Statements On Introduced Bills And Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - June 28, 2007)

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Ms. COLLINS. Mr. President, I rise today, along with my good friends, Senators Warner, Chambliss, Snowe, Isakson, Lugar, Cornyn, Coleman, and Voinovich, to introduce the Teacher Tax Credit Act of 2007.

As we approach the end of the school year, it is appropriate once again to consider tax relief to help cover the out-of-pocket expenses our Nation's teachers incur to improve the education of our children.

Many times in the past, we have come to the floor to offer legislation on this subject. In 2001, Senator Warner and I offered legislation which resulted in the enactment of the existing $250 teacher tax deduction. That deduction expires at the end of this year. Earlier this session, Senator Warner and I offered legislation to make that deduction permanent, raise it to $400, and expand it to cover professional development expenses.

Today, we introduce legislation that would provide teachers with an alternative tax credit for books, supplies, and equipment they purchase for their students, as well as for professional development expenses. The tax credit would be set at 50 percent of such expenditures so that teachers would receive 50 cents of tax relief for every dollar of their own money they spend, up to $300.

Our rationale in proposing a tax credit as an alternative to the existing deduction is simple, deductions only reduce tax liability indirectly, by reducing taxable income. The value of the deduction is equal to the taxpayer's marginal tax rate, or what we call their tax ``bracket.'' For example, for teachers in the 25 percent tax bracket, a $100 deduction would reduce their tax liability by 25 percent, or $25.

By contrast, the tax credit we are proposing would reduce the amount of taxes paid by a teacher by 50 percent for each dollar that a teacher spends on school supplies or professional development expenses, regardless of the tax bracket the teacher is in. A teacher who took the maximum credit amount of $300 would save 50 percent of that amount--$150--in taxes.

We have made an effort to ensure that the tax benefit we are proposing will make all teachers who use it better off, relative to the current deduction. Let me take a moment to explain how we have done this: first, the tax credit is structured as an alternative teachers can choose either the deduction or the credit, whichever works best for their tax situation. Second, the level of the credit, if adopted in its present form, would provide a net after-tax benefit of $150. This is significantly higher than the net after-tax benefit that most teachers can receive using the current $250 deduction.

It is even higher than the net after-tax benefit that would result from the $400 deduction Senator Warner and I proposed earlier this year. Teachers in the 25 percent tax bracket would get a net after-tax benefit of $100 from a $400 deduction, so they will see an increase of $50 under the credit system that we are proposing today. Even teachers in the highest tax bracket, which is currently set at 35 percent, would see a small increase in the net benefit they would receive under this credit, compared to a $400 deduction.

I should also note that some teachers make so little they do not even have the tax liability to offset this credit. To make sure these teachers are also compensated for the money they spend on classroom supplies and professional development, the credit Senator Warner and I are proposing is fully refundable.

It is remarkable how much the average teacher spends every year out of his or her own pocket to buy supplies and other materials for their students. Many of us are familiar with a survey of the National Education Association that found that teachers spend, on average, $443 a year on classroom supplies. Other surveys show that they are spending even more than that.

The NEA's data also shows that the average teacher in the U.S. still does not make $50,000, and in many States, including Maine, they average less than $40,000. When you realize that the average teacher is not particularly well paid, it speaks volumes about their dedication that they are willing to make that kind of investment to support the teaching they provide to their students.

Indeed, I have spoken to dozens of teachers in my home State who tell me they routinely spend far in excess of the $300 credit limit on materials they use in their classrooms. At every school I visit, I find teachers who are spending their own money to improve the educational experiences of their students by supplementing classroom supplies. Year after year, these teachers spend hundreds of dollars on books, bulletin boards, computer software, crayons, construction paper, tissue paper, stamps and inkpads. For example, Anita Hopkins and Kathi Toothaker, elementary school teachers from Augusta, Maine, purchase books for their students to have as a classroom library as well as workbooks and sight cards. They also purchase special prizes for positive reinforcement for students. Mrs. Hopkins estimates that she spends $800 to $1,000 of her own money on extra materials to make learning fun and to create a stimulating learning experience.

It is important that this credit also be available to teachers who incur expenses for professional development. While this tax relief provides modest assistance to educators, it is my view that students are its ultimate beneficiaries. Studies consistently show that well-qualified teachers, and involved parents, are the most important contributors to student success. Educators themselves understand just how important professional development is to their ability to make a positive impact in the classroom. Teachers in Maine repeatedly tell me that they need, and want, more professional development. But tight school budgets often make funds to support this development impossible to get. By providing a credit for professional development expenses, this amendment will help teachers take that additional course or pursue that advanced degree that will make them even better at what they love to do.

Our bill makes it a priority to reimburse educators for just a small part of what they invest in our children's future. It is both sound education policy and sensible tax policy. I hope our colleagues will join us in support of this important initiative.

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