On Monday, the House Education Committee approved a large expansion to the Non Public School tax Credit Program that was initially approved in 2014. The changes are outlined below. In the current year less than $1M in credits have been claim and are targeted to low income students. This new proposal expands th student eligibility as well as expands the program to a 90% tax credit for individual taxpayers as well as corporations. The Department of Revenue says it will cost the state additional in revenue and the amount is NOT factored into Governor Brownback’s budget. It also has an automatic accelerator clause that many Legislators cited was the reason they moved to a block grant formula for public schools. HB 2457 is a bad bill and we have a very good chance of killing it on the House floor if we contact our legislators.
Please contact you House members this week. The bill could run as early as Thursday or Friday.
Note on impact of HB 2457 as amended by the House Education Committee:
Changes Made in Committee:
Tax credit reduced from 100% to 90%. Testimony from the Department of Revenue was that the percentage in the bill is significantly higher than other tax credits the state offers.
The student qualification level for the scholarship was reduced from 250% of federal poverty level to 185% of FPL. For a family of four that would mean a student would qualify for assistance if the adjusted gross income of the household does not exceed $44,000.
An escalation clause was included in the bill so that beginning tax year 2016 and any year going forward, if the use of the program exceeds 90% of the total allocation, then the amount for the next taxable year increase by 125%. Therefore the $10 million cap is in place until a time that 90% of the funds are allocated and in the following tax year the program automatically increase without any action necessary by the Governor and the Legislature.
Facts about the bill presented by the Revisor of Statutes (ROS) and the Department of Revenue (DOR) under direct questioning in committee:
Fiscal Note developed by DOR is $8.5 million. Current year expenditures for the programs are $776,000. Upon direct questioning, DOR indicated should the bill become law additional dollars will have to be allocated based on the estimate. The estimate was done before the committee amendment.
The bill expands the number of taxpayers that could utilize the program from strictly corporate tax filers to individual tax payers. DOR testified that they believe this change is a significant reason why the popularity of the program will increase drastically.
ROS testified that there is no cap on the amount an individual or corporate taxpayer can claim. Tax credits are distributed on a first come-first served basis.
Although much attention in committee focused on private schools the language defining what schools qualify is much broader. As defined it would cover any non-public school. So the definition would allow non-accredited schools, home schools, essentially any entity teaching any curriculum.
The bill continues to require no testing and no accountability on behalf of any qualifying school. ALEC, in its model policies for these programs, suggests all qualifying schools should be required to test all students annually in accordance with standards adopted by the state’s public schools AND all parents should be given a copy of those test results annually.
Due to these budget ramifications, lack of accountability and the general lack of oversight pf the legislation proposed we believe HB 2457 warrants a NO vote when debated on the House floor.