Perdue pushes for permanent 529 exemptions
Released May 17, 2005

         WASHINGTON, D.C. – National Association of State Treasurers President John Perdue voiced support Tuesday for federal legislation that will assure permanent tax exemptions for college savings plans.

         West Virginia Treasurer Perdue appeared with, among others, Rep. Melissa Hart, R-Pa., and Rep. Earl Pomeroy, D-N.D., at the Cannon House Office Building. Hart and Pomeroy are co-authors of legislation that would make contributions to IRS Section 529 college savings plans exempt from federal taxes forever.

         Legislation announced Tuesday is known as the “College 529 InvEST Act of 2005.” NAST and its college savings plan arm, the College Savings Plan Network, sponsored the conference.

         Currently, parents or guardians contributing to such a plan may withdraw the money tax free when used for a qualified higher education expense. That exemption is set to expire at the end of 2010.

         “Families need that tax certainty,” said Perdue, in this third term as treasurer, “to continue to make monthly payments to these plans. These plans are tailored to middle-income Americans who deserve an incentive to invest.”

        West Virginia’s SMART529 plans, for instance, carry more than 60,000 accounts. Three-quarters of those plans have less than $10,000 in them. Nearly a fifth carry balances of $1,000 or less. The most common monthly payment is between $50 and $100 a month.

        “It’s true that our federal government is running at a considerable deficit,” Perdue said. “But the reasons are a war and huge tax cuts for the rich. Removing this important exemption is not going to make much of a dent in the deficit. What’s more, it would send a harsh message to working families that their federal government doesn’t care a great deal about children’s future prospects.”