School voucher plan dropped from treasurer's budget | Arkansas Blog

Thursday, March 8, 2018

School voucher plan dropped from treasurer's budget

Posted By on Thu, Mar 8, 2018 at 11:39 AM

click to enlarge WHITE FLAG: Rep. Lane Jean announces surrender on private school subsidy legislation.
  • WHITE FLAG: Rep. Lane Jean announces surrender on private school subsidy legislation.
The House today called it quits temporarily on attempting to provide a tax subsidy to K-12 private schools in the current budget session, which should end tomorrow.

It will come up as a stand-alone piece of legislation, with sponsorship by House Speaker Jeremy Gillam, at a special session to be called next week. Gillam said Gov. Asa Hutchinson had agreed to include the proposal in his call.

The House amended the treasurer's budget to include special language to provide a tax deduction of $5,000 per taxpayer for contributions to a 529 savings plan that could be withdrawn to pay for K-12 private schools. For now, the 529 plan allows tax-free withdrawals for higher education. The federal law was changed to allow use of 529s for K-12 private schools. But, significantly, the federal legislationi did NOT grant tax deductions for contributions to the savings plans. At $5,000 per taxpayer, a couple filing separately could get deductions for $10,000 and thus a reduction in pstate income taxes that would go instead to a provide school. It's a shell game version of a partial school voucher and the benefits will overwhelmingly go to high-income taxpayers, based on an analysis in Iowa. The proposal is estimated to cost Arkansas more than $5 million in lost tax revenue going instead to private schools.

Rep. Lane Jean announced the decision to send the treasurer's office budget back to Joint Budget to strip the 529 savings plan amendment. Gillam said he'd still prefer to pass the treasurer's budget with the private school subsidy, but "sometimes this process does not go as we'd like it to go."

Jean said the proposal had lost votes since yesterday, when it fell one vote short of passage, getting 74 votes when 75 are needed for an appropriation bill.

In a special session, as a stand-alone item, the measure will need only a majority vote. At its lowest level of support in the House, it hit that target. It's sponsored by Sen. Jason Rapert. Democrats formed most, but not all, of the opposition. Some see it as a raid on public school money and a diversion of state money to private school parents. Both are true, of course. Others object to making the state treatment of the accounts more favorable than federal law. It was pushed by advocates of all the iterations of school "choice" — interdistrict transfers, charter schools and voucher programs (by various euphemisms).

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