HELENA – The state Senate on Thursday advanced one of the session’s major school choice bills, which creates a new state income tax credit for donating to “scholarship organizations” that help students attending private schools.
On a mostly party-line vote with Republicans in favor, the Senate endorsed Senate Bill 81 on a 28-22 vote. All Democrats voted against the measure and Sen. Chas Vincent of Libby was the only Republican against it.
The bill advances to the House if a final Senate vote today approves the measure.
SB81, sponsored by Sen. Dave Lewis, R-Helena, allows individuals to reduce as much as half of their state income taxes by an amount equal to 40 percent of their donation to a scholarship organization. Corporations’ tax credit would be 20 percent of any donation.
The aggregate total of the tax credits is limited to $2.5 million a year.
Lewis said the scholarship organizations are set up to provide scholarships to children attending private schools, to help low- and middle-income families.
“Not every kid fits into the public school system,” he said. “The public school system is wonderful, but it doesn’t work for every child.”
Parents would choose the private school for their child and apply to the organization for a scholarship, Lewis said.
SB81 is one of five school choice bills still alive at the Legislature, all of which would use income tax credits or public funds to assist families choosing to send children to a private school or educator.
Most Republicans are supporting the measures, while minority Democrats have been voting in a bloc against them.
State revenue officials estimated that SB81’s tax credits would cost the state about $6.5 million the next two years. Lewis said he thinks that amount is overstated, because it lowballs the number of students who would leave public school to attend private school.
The state saves money if it funds fewer students in public school.
Sen. Tom Facey, D-Missoula, who opposed the bill, said it uses state money to fund scholarships to schools that don’t have to have certified teachers or report to the state in any way.
“Where is the accountability?” he said. “There isn’t any. We know that Montana (public) schools are in the top five for science. … We’re not going to know anything about this.”
Democratic Sen. Dick Barrett of Missoula also said that Montana’s income tax system already has far too many tax credits, and SB81 adds yet another expensive credit that will benefit few people.
“It’s taking us in exactly the wrong way we want to go if we want to broaden the tax base, lower rates and simplify our tax system,” he said.