House passes private school tuition tax credits but keeps it from governor

Oklahoma moved a step closer to state support of private schools on Tuesday with the House of Representatives’ conditional approval of the Senate’s version of tuition income tax credits.

The refundable credits in House Bill 1934 would be worth as much as $7,500 per student, depending on household income, with the total amount available capped at $150 million in the first year and rising to $250 million in the third year.

But Tuesday’s vote was only a teaser. Speaker Charles McCall, R-Atoka, put what amounts to a procedural hold on the bill so that it cannot go to Gov. Kevin Stitt until McCall gets what he wants from the Senate.

That didn’t sound likely Tuesday evening. The House’s machinations, said Senate President Pro Tem Greg Treat, R-Oklahoma City, were “beyond disappointing” and McCall’s conditions a “non-starter” with Senate Republicans.

Instead, Treat called for an open meeting of McCall, Stitt, state Superintendent Ryan Walters and himself to settle matters.

“Let the public see what we continue to argue about,” Treat said.

After the vote, in a written statement, McCall said, “As I have said repeatedly over the past year, we are committed to making sure any education plan that is passed doesn’t hurt our public schools. Today, the House passed the Senate’s tax credit plan, but I am holding the bill from going to the governor’s desk until we get agreement on a public education funding plan.”

Specifically, McCall is demanding a separate Oklahoma Student Fund — $300 million in its most recent iteration — distributed in such a way that small districts receive a disproportionate share. The argument is that small and therefore mostly rural districts should get more because those living in them are less likely to benefit from private school tax credits.

Another, related issue is that anything directing tax dollars to private schools has in the past hit a dead end in the House because of the large number of rural and suburban Republican representatives.

“We are open to more money through the formula, increased funding to urban and suburban schools, higher teacher pay raises and other Senate priorities, but we are adamant that we must provide needed support to rural schools,” McCall said.

Because of that, the House on Tuesday rejected Senate amendments to HB 2672 — like HB 1934, essentially a Senate bill despite the “House Bill” designation. It includes a substantial pay raise (as did a House proposal rejected by the Senate) and a big boost to the state funding formula, which distributes money by enrollment and certain factors such as poverty, special needs and local tax base.

“The unprecedented move to hold the school choice legislation hostage until the Senate agrees to pass the constitutionally questionable Oklahoma Student Fund and other pet projects is also a non-starter for the Senate Republican caucus,” Treat said in his written statement. “The plan we sent them treats every student the same no matter what their zip code is.

“Their plan with the Oklahoma Student Fund is to disproportionately give kids in certain areas (for instance, Atoka Public Schools) more money than all others,” Treat said. “Their plan is a ridiculous and shameful notion that segregates children. The Senate is simply saying — treat every kid the same.”

HB 1934 passed the House 61-31, with 13 Republicans joining 18 of the 19 Democrats present in opposition.

But earlier in the day, the House had voted along party lines to suspend its rules to allow any vote on HB 1934 to be reconsidered at any time until the end of the 59th Legislature — more than a year away, at the end of May 2024. Then, following Tuesday’s vote on the bill, McCall “captured” it, meaning he reserved the right to bring the measure back to the floor.

Normally, that has to be done within three days, but that was the rule the House Republicans suspended. It is unusual for the vote to be captured after a bill passes; usually, it’s a way to give a bill that’s failed a second life.

HB 1934 originally dealt with public posting of school curricula, but the Senate subbed out that language for its tax credit proposal. That proposal is for refundable income tax credits of from $5,000 to $7,500 per private school student, depending on household income, and $1,000 for home schooled students.

A refundable tax credit is one that can result in a refund to the tax filer if the credit is greater than taxes owed.

The bill does not include any sort of restrictions or reporting requirements for schools, except that they be accredited by the state board of education or “another accrediting association.”

That is one of the objections raised by opponents of most initiatives to make public funds available for private school students. The schools benefitting directly or indirectly generally do not have to meet the same admissions and accountability requirements as public schools.

Jon Echols, Majority Floor Leader, and some Democrats squabbled over whether the tax credits amount to vouchers, since the direct benefit will be to families and not the schools, but the bottom line is that up to $150 million the first year will be deducted from state income tax liabilities to pay for private school tuition and related costs.

How much the schools themselves benefit will depend on the extent to which their enrollments increase as a result of the tax credits. Some think that will be very little, while others — including Stitt — envision it fueling a private school explosion in both urban and rural areas of the state.

Others predict private schools will simply raise their tuition to something approaching the amount of the tax credits.

State support of private schools has been a priority for Stitt and Treat in recent years, and this week Stitt signed a bill that some believe is a prelude to funding of religious charter schools, which in Oklahoma are part of the public school system.