Originally created 04/24/98

Senate committee favors tuition tax credits



COLUMBIA -- South Carolina's college students could get tax credits in January instead of merit scholarships in August under a plan placed in the state budget by a Senate committee Thursday.

The Senate's budget writers decided on their last day of deliberation to give students tax credits worth 25 percent of their yearly college tuition if they keep a B average in high school and score at least a 1,000 on the SAT.

Students who don't meet that standard would still get tax credits worth 20 percent of their college tuition, senators said.

Students or parents could take advantage of the credit, said Nikki Setzler, D-West Columbia. "Whoever pays the tuition gets the credit."

Now the Republican-controlled House and Democrat-controlled Senate will clash over tuition assistance in the legislative budget conference committee.

Republican Gov. David Beasley and the House wanted the Palmetto LIFE scholarship plan, which would give only B students $2,000 scholarships to go to four-year colleges or universities. Students going to two-year schools or technical colleges would get $1,000.

"They sound like they are trying to find a way not to pass the governor's LIFE scholarship plan," Beasley spokesman Gary Karr said.

The tax credit covers all two- and four-year colleges and universities in South Carolina.

"Our subcommittee felt very strongly that we have got to address the escalating cost of higher education in South Carolina," Mr. Setzler said.

South Carolina has the third-highest tuition in the Southeast, behind Virginia and Maryland, Mr. Setzler said.

About 17,000 students attended an in-state college or university in 1997, officials said. The tax credit plan will cost the state about $7 million, said Mr. Setzler, who heads the committee's education subcommittee.

The LIFE scholarship plan would cost the state about $19 million and cover 11,000 students, officials said.

Private school students would be able to take tax credits based on the four-year average of public universities' tuition, Mr. Setzler said. Students would have to take 15 hours per semester, and must be making "satisfactory progress toward graduation," Mr. Setzler said.

Under program rules, students cannot claim the deduction for more than eight consecutive semesters, cannot have criminal records and cannot have defaulted on a federal loan.

Students would need to maintain a B average to keep the full credit.

The full Senate still must approve of the state budget. It probably will be debated in the Senate the first week of May.

Sens. Verne Smith, D-Greer, and David Thomas, R-Greenville, tried to get the committee to let students who go to Bob Jones University use the tax credits, but lost the attempt 7-8. The House included the unaccredited, private Greenville university in its LIFE or Landmark Incentive For Education scholarship plan.

"We'll try again on the floor," Mr. Thomas said.

The Senate committee decided Wednesday to ask the state to borrow money so it could pay for education and health-care improvements with existing state money. A $100 million bond bill would pay for projects like a Columbia conference center and arena, Littlejohn Coliseum and the deepening of Charleston Harbor. With the bond bill, the Senate's budget comes to about $575 million.

The House budget came to about $410 million, while Gov. David Beasley's budget was about $392 million. Both the House and Mr. Beasley plan to oppose the bond bill idea.