A Simple Rx for Catholic Schools

October 14, 2018

- novelist and tax expert

Much has been written about the crisis in parochial school education, what with declining enrollment, school closures and burgeoning deficits. An equal amount of ink has been dedicated to possible fixes (vouchers, partnerships, charter schools, etc.), none of which has inched toward fruition in large part because the proposed fix is too dramatic (apocalyptic?) a development than the electorate at large is willing to undertake.  However a simple, non-burdensome, inexpensive cure does exist.

 

 

 

If you start with the principle that the key is attracting/retaining quality teachers, then let’s focus on the income disparity of teacher salaries. Using Worcester, Massachusetts, as our beta case, the salary differential is pronounced (average public school salary is $56,000 versus $46,000 to that paid a Catholic school teacher.)  That 22%, or $10,000, of forfeited revenue is a bitter if not impossible pill for the average person to swallow.  Of course, when federal income taxes are factored in, the differential, while still significant, lessens to about $7,500 (i.e., a single person earning $56,000 pays $9,778 in tax, thus netting after-tax income of $46,222; the $46,000 wage earner pays $7,278, netting $38,722.)  Not to bore you with tax minutiae, but stay with this, because taxes are the key to restoring some parity.

 

Opting to work at a Catholic school in effect means our teacher is contributing $10,000 of services that could otherwise be earned if the teacher opted for the public school system.  An oddity of the Internal Revenue Code is that while one is entitled to deduct cash contributions or in-kind property donations, services rendered to a charity are not deductible.  If the law (IRC section 170) were amended to allow teachers of charitable organizations to claim the differential value of their contributed service, the salary differential would narrow considerably as follows:

 

Thus the reduced taxes the parochial school teacher pays after the newly allowed deduction reduces the salary disparity to a much more palatable $4,000.  This modest tweak of one section of the tax law is much less costly or invasive than the above-mentioned palliatives such as a voucher system.  Moreover, it provides income equality to a segment of the working class, and fairly throws a lifeline to the entire school system.  The time has come for a concerted Catholic lobbying effort aimed at a small incremental fix like the charitable service deduction, without abandoning the fight for complete parental freedom of choice in education.  

 

Note - This article appears in Volume 22 – Autumn 2017 issue of The Catholic Educator and is featured on the JohnHenryCardinalNewman.org website.

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