A Republican-dominated Oklahoma House of Representatives, which last year refused to even consider private school vouchers, warmly embraced an open-ended tax credit program to reimburse families for private and home-school expenses on Wednesday while also voting to boost public education funding by $500 million.
The two-bill package by Speaker Charles McCall, R-Atoka, was sold as an “everybody wins” alternative to vouchers that boosts public school funds instead of diverting them.
Republicans vehemently protested Democrat insistence that the tax credits in House Bill 1935 are vouchers by another name and that the distribution of the public education money in HB 2775 unfairly favors the smaller, rural school districts that have in the past opposed private school subsidies of any kind.
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Five Republicans joined the Democrats in opposing the tax credit proposal; only two voted against HB 2775.
“What we are seeing today is a plan that will … support a parent’s right to choose,” Rep. Rhonda Baker, R-Yukon, said during the four hours of discussion and debate on the two measures. “We’re going to provide … for more historic funding. And, we’re to be protected … from potential fraud and abuse by cutting the bureaucracy that adds to the cost for the taxpayer.”
Democrats raised alarms on two principle points: the allocation of $300 million included HB 2775 and an admitted lack of detail on exactly how taxpayers would be protected from potential fraud arising from HB 1935’s tax credits.
Rep. Monroe Nichols, D-Tulsa, said House leadership “squandered” an opportunity to do something “truly historic” because it refused to listen to superintendents and school board members.
“It is simple,” he said. “You engage the folks who are closest to it. You engage the folks who you are asking to produce better outcomes for kids. You ask them what they need, because you have (the money) now, and you give it to them and you hold them accountable. You don’t give it away to places you can’t hold accountable.”
HB 1935 would create refundable tax credits of up to $5,000 per private school student per year or $2,500 for those “educated by other means” — a reference to home schooling. Besides tuition and fees, eligible expenses would include academic tutoring, learning materials and college admission tests.
The bill would not limit the overall amount that could be claimed in a year, but Baker indicated that the Republican caucus thinks it would be about $300 million.
Almost all of that, she said, is expected to go to families whose children are already in private schools or being otherwise educated outside the public school system. According to a tax commission report, that will cost state taxpayers more than $270 million.
“From the research we’ve done on other states that have done this, we’ve seen about a 2% movement” from public to private schools, Baker said. “I don’t see this as an incentive to pull from public and put them into private.”
The credit would be administered by the Oklahoma Tax Commission and the Oklahoma Department of Education, which between them would be supposed to spot students who are enrolled in private school just long enough to submit a tax credit claim before switching to public school.
Baker acknowledged that administrative details have not been worked out but said the Tax Commission already oversees dozens of tax credit programs.
Rep. Meloyde Blancett, D-Tulsa, did not find that reassuring.
“There is not the infrastructure on the back end to do this well,” she said. “If you vote green (yes) on this bill, you better, by God, better be getting back over there and making sure that there is a damn good plan so that the Tax Commission has the resources they need to do this. Because I will tell you this: … They do not have the auditing staff to accomplish this well.”
The other bill, HB 2775, would provide for three categories of public school funding: $300 million to be distributed among all of the state’s school districts, $150 million for across-the-board teacher raises, and $50 million for districts with low ad valorem tax bases.
Almost all of the resistance to this bill was from Oklahoma City- and Tulsa-area representatives who objected to the $300 million not being added to the state school funding formula, which is intended to equalize state aid based on a variety of factors.
HB 2775 would provide for per-pupil distribution but with a $2 million per district cap. The result is that large districts would receive considerably less per student than smaller districts. The handful of districts whose local funding is such that they receive no state aid, all of which are in rural areas, would be included in the distributions.
The two bills face an uncertain future in the Senate, which has its own ideas about school funding.
Video: Would tax credits encourage parents to disenroll children from public schools?