It has come to my attention that there is some confusion about my priority bill LB 295, the Children’s Scholarship Tax Credit. Below is a fact sheet on this bill which will hopefully help clear up some of the confusion.
Myth: LB 295 takes money away from public schools.
Fact: This is not true. LB 295 does not take money away from public schools or any other program. If LB 295 becomes law, there will be no appropriation of state funds.
Myth: It is unconstitutional.
Fact: Tax deductions/credits for contributions to private institutions, which in turn provide for a public good, is a long-held matter of law. Numerous courts—including the United State Supreme Court—have effectively upheld tax-credit scholarships as clearly constitutional. In fact, each of these nine lawsuits brought against such laws in other states have ultimately failed. Courts have consistently ruled that (1) tax-credit scholarships do not demonstrably reduce state or local budgets or otherwise cause any harm, and (2) tax-credit scholarships are privately funded and thus do not expend taxpayer dollars. As stated in the previous myth, tax incentives are not public appropriations. For examples of court cases, see Arizona Christian School Tuition Organization v. Winn, 563 U.S. 125 (US Supreme Court, 2011), Gaddy v. Georgia Dep’t of Rev., 301 Ga. 552 (Ga. Supreme Court, 2017), McCall v. Scott, 199 So.3d 359 (Fla First Dist. Court of Appeal, 2016) (affirmed by Fla. Supreme Court on Jan. 18, 2017).
Myth: LB 295 will raise taxes.
Fact: LB 295 will continue a long-held tradition of allowing for favorable tax policy, which in turn educates over 38,000 children in private schools in Nebraska today at no cost to local or state taxpayers. Today, of the 350,000 K-12 students in Nebraska, 38,000 attend a private school, saving the state and local taxpayers $453,948,000 (38,000 x $11,946 [NE student cost per U.S. Census Bureau 2015]).
Myth: The students whose parents would access increased opportunities created by LB 295 are so dispersed, it will not save the state or local taxpayers any money.
Fact: Though the fiscal office states this as an assumption, they offer no evidence to support the claim. One third of Nebraska’s K-12 students live in one county, Douglas County. Nearly, two thirds of all K-12 students live in just three counties, Douglas, Lancaster and Sarpy Counties. The fiscal office’s claim that students are so widely dispersed LB 295 will not save money is not a sound claim. It should also be noted that OPS is already overcrowded and building new schools and updating older ones, which now requires almost a billion dollars in bonding indebtedness to meet their growing needs. Other schools in Douglas County are also requesting millions of dollars in new bonding authority because of overcrowding.
In just Douglas County, thousands of parents already opt their children into a school not in their home district. The largest number of students opt out of Omaha Public Schools into another area school and the state through the TEEOSA formula pays for it. See list below:
2,090 OPS students opt into Millard. Costs 2,090 x $9,500 = $19,855,000
1,658 OPS students opt into Westside. Costs 1,658 x $9,500 = $15,751,000
858 OPS students opt into Bellevue. Costs 858 x $9,500 = $8,151,000
581 OPS students opt into Ralston. Costs 581 x $9,500 = $5,519,500
456 OPS students opt in Papillion-La Vista. Costs 456 x $9,500 = $4,332,000
Total funding for OPS students opting into other school districts = $53,608,500
Statewide, through the TEEOSA formula this year, $98,904,820 of option enrollment funding will flow to school districts, but as outlined above, over half of those students opting into another school district are in only one school district, OPS.
If this were a discussion about sound policy and saving money, LB 295 would sail through the Legislature. It is both the state’s fiscal interest and in the interest of Nebraska families to pass LB 295.