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Against LB 753 — Curt Friesen

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LB 753 is a legislative bill offering tax credits for donations to scholarship funds for private and faith-based schools. It passed its first round of debate last week, overcoming a three-day filibuster before advancing in a 31-12 vote. Here is an editorial written by former State Senator from rural Henderson Curt Friesen voicing his reasons for opposing this bill. 


HENDERSON — LB 753, a bill to send $25 million to private schools through the guise of excessive tax credits for donations to scholarship-granting organizations, will do next to nothing for rural Nebraska and our kids.

Over the eight years, I was in the Legislature and on the Revenue Committee, I worked hard to ensure rural Nebraska had a strong voice to protect the interests of property owners while still ensuring our students could access a great education. That’s why I’m opposed to LB 753.

It would cost the state $25 million a year in tax revenues — and over $100 million a year in the not-so-distant future – in order to support more students in private schools; however, only around 3,000 students – or 10% of all Nebraska students attending private schools — live in rural areas. That’s just about 3% of all rural students statewide. The bill also gives first priority to students already receiving scholarships and their siblings, which means that even if new private schools opened in rural areas, the priority would still go to those primarily urban students already receiving a scholarship. Rural students will, once again, be down the line in the state’s funding priority.

They also will be low priority regarding funding per student. A recent proposal would require the state to send public schools $1,500 per student. Under LB 753, however, the maximum scholarship amount is set at 75% of what it costs public schools, on average, to teach each student. For 2023, that amount is over $12,000, which means each eligible student under the bill could receive around $9,000 to attend private school. It seems generally unfair that private school students are worth six times more to the state than rural public school students.

This difference won’t be offset by the savings rural schools may see by sending more kids to private schools because even if a couple of students leave, the school still must turn on the lights, heat the buildings, and bus kids. That means their cost per student will increase and since the scholarships are calculated using that number, the scholarships will also increase. So as rural schools spend more per student, so will the state on private school students.

So if rural kids won’t benefit, maybe our taxpayers will? Unlikely, as there’s no cap on how much a single taxpayer — be it an individual filer or a corporation — can claim, so long as it isn’t more than half their total tax liability. A multinational corporation that owes more than $50 million in state income taxes could therefore make a donation on Jan. 1 and claim the entire $25 million credit, leaving nothing for other donors. In other states, that has been the case, with the full allocation of credits being claimed the first day they become available, leaving nothing for ordinary donors.

It’s also not as though people aren’t getting a benefit for these deductions already. Anyone who makes a $10,000 donation to a scholarship granting organization now can claim a deduction of up to $664 on their taxes, the same as if they donated to a public school foundation, their church, or cancer research. Under this bill, however, that same $10,000 donation to a scholarship-granting organization balloon from a $664 deduction to a potential $10,000 credit — effectively funneling tax dollars to a charity in a way we don’t do with any other charities.

Why do scholarship-granting organizations warrant this type of treatment? Because the state wouldn’t be allowed to give them the money directly under our constitution, which expressly forbids sending public dollars to private education. LB 753 is a sneaky workaround to that provision. If we really think private schools need public dollars, then we should work to change the constitution, not implement mechanisms that sidestep its provisions to favor pet causes. And if it is already constitutional, then do it the right way, through an appropriation.

The constitution instead calls for the Legislature to provide for the free instruction of all students. That means all students must have access to free education through our public schools and if there’s a problem with those schools, it’s on the Legislature to fix it.

CURT FRIESEN

Former state senator