The Joint Budget Committee this morning approved special language for the treasurer’s office appropriation that will enable a tax deduction for contributions to investment funds set up to pay for private school education in grades K-12 as well as college, for which the 529 plans were originally intended. It will exempt earnings on those accounts from taxation, essentially creating a private school voucher system.
This could cost the state more than $5 million in tax revenue, a state subsidy of private school education, done without a full debate on a free-standing piece of legislation. Sen. Jason Rapert offered the special language yesterday. Democrats on the committee unsuccessfully objected to the measure, essentially a private school voucher. Democrats have also objected with the same success the privatization of public schools by charter operators. That process is proceeding at a galloping pace in Little Rock, where voters no longer have a say in operation of schools taken over by the state.
Sen. Joyce Elliott noted that the
Demonstrated, well-documented need for special needs students with catastrophic needs. These are PUBLIC SCHOOL students, mind you.
If we blatantly refuse to fund such a need, it is a joke to claim we are adequately funding our public schools. How do we ever reach
More Excellence, let alone world-class, if we are not even committed to adequacy for our PUBLIC SCHOOLS?
Passage of the measure drew criticism from Arkansas Advocates for Children and Families, Arkansas Citizens First Congress, Rural Community Alliance
In a letter they wrote:
Our first concern is that this amendment creates an education voucher system in Arkansas – a dramatic change in education policy. It is very similar to multiple bills introduced during the last General Assembly that were rejected by the legislature. All of our concerns about previous voucher bills apply to this new amendment:
There are far more effective uses of state dollars to improve opportunities for Arkansas students than private school vouchers. The amendment will cost the state at least $5.2 million in year one. Budgets are sets of priorities, and vouchers are simply not where Arkansas should be prioritizing our scarce resources to provide excellent educational opportunities to all students. What public debate has the legislature had to prioritize $5.2 million for private school vouchers over other educational needs such as improving pre-k programs, expanding after-school and summer programs, developing new teachers, improving opportunities for low-income students or a host of other far more proven education reforms?
Vouchers, as created by this amendment, allow our public tax dollars to go to unaccountable, private schools. These private schools are not required to meet Arkansas standards for education, accountability or transparency. This amendment would allow public tax dollars to be spent on private, segregated academies that discriminate against students based on their race, religion, disability or a host of other factors. Our tax dollars should not support segregated schools.
This amendment, as most vouchers, make the achievement gap between poor and wealthy students worse. This voucher is in fact a $5.2 million tax cut that will vastly benefit wealthier families who have 529 accounts and who send their children to private schools. At the same time it leaves less resources in the state budget to provide educational opportunities to public school students. Not all families have the resources to create an education savings account, in fact a majority of Arkansas public school students are low-income and qualify for free and reduced lunches. This voucher proposal makes our education system less equitable.
We believe this amendment is such a substantive change to education policy that it is outside the scope of the normal business of a fiscal session. The creation of a school voucher system in Arkansas deserves the time and transparency to be considered in the regular education committees of the House and Senate. Many of our public schools are already under resourced – we should make allocating state funds for education a very careful and thoughtful process led by our education committees. The voucher bills of the 2017 legislative session garnered great public attention, media exposure and testimony. We have many constituents who have questions about this proposal and who would like to testify about it. But most of the public did not know about this amendment to the budget before it came before the Special Rules Committee.
We also believe this amendment circumvents the important work of the Tax Reform Taskforce and the House and Senate Revenue and Tax Committees. The sponsors of the amendment claim that this is merely bringing Arkansas tax code up to the new federal tax law. Changes to Arkansas tax code should be done holistically and with a view of their collective impact on our overall state budget and priorities.
The Tax Reform Taskforce may potentially recommend many changes to Arkansas tax code and those recommendations will likely go before the House and Senate Revenue and Tax Committees. They will likely review and consider a range of state tax policies in response to recent federal tax law changes during the 2019 legislative session. Why is the 529 the only new federal tax change that is being considered during the fiscal session? And it is not the case that Arkansas tax laws always align with federal tax policy. For example, we would like to see a state Earned Income Tax Credit for the working poor that matches the federal EITC prioritized.
In closing, we believe that private school vouchers are bad policy for Arkansas. We believe changes of this magnitude should be fully vetted in a transparent process through the appropriate committees in a Regular Session of the General Assembly. We believe the public should be aware of the proposed changes and have time to participate in the process of reviewing the proposal and offer comments and testimony to their lawmakers. We believe this amendment, at this time, abuses the purpose of a fiscal session and circumvents the work of the Education Committees of the legislature as well as the Tax Reform Taskforce and the House and Senate Revenue and Tax Committees.
There once was a time Gov. Asa Hutchinson spoke out against school vouchers. Yesterday, he said he regretted the measure was being undertaken outside normal order, but, hey,
Can Democrats muster a one-fourth, plus one vote in either House to block this appropriation with the amendment?