A bill that would establish education savings accounts to be used at parents' discretion to fund private school and other education costs failed to pass in a 35-45 vote in the House Thursday.
A Senate bill sponsored by Sen. Bart Hester (R-Cave Springs) was amended Thursday to replicate the failed House bill.
Under House Bill 1222 and Senate Bill 746, individuals and corporations who contribute to the education savings accounts, to be managed by nonprofit organizations, would receive an income tax credit equal to 65 percent of their donation. The donation would also qualify for a federal income tax deduction. Parents could use the dollars in the savings accounts for private school fees or home school education. The tax credits, capped at $3 million, would be awarded in the second and subsequent years of the program. The program would sunset after four years.
"This bill is about customizing an education opportunity for an individual student," Rep. Jim Dotson (R-Bentonville), lead sponsor of HB 1222, said.
Opponents of the bill who spoke on the House floor said not all parents would be allowed such an opportunity.
"Not every corner of Arkansas is the same," Rep. James Sturch (R-Batesville) said. "The same opportunities that exist in Northwest Arkansas do not exist in Northeast Arkansas."
Because there are not many private schools in Sturch's district, he said "many parents will not be able to take advantage of the opportunities promised in this bill simply based on where they live."
Parents could use the money in the education savings account to pay for tuition at a private school as well as for other education expenses, including uniforms, books, tutoring services, transportation, examination fees and even college, since a portion of the unused money in a savings account would carry over to the next year.
Rep. Les Warren (R-Hot Springs) echoed Struch's concerns.
"I consider this bill to be a discriminatory bill. Public and charter school kids are not eligible for these savings accounts to fund college."
Warren added, "I also see this bill as promoting a breakdown of our public schools."
If education savings accounts were established, money would be directed to unaccountable schools and there would be less funding for the public school system, Warren said.
In Arkansas, the largest portion of the cost of a public school student’s education is covered by what is called “foundation funding” — a mixture of state general revenue and local property taxes that the state collects and then remits to local school districts. The legislature has established foundation funding at $6,646 per student for the current school year. When a student leaves a public school for a private school, the foundation funding does not follow the student. The student’s former public school district does not receive foundation funding for that student the next year.
HB 1222 and SB 746 would not directly divert public education funding to private schools as some voucher programs in other states have done. Instead, dollars that would have otherwise entered state general revenue in the form of income tax would be diverted to the nonprofits administering the education savings accounts. Those nonprofits would then be able to transfer an amount of money equivalent to foundation funding for each academic year into an eligible student’s account.
Sturch also expressed concern about the bill's impact on public school districts. "Losing students has never meant increase funding for school districts. Schools still have to maintain their facilities. They still have to pay there utility bills. And they still have to try to find the same quality of education they have been with the same or less amount of money each year."
Speaking for the bill, Rep. Stephen Meeks (R-Greenbrier) cautioned lawmakers to not allow fear to sway their vote.
"All of us have gotten emails from people all across the state, and the No. 1 thing that is typically been in all the emails that I've got is fear. The fear of what might happen if we do this. I've gotten emails about how this is going to be disastrous for the public school system. How it's going to reduce funding. How -- fill in the blank.
"Do not let fear of what might happen stop the good that will come from allowing this to take place," he said.
Rep. Bob Ballinger (R-Berryville) said public schools are the backbone of the community.
"This is not going to hurt public schools! We argue for competition all the time, and so now all we are talking about is empowering the parents to help kids.
"I mean the sky is not falling every time something changes," Ballinger said.
Dotson said he has not decided whether he will seek reconsideration of HB 1222 on the House floor this legislative session. SB 746 may be heard in the Senate Education Committee next week.