February 2018 Church & State - February 2018

Congress Uses Tax Bill To Expand Tax Credit For Private School Tuition

  Liz Hayes

The final version of the Tax Cuts and Jobs Act may have spared the Johnson Amendment, but it includes language that expands a private school voucher-like program.

Congress modified the tax code to expand 529 college savings plans to allow families to get tax breaks if they set aside money to pay for K-12 private school tuition. Starting Jan. 1, families could begin setting aside up to $10,000 tax-free every year for private school or college tuition.

AU and other organizations that advocate for public education denounced the change.

“These voucher-like plans undermine public schools by redirecting desperately needed resources to private schools,” said Maggie Garrett, AU’s legislative director. “The plans benefit the wealthiest families who can already afford to send their children to private, mostly religious schools. Families have the right to choose a private education for their children, but that choice shouldn’t come at the cost of de­funding the public education system relied on by 90 percent of American school children.”

Advocates for parochial schools lauded the change. James Cultrara, the co-chairman of the New York State Coalition for Independent and Religious Schools and director for education at the New York State Catho­lic Conference, told Education Week’s blog it was a “great achievement”: “I think it’s the most important step that’s been taken on a national level in probably the last 20 years.”

However, some cautioned that families which choose to use the savings plans for elementary- and secondary-school tuition may not reap the intended benefits of the plans, since they were designed for long-range, interest-earning savings to fund far-off college expenses.

And state funding for public education could particularly be impacted. Writing in The New York Times, Nat Malkus, deputy director of education policy at the conservative think tank American Enterprise Institute, noted that many states also offer tax breaks to those using 529 college savings plans. A large new pool of taxpayers qualifying for these incentives could drain more tax dollars away from public schools.

“With this law, the Republican Congress would be nullifying the intent of state legislatures by creating tax breaks for private school parents that are paid for by reducing state tax bases that pay, in part, for public schools. States did not choose to create tax-free private school tuitions, Congress did,” Mal­kus wrote.

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