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February26

SB 159: Private school scholarship bill sent through Senate

Two weeks after it came out of committee, a bill providing funding for private school scholarships found its way out of the Senate.

 

Senate Bill 159, which uses tax credits from the insurance company premium and annuity tax to fund private school scholarships, passed the Senate on a vote of 24-11.

 

SB 159 would provide $2 million in scholarship dollars for students, who meet set income standards, to attend private schools through donations from insurance companies, who can then collect a tax credit up to 80 percent. Funding for the scholarships would be distributed by one or more independent organizations.

 

ASBSD opposes the bill on the grounds it may go against the state’s constitution, which states no state appropriation of land, money, property or credit may be used to fund non-public, sectarian education.

 

SB 159 sponsor Sen. Phyllis Heineman claimed a third-party organization interpreted the credit as being constitutional.

 

When asked if scholarship payments could be made directly to the private school the student would be attending, similar to how higher education scholarships funded by state dollars are appropriated, Sen. Heineman said funding could only be appropriated to the family receiving the scholarship.

 

SB 159 would also set the average scholarship amount to be equal to 82.5 percent the cost of a student attending a public school in order to have “fiscal neutrality” for the state, Sen. Heineman said.

 

That model, however, is based on the current funding formula’s per-student allocation, which based on Gov. Dennis Daugaard’s funding formula adjustment – introduced through Senate Bill 131 – proposal would no longer be applicable. SB 131 is awaiting review and vote by the House.

 

During SB 159’s committee hearing, Sen. Heineman suggested the program may have to use a “per-student equivalent” and noted the fiscal neutrality could “unravel a little bit.”

 

“I still have some questions about this bill,” Sen. Scott Parsley said. “I think there are some things we need to figure out here.”

 

SB 159 now moves to the House for review. For updates on the bill, check out the ASBSD Blog, Twitter feed and Bill Tracker page.

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