Regular Session of the 88th Texas Legislature
House Bill 619 (Shaheen) – “Relating to an insurance premium tax credit for contributions made to certain educational assistance organizations.”
This bill proposes to provide a premium tax credit for qualified entities to be administered as student scholarships for private education by Education Assistance Organizations (EAO’s) that are approved by the state. The program would award up to 75% of the state average maintenance and operations education expenditure per student (from the previous year) to qualifying students. Students from both private and public schools would be eligible. The bill would take effect on January 1, 2024 and limits the total expenditures for the program for that year to $100 million. The Coalition for Public Schools considers this a tax credit voucher bill since there is an overt transference of taxpayer funds to private entities.
House Bill 4340 – (Frank) – Relating to the establishment of the Education Savings Account Program to allow certain children to use public money to pursue educational alternatives to public schools and an insurance premium tax credit for contributions made for purposes of that program.
This bill would create education savings account programs that rely on educational assistance organizations (EAOs) to receive funds, either from the state or from private donations, to provide to individuals of varying eligibility for educational expenses, including private school tuition. The EAOs could take up to 10 percent of the provided funds, which could be provided by donations from companies that could then claim a tax credit against their state taxes to limit their contribution to state general revenue. The ESA Amount would be 90% of average M&O. This is both a tax credit voucher and an ESA type voucher. The Coalition for Public Schools considers this a voucher bill since there is an overt transference of taxpayer funds to private citizens.
House Bill 4807 – (Harrison) – Relating to the establishment of the Texas Parental Empowerment Program and an insurance premium tax credit for contributions made for purposes of that program.
As filed, the bill would create the “Texas Parental Empowerment Program, which would use state funds and insurance premium tax credits to provide vouchers for certain eligible students. The bill would require that the Comptroller transfer an amount equal to average M&O expenditures per ADA in the preceding year into each eligible student’s account. Based on budgeted expenditures reported in 2021-22, this would be around $10,725. The bill also allows certain entities to receive an insurance premium tax credit equal to their contribution to the empowerment program fund or their tax liability. Total credits would be limited to $200 million in FY 2024. The bill provides a formula for total credit limits in subsequent years. The credits cannot be transferred to another taxpayer.
The bill requires that the comptroller transfer applicable amounts from the Foundation School Fund to fund accounts for eligible students who attended public school in the prior year, are entering kindergarten, or are currently participating in the program. The comptroller would rely on general revenue and contributions used to generate insurance premium tax credits to fund accounts for those students who had not previously been attending public schools. The bill allows funds deposited into these accounts to be spent on tuition and fees, textbooks, computers, tutors, therapies, curriculum for home-schooled students, transportation and more. Funds cannot be used to pay certain individuals related to the student or a member of their household.The bill allows unused funds to rollover into the following school year. Students may use previously deposited funds after graduation from high school. The bill requires that private schools provide certain notices to parents of special education students upon application.
The bill requires that the Comptroller certify no more than three educational assistance organizations that would help administer the program by verifying the child’s eligibility and the use of funds in their account. The bill would also establish a parental review committee to preapprove providers eligible to accept payment from students’ program accounts. The Coalition for Public Schools considers this a voucher bill since there is an overt transference of taxpayer funds to private citizens.
Senate Bill 176 (Middleton) – “Relating to the establishment of the Texas Parental Empowerment Program and an insurance premium tax credit for contributions made for purposes of that program.”
This bill proposes the creation of the Texas Parental Empowerment Program and provides a premium tax credit for qualified entities to be administered as student scholarships for private education by Education Assistance Organizations (EAO’s) that are approved by the state. The introduction to the bill emphasizes that private religious schools must be included. The bill requires a parental review committee to approve the providers of educational services or products but prohibits anyone requires to register as a lobbyist or anyone employed by a political subdivision that hires a lobbyist from serving on the committee. The program would award 100% of the state average maintenance and operations education expenditure per student (from the previous year) to qualifying students. The bill would take effect on January 1, 2024 and limits the total expenditures for the program for that year to $200 million. The Coalition for Public Schools considers this a tax credit voucher bill since there is an overt transference of taxpayer funds to private entities.
Regular Session of the 87th Texas Legislature
House Bill 4537 (Middleton) – “Relating to the establishment of the Family Educational Relief Program and an insurance premium tax credit for contributions made for purposes of that program.”
This bill would create the Family Educational Relief Program which would allow parents of eligible private or home-schooled children to receive reimbursements for educational expenses from the state. The money would be distributed by Certified Educational Assistance Organizations which would be required to be non-profit (501(C)3) organizations. The program is funded by allowing entities a credit against the premium tax liability to the state. The total amount of tax credits for the program is capped at $200 million. The Coalition for Public Schools considers this a tax credit voucher bill since there is an overt transference of taxpayer funds to private entities.
Senate Bill 1698 (Paxton) – “Relating to a franchise or insurance premium tax credit for contributions made to certain educational assistance organizations.”
This bill allows for the creation of up to 25 educational assistance organizations (EAO’s) that would provide scholarships for students and their parents to go to private schools. Businesses and other entities would receive a tax credit for donations to the EAO. Students may not receive more than 75% of the state average per pupil expenditure or 50% if the student’s parents are above 175% of the income level to determine free and reduced lunch status. The Coalition for Public Schools considers this bill a “tax credit tuition” voucher because it results in taxpayer funds going directly to a non-profit, private entity.
Senate Bill 1968 (Bettencourt) – “Relating to the establishment of the Family Educational Relief Program and an insurance premium tax credit for contributions made for purposes of that program.”
This is the companion bill to HB 4537 and is identical to it. The bill would create the Family Educational Relief Program which would allow parents of eligible private or home-schooled children to receive reimbursements for educational expenses from the state. The money would be distributed by Certified Educational Assistance Organizations which would be required to be non-profit (501(C)3) organizations. The program is funded by allowing entities a credit against the premium tax liability to the state. The total amount of tax credits for the program is capped at $200 million. The Coalition for Public Schools considers this a tax credit voucher bill since there is an overt transference of taxpayer funds to private entities.
Regular Session of the 86th Texas Legislature
No Tax Credit vouchers were introduced in the regular session of the 86th Texas Legislature.
Special Session of the 85th Texas Legislature
HB 58 by Simmons would provide a credit against an entity’s state premium insurance tax liability. This credit goes to fund non-public school tuition managed by an educational assistance organization and thereby diverts tax monies away from public schools to private schools.
HB 58 Talking Points may be found here.
HB 253 by Simmons would provide a $150 million in additional state aid for tax reduction to qualifying districts under a hardship grant and raise the Existing Debt Allotment for public schools. The bill contains a State Premium Tax Credit for donors and and Educational Expense Assistance voucher that is companion to SB 2. Talking points for HB 253 are identical to those for SB 2.
SB 2 by L. Taylor would provide a few funding concessions to public schools but contains a State Premium Tax Credit for donors and an Educational Expense Assistance voucher for students with a disability. The amount of the voucher may not exceed $10,000 or the full amount of tuition to a private school, whichever is less. The bill would require school districts to notify the parents of eligible students about the availability of the vouchers and inform them that they may be giving up their due process rights under the law by accessing them.
SB 2 Talking Points (CFPS) may be found here.
Regular Session of the 85th Texas Legislature
SB 542 by Bettencourt and its companion HB 1184 by Bohac have been filed in the Texas Legislature.
The bills are similar to the tax credit scholarship bills filed last session but do not apply to the franchise tax. They apply to the insurance premium tax.
You can read the bills at:
SB542
http://www.capitol.state.tx.us/BillLookup/history.aspx?LegSess=85R&Bill=SB542
HB1184
http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=85R&Bill=HB1184
Downloadable HB 1184 Tax Credit Voucher Talking Points
“Tax credit” or “taxpayer savings” type vouchers that are introduced into the 85th Texas Legislature will be listed here. The Coalition for Public Schools would like to point out the following issues with most of these vouchers:
- Texas cannot afford to fund two school systems, one public and private system, when schools are already shortchanged. Despite the partial restoration of the 2011 budget cuts, Texas remains in the bottom quarter of states in per pupil funding and lags far below 2008 pre-recession per-pupil funding levels when adjusted for inflation. When a public school student child uses a tax credit voucher, the public school loses the revenue, but not the cost for teachers, utilities, facilities, etc. Over time, the cost of vouchers could siphon off even more education dollars should unlimited home school virtual schools get into the act. We simply can’t afford to pay for a private education system when we don’t properly fund the one we have.
- No accountability for voucher tax dollars – Under these voucher bills, private schools would not be required to meet state curriculum requirements or maintain the same fiscal accountability as public schools. Texans overwhelmingly believe that schools that receive tax dollars should be accountable for how they are spent, but the schools that receive tax credit vouchers would not be accountable to taxpayers.
- Subsidizes the wealthy at the expense of others that can’t afford it – Tax credit, savings account and reimbursement voucher schemes are inherently designed to be used by those who generate enough income to “need” a tax break. Economically disadvantaged parents would not be able to use a voucher unless they could afford pay the difference between the voucher check and the actual tuition, in addition to the cost of transportation. Other taxpayers would pay the price for vouchers that would primarily benefit those who could afford expensive private schools.
- “Savings” are a cut to education funding – Any “savings” are to the state and are almost entirely at the expense of the local school district that a transferring student leaves. If one or two children leave a classroom, the district’s costs are barely reduced, if at all, and certainly not in proportion to the district’s loss of funds. That lost funding would still be needed to maintain the program, causing local taxpayers to have to pick up the cost, or the local district to reduce needed programs.
- Students with disabilities give up their rights – Under these bills, “students with a disability attending an eligible nonpublic school may not receive the services a student with a disability attending a public school is entitled to receive under federal and state law”. This results in a loss of federal and state protections for these students that have been put in place to ensure that they receive a quality education.
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For more information contact Dr. Charles Luke at charlesluke43@gmail.com or by phone at 940-768-8594.