PROVIDENCE — Governor Carcieri yesterday marked what is known as “Catholic School Day” at the State House by promising to revoke a two-day-old budget proposal that threatens a state tax credit for businesses that donate scholarship money to private and parochial schools.

Asked why the governor was making an exception for this tax credit, Carcieri spokeswoman Amy Kempe said: “The governor is very supportive of this tax credit as it does help nonpublic schools.”

The credit of up to $100,000 per business was adopted by state lawmakers in 2006, at Carcieri’s urging, after an aggressive campaign by the Roman Catholic Diocese of Providence.

The problem: the tax overhaul that Republican Carcieri proposed on Tuesday would wipe out all but four of the many tax credits that can now be used to reduce personal income tax liability in Rhode Island, including this school-choice scholarship credit. But a group calling itself the Rhode Island Scholarship Alliance — and its sister organization, Rhode Island Scholarship Advocates — mounted a campaign in recent days to save the school-choice tax credit. It included this e-mail blast from its lobbying firm, Advocacy Solutions, after the advisory panel came out with its recommendations earlier this month.

“Tell Governor Carcieri to Save the Rhode Island Scholarship Tax Credit! In its two years of existence, the Rhode Island Scholarship Tax Credit has been a tremendous success, providing $2 million in scholarships to more than 300 economically disadvantaged children so that they can afford tuition at a school of their choice. ... This will end up costing Rhode Island taxpayers more than the $1-million cost of the existing tax credit program.”

Lobbyist Frank McMahon said the governor’s office seemed unaware that the budget he proposed would end the credit for businesses organized in such a way that their owners pay personal, instead of corporate, income taxes. In an interview yesterday, he said the governor’s policy director, Tim Costa, assured him in the last two days that the move was inadvertent and would be corrected.

A summary provided yesterday by the state tax department indicates that the tax credits — capped annually at $1 million — went to benefactors of the Jewish Community Day School, Providence Hebrew Day School, Sophia Academy, San Miguel School, Community Prep, the Grace School, West Bay Christian Academy, Barrington Christian Academy, All Saints Academy, Bishop McVinney School, Blessed Sacrament School, Cranston-Johnston Catholic Regional, Father Holland School, Holy Ghost School, St. Ann School, St. Elizabeth Ann Seton Academy, St. Joseph of Cluny Sisters School, St. Patrick School, St. Paul School, St. Philomena School, Woodlawn Catholic Regional, La Salle Academy, Mount St. Charles Academy, St. Mary Academy Bay View, the Bishop Francis P. Keough School, Bishop Hendricken High School and St. Raphael Academy.

In tax year 2008, $314,100 of the $1 million in tax-credited scholarship money came from so-called “S-Corporations” and other types of businesses that pay personal income taxes; $595,000 from corporations and $90,000 from insurance companies. Because the credit is capped by the state at $1 million on a fiscal year basis, the number of credited scholarships can total more than $1 million over the course of a calendar year and did so during the year that ended on June 30. FACE of RI, a group representing many of the Catholic schools, awarded $155,000 in scholarships; Rhode Island Cape, the organization representing the RI Christian School Scholarship Alliance, awarded $49,500; STEPS (Scholarships to Economically Poor Students), $693,945.00, and the Foundation for Rhode Island Day Schools, representing the two Hebrew schools, $861,785, according to the tax office.

kgregg@projo.com