Scholarship Tax Credits Debate Touches A Nerve

Mar 5, 2019

School choice — and how far the state should go to promote it — are at the center of a testy debate in Frankfort.

Rep. Bam Carney (R-Campbellsville) talks with reporters following committee discussion of House Bill 205 on March 5, 2019.
Credit Josh James / WUKY

Advocates and opponents of House Bill 205 arrived color-coded Tuesday with school choice supporters in yellow scarves and public education representatives wearing their trademark "red for ed." Donning yellow was Kesia Hatcher, a Louisville mom of four who worked two jobs as a single parent to pay for alternative education for her children.

"And these kids are thriving," she told WUKY. "Without school choice, we wouldn't have had that opportunity because (with) their learning differences I had to put them in a school that catered to their needs. And with those schools, I was able to get them to propel forward to be productive citizens."

Under HB 205, Kesia and other parents like her might would have a better shot at scholarship money for their kids thanks to up to $25 million in state tax breaks for those who donate. And that amount could swell in the coming years, if donors can be found and demand warrants. Should it pass, Kentucky would join 18 other states with similar tax credits.

As for the cost, bill sponsor Rep. Bam Carney said the state budget director is finalizing an analysis that shows that the tax credit "will begin to save some money" by the fifth year.

But school superintendents testified their costs will likely remain fixed, even if an estimated 1-1.5 percent of their students make the switch to private school.

"We would see no reduction in teachers needed... bus routes needed... utility costs," Matt Thompson Montgomery County Schools said. "The result of that is that local funding would have to pick up the reduction that we would see in SEEK funding."

SEEK funding refers to a formula-driven allocation of state-provided funds to local school districts.

Kentucky Education Association President Stephanie Winkler said she supports parents making the right choices for their children, but fears the tax credits will siphon off funds that could otherwise go toward textbooks, transportation, school safety, and other public school needs.

"Money is not going to always be the answer," she said. "But we cannot take away from the precious state revenue dollars that we currently bring in way less than what we give away."

Tuesday's committee discussion of HB 205 showcased what a flashpoint the issue has become, with Lexington Democrat Kelly Flood finding herself at odds with the chair.

"Effectively you're asking the state to become your next major donor," she told supporters, "to raise approximately $25 million dollars to reimburse donors who have a crisis of faith in contributing... to private institutions that are funding schools that are religious that have been in the headlines for two decades now with chronic, systemic child abuse."

"You're out of order. We're done," chairman Steven Rudy said, cutting the lawmaker off after a brief back-and-forth.

In his testimony, Carney alluded to "bullying" and "intimidation" of members and their families over the issue, promising documents to back up the allegations.

"This has got to stop. We're all in this for our children," the Campbellsville Republican urged, as an audience member suggested superintendents were also intimidated.

It's a fight that's once again mobilized teachers in the waning days of a legislative session.

In 2018, educators and state workers rallied by the thousands at the Capitol as lawmakers pushed through eleventh-hour structural changes to the pension system. The reforms were ultimately struck down on proceedural grounds. This year, the KEA and their allies are training their fire on the scholarship tax credits and House Bill 525, reorganizing the board overseeing teacher pensions.

For now, not all members of Carney's caucus are on the same page on the tax credits and he acknowledges meeting the 60-vote threshold in a non-budget year remains a heavy lift.

"It'll be difficult to get to that mark. That's kind of one reason why we had discussion only," the lawmaker told reporters. "We felt like we probably had the votes to get it out of here, but the issue obviously has a lot of attention."

Just six working days remain in the 2019 session, but the language could resurface in other bills.