Scholarship Bill Won’t Do Much Good for Rural Nebraska Kids
Bill 753, which would send $25 million to private schools under the guise of excessive tax breaks for donations to scholarship organizations, would do next to nothing for rural Nebraska and our children.
In my eight years in the Nebraska Legislature and the Revenue Committee, I have worked hard to ensure that rural Nebraska has a strong voice to protect the interests of property owners while ensuring our students have access to an excellent education. Therefore, I am against LB 753.
It will cost the state $25 million a year in tax revenue – and more than $100 million a year in the not too distant future – to support more students in private schools; however, only about 3,000 students—or 10% of all Nebraska students attending private schools—live in rural areas. This is only about 3% of all rural students statewide.
The Opportunity Scholarships Bill also prioritizes students already on scholarships and their siblings, meaning that even if new private schools open in rural areas, priority will still be given to predominantly urban students who are already receiving scholarship. Rural students will again be among the priorities of public funding.
Rural schools and students will also have a low priority for funding per student. Under a recent proposal, the state should send $1,500 per student to public schools. However, under LB 753, the maximum scholarship amount is set at 75% of each student’s average cost of tuition in public schools. For 2023, that amount is over $12,000, meaning that each student eligible for the bill could get around $9,000 to attend a private school. Overall, it seems unfair that students in private schools contribute six times as much to the state as students in rural public schools.
This difference will not be offset by the savings that rural schools can make by sending more children to private schools, because even if a couple of students leave, the school still has to turn on the lights, heat the buildings and give the children rides. This means that their cost per student will increase, and since the scholarships are calculated using this number, the scholarships will also increase. Since rural schools spend more per student, the state will pay more for students in private schools.
So if rural children don’t win, maybe our taxpayers will? Unlikely, as there is no cap on the amount that an individual taxpayer – be it an individual or a corporation – can claim, as long as it does not exceed half of their total tax liability.
Thus, a multinational corporation that owes the state more than $50 million in income taxes can donate on January 1 and claim the full $25 million of the loan, leaving nothing to other donors. In other states, this has been the case when full disbursement of loans is required on the first day they become available, leaving nothing for ordinary donors.
Nor can it be said that people are no longer benefiting from these deductions. Anyone who makes a $10,000 donation to a scholarship organization can now claim up to $664 in their taxes, just as if they donated to a public school fund, their church, or cancer research. However, under this bill, that same $10,000 donation to a scholarship organization is inflated from a $664 deduction to a potential $10,000 loan—effectively funneling tax dollars to charity, which we don’t do with either. what other charities.
Why do scholarship providers justify such treatment? Because the state is not allowed to give them money directly in accordance with our constitution, which expressly forbids directing public money to private education. LB 753 is a clever workaround to this provision.
If we really think that private schools need public dollars, then we should work to change the constitution, not implement mechanisms that circumvent its provisions in favor of pet goals. And if it is already constitutional, then do it right, through appropriations.
Instead, the constitution calls on the Legislative Assembly to provide free education to all students. This means that all students must have access to free education in our public schools, and if there is a problem with these schools, then the legislature must solve it.
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