Or at least accoring to Rabbi Eli Monsour.
I was mass-forwarded an email this morning a letter from Rabbi Monsour, discussing why we should support the tuition tax credits for parents who send their kids to yeshivos.
If my understanding of this is correct, the general idea is that we should support a bill in the legislature that will provide a $500 tax credit to private school parents to help defray the rising costs of tuition. Certainly, that's how the bill is being presented to the members of the New York State Senate and Assembly - as a measure to help parents pay the costs of tuition.
However, I'm struck by the following paragraph in Rabbi Monsour's letter (bolding mine)
Needless to say, private school tuition costs are one of, if not the largest monetary burden facing our families. If this bill, which is coming before the New York State Legislature next month, were to pass, - the strain on many of our community?s organizations, including; the Sephardic Bikur Holim, the Sephardic Angel Fund, the Sephardic Food Fund, and even Sephardic SAFE, will be greatly reduced. Even our Yeshiva?s will be less pressured, as the need to provide student scholarships and discounted tuition costs will be sharply reduced.
In his first statement, Rabbi Monsour is certainly correct. Private school tuitions *are* one of the largest costs facing families that send their children to yeshivos, parochial or other private schools. However, by the time he gets to the last sentence, he seems to have forgotten the first. My understanding of his last sentence (and if you have a different interpretation, I'd like to hear it) is that yeshivos will be able to reduce scholarships that they provide to parents who can't afford it, because the parents will have extra money to pay. In other words, the bill that is supposed to provide monetary relief to families, in fact, will provide none. If the scholarships for families that have them will be reduced by the amount of the tax credit, then the net change in cost to the parent will be zero. That is not a relief for parents.
I find this all just a bit dishonest. If one wants to frame the bill as a measure to increase funding to schools, then by all means, frame it that way. But I find that framing it as a relief for parents when (as my reading of Rabbi Monsour's statements) in fact, the parents will see no real monetary benefit from it, is just dishonest.
I'm not necessarily opposed to the idea of additional funding for schools and students. But I believe that if that is the goal, it should be presented in that manner, and not as a bogus measure to provide relief to parents.
(cross-posted with entire text of email over at Hashkafah.com)
This will only appeal to folks who have 1) daughters and/or 2) sons that go to a school with secular studies besides Torah.
People who send only sons to a Yeshiva with no secular studies don't care about such a a monetary benefit, as they understand that their tuition isn't included in the yearly income that is fixed at Rosh Hashanah (Beitzah 16a). Chareidi yeshivot can raise tuition as much as they want; if parents complain it only reflects on their lack of bitachon...
So, Manny, if a Chareidi yeshiva with no secular studies decides to charge $100,000 a year (to use a hyperbolic example), parents should have no cause to complain if they have bitachon????
In any event, as most yeshivos in New York do have secular studies, I guess it matters after all, even according to you.
Manny, you are absolutely incorrect. Families do care and are suffering. They are being crushed under the burden and the community is being crushed when people are being crushed.
The fact that tuition is astronomical and that many parents are just not making ends meet. The financial burden posed by tuition causes problems with shalom bayit and it takes parents away from their children unnecessarily as they seek dollars that they wouldn't need without a tuition bill. Your reading of the Gemorrah is "feel-good," but simplistic.
Unfortunately, this letter from Rabbi Mansour was irresponsiblity worded, although he meant only to support the cause, and is now out there for everyone to read and has the potential to take away support, rather than build support. (See my post about it here: http://orthonomics.blogspot.com/2006/02/tuition-tax-credits-petition-letter.html)
Both the Sephardic Federation and the OU disagree with the wording and want people to know that their fight for tax credits are not so the schools can benefit, but so struggling parents can benefit.
Certainly bithochon plays a factor but where is the hishtadlus. If there is a tax benefit that can help ease the financial burden for families in any way I say we fight for it.
I, frankly, just don't have that much bitachon. Or that much money, either.
Hey Wolfie, you're right on the money. I have long opposed vouchers on the grounds that they would be used only to benefit the schools but not the parents. The vouchers will certainly not cover full tuition, and the schools will simply use it to offset the portion that the scholarship parents were anyway not paying. To make matters worse, if local school districts have to fund the vouchers themselves (as is certainly likely), it will mean a tax increase to pay for them, so that people be paying more in the end.
Sheesh, I guess I was too subtle for the sarcasm to shine through...
I guess so. If you read Gil Student's blog you will see that there are rather large Rabbinic figures who do not believe there can be a tuition crisis for the very reasons you stated.
To note, even if there is no tuition increase because of the tax credits, the bill will only really help the wealthy people. The very people who don't need the help.
The bill here for tax credits work by reducing the tax burden by $500 max. The wealthy people will be saving $500, but they don't feel any burden paying tuition in the first place. So it's basically a gift to the rich.
On the other hand, the poorest people barely pay much taxes in the first place. And a tax *credit* is not a return, it just reduces the tax burden. So the poorest are not really helped at all here.
And as you've noted, the middle-income people are generally those whom schools help by giving some degree of scholarship. This scholarship will simply be reduced once a school realizes that the parents can pay another $500.
So, to reiterate: Poor aren't helped at all since their situation doesn't change. Middle income will just have their scholarships cut, effectively leaving them in the same place. And the rich will get a nice gift from the state.
The tax credit is only available in the full amount to those making $75K and in reduced amounts to those making $90K. The middle class can benefit although it is hard to know what the yeshivot will do. Even those who pay no taxes could get money back because sometimes tax credits work that way. Of course it is hard to know who will benefit unless the law actually passes. I have a post on my site about how tax credits generally work if you are interested.
This is a straightforward first-year economics problem. If the govt subsidizes yeshiva tuition, the subsidy will be shared between parents (the buyers) and the yeshivos (the sellers). The parents get the subsidy; but the yeshivos take their piece by raising tuition and/or reducing financial aid.
What fraction of the subsidy will the yeshivos take? First-year economics says that consumers get less and less of the subsidy as elasticity of demand for the good decreases. In English that means: consumers get a smaller fraction as their willingness to substitute some other good for the subsidized good goes down. I suspect yeshiva education has a very small elasticity of demand. Certainly few parents would send their kids to public schools. The only question is whether in NYC and Monsey they compete with one another enough to put downward pressure on tuition.
I think they don't - too much sectarianism. Therefore I suspect that competition is low, and so expect almost all of the subsidy to increase yeshiva bank accounts, not parents'.
Of course, that is not a bad thing. But it is a govt transfer to the yeshivos, not to the parents.
"Even those who pay no taxes could get money back because sometimes tax credits work that way."
You'll have to explain how that works. What's the link?
The above is what I wrote about tax credits. I don't believe I covered how some credits can give back money to those who don't pay because I'm not sure that is relevant to this discussion of tax credits, as it is a state tax credit and I am not thoroughly familiar with NY State tax law and trends. The "Earned Income Credit" is unique in that it is welfare funneled through the tax system. Apparantely there are other credits that can provide money not paid back, but I don't want to speak to them since it is not my area of expertise.
I have 6 children in yeshivos from yeshiva ketanna (6 yr old child) all the way up to bais medrash (19 year old child) - Baruch Hashem! I have a wonderful job and make in the upper 5 figures. However, I have not been able to pay 'full tuition' for years. Even with the scholarships that the yeshivos give me, my annual tuition bill over the last couple of years has been over 80% of my net pay. Adding my mortgage puts me over 100% of my take-home pay. Oh, and I really feel I have bitachon that Hashem helps take care of us. Thus, according to Manny, If not for the yeshiva tuition, I would not be even making enough to pay for my mortgage today.
Although Hashem can certainly do whatever He wants and non of us know what that is, I find it difficult to believe that after more than 25 years in a good career, I would not be able to pay any of my bills if not for tuition. Actually, given my circumstances, for the most part, I can't pay any of my bills except tuition. Almost everything else goes on the 'plastic'.
But Baruch Hashem, I'm struggling, but not complaining. I know people in worse conditions.
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