Home Buyer Tax Credit to be Extended and Eligibility Expanded

I was told this is a done deal, but I haven't seen an announcement yet - so it might still change. The tax credit was expanded to move-up and higher income buyers. The amount of the credit was reduced to a maximum of $7,290.

Senate Close to Deal Replacing Homebuyer Tax Credit

The details:

• Income eligibility for first-time home buyers stays at $75,000 for individuals and $150,000 for couples.
• For move-up buyers, income eligibility is $125,000 for individuals and $250,000 for couples.
• There is a minimum 5 year residency requirement in their current home for move-up home buyers.
• The tax credit is the lesser of $7,290 or 10% of the purchase price.
• The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow)
• Expect bill to be signed by Friday.

This is obviously bad economics, but it must be good politics. The first-time home buyer impact will fade (and will probably cost over $100,000 per additional home sold). The move-up portion will probably be even less effective.

Apparently this tax credit will be combined with the extension of the unemployment benefits to avoid a veto (the real reason the extension was being held up).

Issuance of Voucher and Briefings

OHFA's goals and objectives are intended to assure that families selected to participate are equipped with the tools necessary to locate an acceptable housing unit. Families are provided sufficient knowledge and information regarding the program and how to achieve maximum benefit while complying with program requirements.

When eligibility has been determined, OHFA will conduct an obligatory briefing to ensure that families know how the program works. The briefing will provide a broad description of owner and family responsibilities, OHFA’sprocedures, and how to lease a unit. The family will also receive a briefing packet, which provides more detailed information about the program including the benefits of moving outside areas of poverty and minority concentration.

ISSUANCE OF VOUCHERS

When financial support is available, OHFA will issue vouchers to applicants whose eligibility has been determined. The number of vouchers issued must ensure that OHFA stays as close as possible to100 percent lease-up. OHFA performs a monthly calculation electronically to determine whether applications can be processed, the number of vouchers that can be issued, and to what extent the PHA can over-issue (issue more vouchers than the budget allows to achieve lease up).

OHFA may over-issue vouchers only to the extent essential to meet leasing goals. All vouchers that are over-issued will be honored, as long as there is funding to support the over-issued vouchers. If OHFA finds it is over-leased, it must adjust future issuance of vouchers in order not to exceed the ACC budget limitations over the fiscal year.

Vouchers: Not Yet Dead

The Washington, D.C., voucher program is not dead yet. It has set its execution date, slipping a provision into last month’s omnibus spending bill to end the program unless it is re-authorized by Congress next year. With anti-voucher members of Congress in a clear majority, supporters of the program are glum about its political prospects. The pall has extended to voucher programs around the country. If our legislators can terminate the D.C. program without too much political cost, might they decide to become serial killers, targeting vulnerable programs in Milwaukee, Ohio, and elsewhere?

Oddly, Congress chooses to act even as the programs continue to produce solid evidence of academic effectiveness. Just this week, the U.S. Department of Education released the results of its official evaluation of the D.C. voucher program. It found that students selected by lottery to receive vouchers to attend private schools made significantly greater progress in reading than did lottery losers who stayed in D.C. district or charter schools. A student attending a private school with a voucher typically was four months ahead of the average public-school student in reading after three years. The first cohort of voucher students to participate in the program was ahead of their public-school counterparts by the equivalent of 19 months of reading instruction after three years in private schools.

Education reformers need to get out of their huff. First, they need to keep goals for educational improvement realistic and continue pursuing evidence-backed reforms like vouchers, even if they are currently out of favor in national politics. And the positive evidence may well save D.C. vouchers and others facing execution. They may even get a reprieve from President Obama, who has declared: “If there was any argument for vouchers it was, all right, let’s see if this experiment works, and then if it does, whatever my preconceptions, my attitude is you do what works for the kids.” If doing what works for the kids decides the issue, vouchers have a very promising future.

Why I am opposed to vouchers.

I have had several queries asking about my position on vouchers or asking why I oppose them. Here is my response.

1. The main reason I oppose universal vouchers in Utah is financial. It will cost Utah money and we don't have any to spare.

* Before I ran for school board, I was in support of vouchers because I believed that they would save Utah taxpayers money and that they would put more dollars into public ed. That argument is basically the "Oreo cookie" analogy that was given during the voucher debates. I have learned that education funding isn't quite as simple as Oreo cookies and that the truth about vouchers is that they will cost Utah a great deal of money.

* Utah currently has 19,000 private school students that Utah is paying NOTHING for. In order for vouchers to save us any money, we would need to have OVER 19,000 additional students leave public schools.

* The Oreo cookie analogy used an average per pupil cost. But the truth is, that some students cost much more to educate and some cost less. That's what "average" is. As a general rule, the students who leave to attend private schools with a voucher are the "below average" ($$) to educate. The most expensive students are left behind to educate with less money.

2. Another reason I oppose universal vouchers is that I don't believe that taxpayers should subsidize wealthy parents to send their children to private schools. I have friends who send their children to expensive private schools and they agreed with me on this issue.

* I believe that parents already have educational "choice" for their children: public schools, private schools, charter schools, home school. Proponents for universal vouchers say that the parents who choose private school are "paying twice" because they pay taxes for public schools. EVERYONE pays taxes, including old people, businesses and childless couples.

* Here is a dangerous assumption: that the taxes we individually pay should serve us personally. If we each have a right to "use" what we pay in taxes for our personal use, then we have lost the whole idea of cities, counties, states or country. We collectively pay taxes to serve the common good: roads, sewers, electricity, police, parks, libraries, schools, etc. To say that those who send their children to private schools should get some of ‘their' tax dollars back is like suggesting that those of us who don't use the libraries, roads, buses, postal services, or parks should not have to pay for them. If I choose to use a private security company for my protection, can I have a rebate on my taxes please? Can I have a tax credit for sending my kids to a private university? Ridiculous. Our forebears understood the common good that comes from an educated society. They recognized that the best way to improve the circumstances of the poor is to educate them. Public schools do that.

3. There is not a single other state in the nation who has passed universal vouchers. The largest voucher programs are in two of the lowest performing districts in the nation. (Milwaukee and Washington DC)

* I have spent the past six years studying vouchers. I have a huge file about vouchers in other states and the effect they are having both economically and educationally. The conclusion: vouchers are NOT working. Why should the state who is dead last in per pupil funding be the national experiment?

* There are some interesting studies from the Utah Foundation that talk about education funding in Utah. The last one is entitled "How Much Can $3,702 Buy?" That's how far below average Utah is in comparison with 10 other states with similar demographics. I believe we need to make a greater effort in Utah to adequately fund our student's education and vouchers are not the way.

One last concern I have about vouchers. There are some who believe that ALL education should be privatized and vouchers is the way to do that. I believe that shifting the burden of education to families not only will burden families, but could lead to a great division in our society based on the opportunities for education that some will have and others will not. Education based on the ability to pay. Public education is a great unifying force in our country, giving opportunity to every child to seek the American dream. Our forebears recognized the value of an educated populace and decided it was a "common good" worth funding. I agree.