Lesser-known Nevada private school scholarship program is off to a slow start

A new Nevada program that allows parents to claim state per-pupil education funding and use it toward private school is garnering national headlines and hundreds of applications, but its lesser-known and higher-paying cousin is off to a slow start.

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Organizations administering the Nevada Educational Choice Scholarship, which allows businesses a tax credit if they donate toward scholarships, have collected enough donations for 47 scholarships so far. That's well below the 600 or 700 allowed under the new law creating the program.

"Right now, I am concerned that taxpayer organizations need to step forward with up to $5 million for families as quickly as possible," state Superintendent Dale Erquiaga told the Reno Gazette-Journal (http://on.rgj.com/1WwZeaR).

Lawmakers passed a bill this spring allowing the state to give away up to $5 million each year in tax credits to businesses that donate to one of five state-approved scholarship organizations. Those organizations then disburse up to $7,775 per student.

"It's a no-brainer. We're going to have to pay it any way," said Terri Mahannah, operations director for the Reno Diagnostics Center, which donated $40,000. "I can't think of a business owner who wouldn't want to participate."

But the Nevada Department of Taxation has received only $2.1 million in tax-credit requests — less than half the limit — while scholarship organizations have collected only $390,000 so far.

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Representatives from scholarship organizations said the demand is outpacing the supply. Michele Morgan-Devore, whose Las Vegas nonprofit Dinosaurs and Roses is eligible to disburse scholarships but was slow to receive donations from businesses, said she has heard from at least 100 families interested in participating.

"We've had a huge outpouring of people wanting scholarships," Morgan-Devore told the newspaper.

Students are eligible for the scholarship if their family income doesn't exceed 300 percent of the federal poverty line. That amounts to about $72,750 for a family of four.

The program has received less attention than the new Education Saving Accounts, which allow an unlimited number of students to claim their state per-pupil funding allotment and use it for private school. Payouts, which can be up to $5,700 per student per year, are not expected to start coming until the spring.

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Information from: Reno Gazette-Journal, http://www.rgj.com