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Lawmakers hear bill to expand tax credit limits for private schools

Lawmakers hear bill to expand tax credit limits for private schools

Private school scholarship donors could getup to $200,000 in Montana tax credits under a proposed legislative bill.

Donations to approved scholarship organizations for private schools, including religious schools, or "innovative education programs" in public schools would be eligible for the credit, according to testimony on the bill discussed on Wednesday.

House Bill 279 increases the private school scholarship tax credit from a maximum of $150 to $200,000 in money that would otherwise go to the state. It would also remove accountability requirements for schools, including the administration of a nationally recognized standardized assessment and the requirement to make those scores available to students' parents.

The bill, carried by Republican Rep. Seth Berglee of Joliet, comes after a 5-4 decision by the U.S. Supreme Court in June that ruled the state of Montana cannot exclude religious schools from receiving tax credit-funded scholarships.

The Montana Legislature approved a school tax credit program in 2015 and former Democratic Gov. Steve Bullock signed it into law. The program allows individuals or corporations to receive a tax credit from the state in exchange for donating to a scholarship organization which assists with tuition to a private school.

Proponents of HB 279 told the House Education Committee it will help expand school choice and access to private schools. Opponents said it will siphon money from public schools to programs that would not have to adhere to accountability requirements if the bill becomes law.

The state's top public education official, Superintendent of Public Instruction Elsie Arntzen, supported the bill. Arntzen said she backed the proposal because there was an "allowability for public schools to also embrace this."

"I do believe this is an opportunity for families as well," she said.

A fiscal note attached to the bill shows that about $23,000 in tax credits per year have been claimed by taxpayers that were then donated to the Student Scholarship Organization and the Innovative Education Program. 

The fiscal note states that if the new bill is passed, it is expected that the $3 million cap in tax credits will be paid to the Student Scholarship Organizations alone. The cap would increase by 20% each year. The fiscal note further predicts that the bill would credit taxpayers about $24 million over the next four years.

Berglee said there is not a dedicated revenue funding stream that would replace money directed toward scholarship programs.

When asked why the bill would remove accountability measures such as standardized testing, Berglee said he was thinking of COVID-19 pods and "the kind of movements that we've seen to try and get kids into education."

Those pods aren't equipped to "go find some accredited assessment test criterion," Berglee said.

Montana Family Foundation President Jeff Laszloffy called the bill "a private-sector solution to a public-sector problem," saying private schools helped lower the dropout rate of Montana's students since the tax credit bill was introduced in the 2009 session. The bill did not pass and become law until 2015.

Dennis Parman, executive director of the Montana Rural Education Association, said that during his time at the Office of Public Instruction under former Democratic Superintendent Denise Juneau, the dropout rate decreased as the result of the office's Graduation Matters initiative and many other initiatives, but did not specify that the tax credit program was one of those initiatives.

Dianne Burke, executive director of the Montana Quality Education Coalition, said although the Supreme Court ruled over the summer that it was unconstitutional to withhold funding from religious schools, Article 10, Section 1 of the Montana Constitution also states that the Legislature is required to adequately and equitably fund a quality system of public elementary and secondary schools.

"I want to caution the committee that care really must be taken to maintain funding for these constitutionally mandated programs, particularly K-12 public education," Burke said. "MQEC believes that the state cannot allow new optional programs to siphon funds away from Montana's basic system of free quality public schools."

The committee did not take immediate action on the bill.

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