Bill That Offers Tax Credits For Private Schools Stalls In Legislature

Legislative Bill (LB) 364, called the Opportunity Scholarship Tax Credit and authored by Senator Lou Ann Linehan (District 39) of Elkhorn, was intended to create a tax credit for those who donate to an organization that provides private school scholarships. Supporters of the measure were unable to reach the 33 votes needed to overcome a filibuster and force a vote on the bill.Among the supporters of the bill is the Nebraska Catholic Conference (NCC), which said, “Every single child deserves to go to a school that best suits his or her needs, regardless of income or zip code. But in Nebraska, this is not the reality.”NCC wrote on the organization's website, “LB364 (Opportunity Scholarships Act) will create a state income tax credit for donations to scholarship granting organizations, i.e., nonprofits that turn nearly all their revenue into private-school scholarships for low-income students. The bill allows for private, not public funds, for these scholarships.”The Nebraska State Education Association (NSEA) opposed the measure, claiming, “The tax credits would reduce state revenues that are needed to fund public K-12 schools and force schools to rely more on property taxes.”NSEA issued a statement that said, in part, “The measure would cost taxpayers $10 million a year with their public tax dollars going to private schools. This private school scholarship tax credit scheme would be among the most generous in the nation. It is significantly more generous than any other credit, including that for other charitable donations. For example, a $10,000 donation to a scholarship-granting organization would be worth $10,000 to the taxpayer, while a $10,000 donation to a public school foundation or other charity would only be worth $684 for someone paying at the top personal income tax rate.”Local school administrators are also opposed. Fairbury Public Schools Superintendent Stephen Grizzle told FJN, “I am not a fan of LB 364. I am sure we will continue to have to work against it. Until we are able to address the state funding for schools inadequacy, we should not divert any state funds for private schools. Public education is in the constitution and private education is not. Therefore, public education should be the focus for the legislatures and not private education.”Randy Schlueter, Superintendent of Tri County Schools, said, “I did not support LB 364, the Opportunity Scholarship Tax Credit, because of the funding procedure for private schools. There is a difference between a tax credit and tax dedication. The credit allows someone to write off 100% of the donation from their tax liability. A tax deduction allows for a portion of the donation to be used to reduce tax liability. The credit reduces the state revenue which funds public schools. Less state revenue would reduce the state revenue to fund TEEOSA (Tax Equity & Educational Opportunities Support Act, the current school finance formula for Nebraska public schools). As a public school superintendent, I could not support the bill.”The filibuster dos not mean the bill is dead. Although LB 364 has not advanced in this legislative session as of press time, it could still appear in future sessions or may even be addressed later in this session. That is according to Randy Kort, Superintendent of Thayer Central, who said, “I believe the state of Nebraska needs to address how public education is funded in our state prior to taking action to fund private education. From my perspective it is a matter of sequencing of priorities, maybe LB 890 and LB 891 will help to define state funding to a greater extent. I also do not believe the conversation surrounding LB 364 has expired, this could return to the floor in some form within the current session.”

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