Scholarship Tax Credits / Vouchers
This week the bill that was “hot” was a bill to direct money destined for the state of Kentucky to private schools known as House Bill 205. A Courier-Journal article can be found here and a wikipedia article on school tax credits can be found here. According to the National Conference of State Legislators, 17 states have scholarship tax credits.
By way of background, section 183 of the Kentucky Constitution requires the General Assembly “to provide for an efficient system of common schools.” Section 189 of the Kentucky Constitution provides that “[n]o portion of any fund or tax now existing, or that may hereafter be raised or levied for educational purposes shall be appropriated to, or used by, or in aid of any church, sectarian or denominational school.”
House Bill 205 defines a number of terms. A “qualified scholarship-granting” organization means a 501(c)(3) organization that is providing financial assistance to (1) low-income and middle-income families, (2) children in foster care and (3) special needs students. The proposed bill allows for people to pay less in taxes and thus reduces Kentucky’s gross revenues. “Pass-through” entities may also receive the credit as well.
Low and middle income families are families where the household income is 200$ of the federal eligibility guidelines as determined by the United States Department of Agriculture, Food and Child Nutrition programs. The law sets a credit cap of $25,000,000, but it can grow by up to 25% each year that the law is in effect. Thus it looks like the credit cap could potentially double up to $50,000,000 over the term of the legislation 2019 to 2024. A taxpayer that makes a gift to a scholarship-granting organization could receive a credit on Kentucky taxes of up to 95% of total contributions, or $1,000,000. There’s also a five-year carry forward of the credit. Tax credits are only awarded on a “first-come, first-served” basis and the time-stamp on the application will be the determinative factor.
The legislation inspires a number of questions: What happens if 25 people give a million dollars each? What about people who might give just $500 or $1,000? Would they get a tax credit if the ceiling is already exhausted? How does the gift impact enrollments in public schools? Wouldn’t this work to the detriment of rural communities who have fewer private schools? How do we justify allocating money to private schools when our public schools continue to fall behind? Won’t the creation of tax credits further erode the efficiency of Kentucky’s tax structure? So far, I’ve not been satisfied with any of the answers.
Jim Glenn Finally Seated
I sat in on the Jim Glenn hearing today in Frankfort. In especially good news, Rep. Jim Glenn of Owensboro will be able to serve his complete term following his opponent’s decision to drop an election contest. As you may recall, Rep. Glenn won his seat by a single vote last November and was certified both locally and statewide by election officials.
The election contest was formally brought before the House last month in large part because of more than a dozen absentee ballots that were rejected in November because they did not meet statewide standards. A recount a little more than a week ago showed Rep. Glenn did indeed win the race, but after some of the ballots that had been rejected were accepted, the outcome was a tie. Friday’s decision fortunately ends this issue, but there is broad agreement that changes need to be made so that future close legislative elections can be resolved in a fairer and quicker way without dominating the General Assembly’s time. Jim and I sit together on the floor and I’m glad to have his company.
Co-sponsored Medical Marijuana Bill
In the last campaign, I made very few promises. However, one promise I made was to support the passage of a medical marijuana bill. There were many Henderson people that are and continue to work hard for medical marijuana to be available for patients. Grace Henderson comes immediately to mind as does the Henderson City Commission who passed the resolution unanimously in support of it. One official who did some heavy lifting on this and was fearless in her leadership was Alison Lundergan Grimes, our current Secretary of State and new mother. It’s not law yet, but it’s looking like it may pass out of the house.
Governor Bevin’s State of the State Address
I’ve seen Governor Bevin speak twice in real time. The first was at the Kentucky Chamber of Commerce Dinner where for the first 10 to 12 min he was funny, edgy and likable. The rest of the speech became a bit of a ramble where the more he spoke about school pensions, the more disjointed he became. The State of the State was none of that. It was organized, disciplined, and centered on unity. Obviously, I disagree with most of his priorities, but it was a solid performance. He concluded right at the 60 minute mark. The two performances couldn’t have been more different.
Though politicians receive an incredible amount of criticism and accusations of self interest, my experience thus far has been positive. Many, if not all, are incredibly dynamic, well-informed and caring about our state and their constituents. We’ll continue to have differences of opinion, but there will also be occasions of compromise and bipartisanship. (Be watching for the school safety bill). I’m so grateful for all the help I’ve received from the LRC staff and the guidance of my colleagues in juggling the workload. The session is still young and there’s plenty more to go!