A controversial bill that would establish education savings accounts to be used at parents' discretion to fund private school and other education costs passed in a 22-5 vote in the Arkansas Senate Tuesday.
Senate Bill 746 and its predecessor, House Bill 1222, have a long list of opponents. The legislation was initially opposed by Governor Hutchinson because of its potential cost, but he later said he supported it after HB 1222 was amended to cap the growth of the program. HB 1222 failed in the House last Thursday after passionate testimony from representatives who said the bill would negatively impact public school districts they represent. That same day, SB 746 was amended to mirror the failed legislation.
Under SB 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.
After the House version of the bill failed to pass, the Senate version was amended to address lawmakers' concerns. The amended bill would require that schools comply with federal anti-discrimination legislation. It also specifies that no more than 1 percent of students in a single public school district could receive an education savings account per academic year and that the funds could not be saved to pay for college expenses once a student graduates from high school.
“Not every child fits within the box of public education, but public education has to serve every child,” Sen. Blake Johnson, (R-Corning), lead sponsor of SB 746, said. “This program will not destroy our responsibility to the children of Arkansas, it will just give opportunity to children who don't fit in the box.”
Critics of the bill say the education savings accounts are a voucher program. School vouchers use state money to fund scholarships that pay for students to attend private school.
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.
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.
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 and examination fees, among other things.
Speaking against the bill, Sen. Joyce Elliott (D-Little Rock) said, “What’s bad about this whole thing is we don’t have a plan for education in our state. We’re just doing this and doing that, and we’re just doing most of it in the name of choice.
“What I’m really speaking against is the way I see us watering down our future. … The more we water it down, we guarantee everybody rather mediocre schools.”
Speaking for the bill, Sen. Jim Hendren (R-Gravette) said he was “somewhat reluctant initially” but became a co-sponsor of the bill after it was amended.
“We strive for a world class public education system, but the fact is sometimes we also have an obligation to stop and step back and say, ‘Does it work for everybody?’ and ‘Can it do better?’ ”
Hendren said the bill could make “it much better for a few kids,” and that in general, “competition makes you better.”
“This bill is an opportunity to encourage all of our students, our charter schools, our private schools, our home schools and our public schools to strive for excellence,” he said.
The bill now goes to the House.
This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans.