Give a tax break for college
Published 12:00 am Thursday, May 1, 2008
The issue: As college tuition rises, the state Legislature sends a tax break bill to Alabama parents who save for college.
Our position: The governor should sign this without any hesitation.
College tuition is on the rise.
The University of Alabama system trustees voted recently to raise tuition at the University of Alabama at Birmingham and the College of community Health and Sciences at the University of Alabama.
Recent news reports say the tuition costs will increase 10 percent for students at the School of Optometry, 12 percent for the School of Medicine and 15 percent for the School of Dentistry at UAB.
The increases become effective in July. The rise in tuition for the University of Alabama System should cover the 10.7 percent cut recommended by the House, which also has recommended an 11.1 cut for the University of Alabama.
Those figures come from the $6.36 billion education budget passed by the House on Wednesday that contains 11 percent less for higher education for the fiscal year that begins in July.
But Gov. Bob Riley had recommended a 14 percent cut.
Alabamians should be so grateful for the 3 percent margin.
On Thursday, the Alabama Senate voted to give final passage to a tax break bill that unanimously passed the House in March.
The measure now goes to the governor. It would provide a state income tax deduction of up to $5,000 a year for contributions to either of Alabama&8217;s two state-sponsored college savings plans.
The Prepaid Affordable College Tuition Plan allows parents to pay into it when a child is young for four years of college tuition.
The Alabama Higher Education 629 Fund allows parents to invest money and use the proceeds to pay college expenses. Children are exempt from paying state and federal income tax on the money withdrawn from the two plans.
The tax break bill is tied to a revenue-generating measure that would have out-of-state residents pay taxes on property sold in Alabama by withholding the taxes at the time of the sale, rather than have them pay later.
The estimated money generated from this companion bill would more than cover the tax breaks given to parents who save for their children&8217;s futures.
These are hard economic times for everyone. Saving money for college is difficult at best. This bill passed by the Legislature helps combat the squeeze increasing tuition places on families by providing rewards for tightening the belt a little more and putting away dollars for a student&8217;s future. This is a good measure, and these two programs available through the state treasurer&8217;s office are solid ones.
Riley should sign the tax break bill.