As published in the Omaha World-Herald.
No issue is more important to Nebraskans than K-12 education, and our state’s public schools consistently perform well, boasting one of the nation’s highest four-year high school graduation rates and its seventh-highest college-going rate.
But in recent years, some policymakers, including the governor, have begun supporting a troubling school privatization agenda that includes charter schools, vouchers, and tax credits — all of which take taxpayer dollars away from public schools and funnel them toward private entities. One such bill, Legislative Bill 295, misnamed the “Opportunity Scholarships Act,” is a particular threat this legislative session, which runs until April 18. LB 295 would provide dollar-for-dollar tax credits to donors to private school scholarship funds. Public school students, parents and supporters should be concerned for three main reasons: The bill would hurt public schools, fail to serve the low-income students that proponents claim would be helped and cost the state money during an existing budget crisis. Supporters of the bill have been spreading troubling misinformation for months, and it’s time to set the record straight. Proponents of LB 295 claim it won’t hurt public schools. Not true. The tax credit would keep dollars out of our state’s general fund that could be used for public education and other critical programs — an advantage we don’t provide for other kinds of charitable giving. Donations to private school scholarship organizations are already tax-deductible, as are donations to any 501(c)3 nonprofit organization, including churches. Which begs the question of who really benefits under this bill — and the answer is wealthy individual and corporate donors. Quite simply, you need money to donate to take advantage of the tax credit. The cost to Nebraskans will start at $2 million a year in the bill’s first fiscal year and go up to $10 million a year under the current bill. A recent amendment filed by State Sen. Jim Smith would kick the fiscal impacts a year into the future, apparently to get around Speaker Jim Scheer’s rule that no bill with a fiscal impact will be considered this legislative session.
But that’s a red herring — in state after state that has enacted programs like these, the costs grow over time. Nebraska already ranks 49th in the nation for state funding to education, and according to the state’s own school funding formula, Nebraska has only fully funded its public schools in three out of the last 16 years. Embedded in LB 295 are not just tax benefits for wealthy donors, including corporations, but also the opportunity for these donors to turn a profit from taxpayer dollars. According to a report released last year, on top of the dollar-for-dollar state tax reduction, some donors can claim a charitable giving deduction on their federal tax return.
In other words, for the very wealthiest Nebraskans, the value of their tax benefits received at both the state and federal levels could actually exceed the amount of their donation. In several states with similar tax credits on the books, Georgia and South Carolina among them, the programs are advertised on television and online as a moneymaking opportunity.
Finally, LB 295 would not save the state money, despite what its proponents claim. An analysis by Nebraska’s Legislative Fiscal Office, consistent with results in other states, found the number of students leaving public schools would be too widely dispersed to produce cost savings. In state after state, tax credits do not improve low-income families’ access to expensive private schools, but they do devastate neighborhood public schools. Instead of advancing LB 295, Nebraska needs to fully fund its excellent public schools. Continued commitment from state and local leaders will help ensure our state’s bright future by investing in the next generation of Nebraskans.