Opportunity Scholarships Act Advances From Committee For the First Time Ever
May 23, 2017 -- After more than a decade of trying, the Opportunity Scholarships Act (LB 295) has advanced out of committee and to the floor for debate by the entire Nebraska Legislature.
On the penultimate day of the Legislature, as state senators prepared to head home for the remainder of 2017, the Revenue Committee held a last-minute “executive session” solely to consider the fate of the Opportunity Scholarships Act. After a heated internal discussion, Chairman Jim Smith (who also sponsored the bill) was able to collect the necessary votes.
The Committee voted to advance the bill by the slimmest of margins – 5 votes in favor, and 3 against. As a result, LB 295 will be ready and available for debate by the entire Legislature next year, from the moment senators return in January 2018 for the second year of their biennium.
The Committee adopted an important amendment (AM 1418) in order to get to 5 favorable votes. The Amendment makes the following changes:
- Drops the annual aggregate tax credit cap from $10 million to $2 million in Year 1.
- Allows the annual aggregate credit to grow by 20% annually if the cap is reached, but never beyond $10 million total.
- Caps the amount of annual credit available to individuals at $5,000; and to married couples filing jointly at $10,000.
- Caps the annual credit available to partnerships, LLCs, and S-Corporations at $50,000.
- Caps the annual credit available to C-Corporations at $150,000.
This historic moment was only possible because of your prayers and support. We can’t thank you enough for your time and your efforts to learn more about the bill, to pray for its success and the students who would benefit, and to reach out to your senator to encourage their support.
There is much work still to do. The Nebraska Catholic Conference looks forward to working more closely with you this upcoming summer and fall as we prepare for the debate in 2018.
As the Church tells us, it is the government’s responsibility to ensure “that parents are truly free to choose according to their conscience the schools they want for their children.” Gravissimum Educationis §6 (Vatican II).
LB 295 would be a critical, historic step for fulfilling this obligation in Nebraska. With your further support and prayers, we know that success is in sight.
Please stay tuned for further updates and information about how you can help.
The Nebraska Catholic Conference continues to strive to pass the Opportunity Scholarship Act (LB 295). Following is an update regarding: (a) the bill’s progress, (b) how you can help.
For a brief background about the bill, click here.
Testimony in Support of Opportunity Scholarships (LB 295)
Committee Hearing Happenings:
Influential Support: LB 295 had a hearing before the Revenue Committee on January 26th, 2017, immediately following the “School Choice Rally” on the steps of the State Capitol (which included such speakers as Lt. Gov. Mike Foley and Tax Commissioner Tony Fulton).
The bill is sponsored by the chairman of the Revenue Committee, Senator Jim Smith, who noted at the hearing that, when his children were growing up, they attended both private and public schools – and that more families should have the same opportunities. Sen. Smith explained that private schools were just a better “fit” for his children at different stages of their upbringing.
A Personal Story: Also testifying was Jayleesha Cooper, an 8th grader at Holy Name School in Omaha. After attending public schools through 2nd grade, her mother recognized that Jayleesha wasn’t reaching her full potential. Her mother worked two jobs to begin sending Jayleesha and her brother to Holy Name. There, they found small classroom sizes, community, and faith.
At Holy Name, “we are encouraged to let our ability shine to the fullest,” Jayleesha said. “I never feel like I can’t be myself and no one ever judges me for the way I am. Everyone loves me for me at Holy Name.”
This fall, with the help of many others’ financial generosity, she will attend Duchesne Academy of the Sacred Heart in Omaha.
But not everyone will be so fortunate.
“I have a cousin who is in public school and wants to go to Duchesne, but there aren’t enough funds to allow that many people to go on scholarship,” Jayleesha said. “If we had opportunity scholarships, then more kids would be able to choose a school that is best for them.”
How You Can Help
LB 295 currently awaits a vote in the Revenue Committee. It has the likely support of the majority of the Committee, but we still need your help in garnering support and building a culture that supports school choice.
For information about how you can help in the coming months, click here.
Opportunity Scholarships Act (LB 295)
Parental Choice and State Savings
The Church says it well: “Parents, who have the primary and inalienable right and duty to educate their children, must enjoy true liberty in their choice of schools. Consequently, the public power . . . must see to it . . . that parents are truly free to choose according to their conscience the schools they want for their children.”1
Today, Nebraska is one of only six states without publicly supported options for a non-public education. Thus, it is impossible for many parents to choose the education best suited for their children.
Opportunity Scholarships provide a much-needed answer. Similar laws exist in 17 other states – including Kansas, Iowa, and South Dakota. Their time has come in Nebraska.
Overview: Opportunity Scholarships have a two-fold purpose: (1) providing low- and middle-income students with scholarships for non-public schools, and (2) realizing net fiscal savings.
(1) Parental Choice: LB 295 enacts a large tax credit for private donations to non-profit “Scholarship Granting Organizations” (SGOs), which in turn provide scholarships to eligible students for use at non-public schools. It’s simple:
- An individual or businesses donates to an SGO and receives a dollar-for-dollar tax credit – i.e., one dollar less in taxes for every dollar donated.
- The SGO then awards scholarships to students from low- and middle-income families – i.e., those with incomes no greater than twice the Free-and-Reduced Lunch eligibility level (about $89,000 for a family of four).
- The Act prohibits the state from using Opportunity Scholarships as a reason to further regulate non-public schools.
- The aggregate allowable tax credit would be “capped” at $10 million a year. However, the cap would increase when the prior year’s donations near the maximum credit amount.
- “SGOs” are no mystery: Children’s Scholarship Fund in Omaha serves more than 1,800 non-public school students annually and turns down another 600 students a year for lack of funding.
(2) State Savings: LB 295 leads to direct state and local savings.
- Opportunity Scholarships are funded exclusively by private donations to SGOs. Thus, they do not divert any public money from public to non-public schools.
- Further, LB 295 limits eligibility mostly to students transferring from public to non-public schools, or who would otherwise be in public school but for an Opportunity Scholarship.2
- This creates a direct savings for the state, because such students will not receive state aid in a non-public school. It also leads to a significant reduction in expenses for local schools.
- In Iowa, Opportunity Scholarships have saved at least $280 million since their enactment in 2006.3
- In 17 states overall, Opportunity Scholarships have saved $1.7 to $3.4 billion to date.4
Conclusion: Opportunity Scholarships breathe life into a parent’s right to choose the education best suited for their child. And they produce a large state savings to boot. The time for Opportunity Scholarships in Nebraska is now. Too many families are depending on it.