETC allows schools to purchase primary materials such as textbooks that they cannot purchase under federal guidelines. The tax credit also allows them to buy supplemental materials not ready available otherwise.

Moreover, the ETC allows a donor to at least know where his “tax” dollar is going, Norman said.

“Money is too often lost or unwisely appropriated via the general fund. The education tax credit is money appropriated right to the area where it was intended—education,” he argued.

Norman, who is also chair of the Chamber of Commerce education committee, presented these views at the business club’s meeting in Dai-Ichi Hotel yesterday.

“The ETC is too far-reaching and progressive to be dashed against the stones of shortsightedness and desperation,” he said in his report to the club members. “Again, this is not a pro-revenue bill; it is an anti-education bill.”

House Bill 14-238 seeks to repeal Public Law 10-73, or the Education Tax Credit Law. It was introduced by Rep. Janet U. Maratita on Sept. 9, 2004.