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March09

No resolution on bill promoting public funding be used for private school scholarships

Resolution on a bill that would divert public funding towards non-public school scholarships remains unclear.

 

Senate Bill 189, which would provide a tax credit to insurance companies contributing money to an organization that provides funding to cover the cost of a student enrolling in a private school and for instructional supply grants for teachers, including home school providers, failed to gain a majority of votes on the House floor to be placed on the chamber’s debate calendar on Friday, but a motion to reconsider was made and the bill is expected to be voted on again on Monday (3/9).

 

SB 189 reached the House floor only after the House Taxation committee voted 8-7 to send it on without a recommendation. A do pass motion on the bill failed on a 7-8 vote by the committee.

 

The bill would establish the program, which could use up to $4 million from the general fund in its first year and, with a 25 percent inflationary growth clause attached, could grow to utilize over $130 million in state dollars to fund private institutions.

 

ASBSD opposes the bill.

 

“If you vote for (Senate Bill) 189, the message your sending is: private school needs are greater than public school needs,” ASBSD Executive Director Wade Pogany said. “Do we spend public dollars for public purposes or for private purposes?”

 

SB 189 would build the tax credit program into the state budget meaning it would be a determined cost each year and thus not up for adjustment by state government or legislative appropriators. The tax credits would be distributed through the Department of Revenue and the S.D. Christian School Association is taking steps to be the distributor of the scholarship and supply grant program.

 

Pogany also noted the state constitution prohibits the use of state dollars to fund a credit program for secular schools

 

“The precedent (set) with (Senate Bill) 189 is dangerous,” Pogany said.

 

Proponents of the bill argued it would put money in the hands of public school teachers through the $250 instructional grant, but did not mention the grants would be awarded through an application process open to private and home school teachers, as well.

 

It was also stated by proponents the bill would eventually save tax payers money; because the program would open the door for more students to enroll in private school, public schools would have lower enrollments, meaning fewer dollars needed for state aid and a tax break for local taxpayers funding the state aid formula.

 

Jim Terwilliger of the South Dakota Bureau of Finance and Management disagreed with the assertion it would save tax payers money in the long run, saying the insurance company tax is one of the largest sources of revenue for the state’s general fund and the 25 inflationary clause would result in “quite a loss.”

 

“I just don’t see how it could be a net tax savings to tax payers,” Terwilliger said.

 

SB 189 awaits its reconsideration vote on Monday.

 

For updates on the bill, check the ASBSD Blog, Bill Tracker page and Twitter feed.

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