McKinney Sen. Ken Paxton's Tax-Credit Voucher Bill a Sneaky Way to Route Public Money to Private Religious Schools

Categories: Legislature

paxton.gif
State Senator Ken Paxton
The idea behind McKinney Senator Ken Paxton's proposed legislation really is pretty ingenious. The whole school-choice voucher idea -- essentially a guise to funnel public money to religious schools -- invariably runs afoul of constitutional challenges. So, lately, that movement has shifted its strategy quite successfully by avoiding public coffers altogether. Some experts call it the "neo-voucher."

At least eight state legislatures have passed bills allowing folks to donate to "nonprofit organizations" that set up scholarships in exchange for a tax-credit voucher. That way, tax revenue destined for the treasury instead winds up with nonprofits who disburse the money as they see fit. Nobody has successfully challenged their constitutionality in court so far. The idea, ostensibly, is to pluck students out of failing public schools and place them in private ones they couldn't otherwise afford.

It's the kind of free-market solution that's found sturdy support from the American Legislative Exchange Council, the conclave of business interests and legislators from which spring draft legislation like shoot-first-ask-questions-later "Stand Your Ground" laws. Historically, though, it hasn't always worked out to the benefit of the students who could use a hand up the most. According to a New York Times investigation last year, the money has gone to kids already enrolled in private schools. It's gone to religious schools teaching its students that the Antichrist will eventually control the world. In some instances, the donors' cash was eventually funneled back to their own kids.

At a recent Texas Tribune conference, even Governor Rick Perry's own former education commissioner warned of the potential for fraud when unaccountable nonprofits get their hands on all that cash. "Whether it's public funds or it's siphoned off tax dollars that go into a 501 (c) 3 and they get to hand out the money, the potential for fraud is incredible. Those checks are going to go out and they're going to find out that those kids don't actually exist, as we have with charter schools in the past," former education commish Robert Scott said.

Paxton's bill may avoid at least some of the worst excesses wrought by tax credit vouchers. Donations can't be awarded based on athletic prowess. Nor can a nonprofit funnel scholarships to one particular school. But these organizations need only spend a quarter of annual revenue on scholarships for "economically disadvantaged students" who attend failing public schools. About whom the rest of the money goes to, the bill says very little. There's nothing in the law that prevents a student who is already enrolled in a private school from qualifying for a scholarship.

This kind of program does have budget implications, which won't go unnoticed in a state where deep budget cuts have resulted in teacher layoffs. As of last year, it was estimated that some $350 million has been diverted from public coffers in eight states under the various tax credit voucher laws.

H/T TFN


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10 comments
smithjosh
smithjosh

Wow. Could you do some investigation along with your reporting? These are tax credits, not vouchers. Pretty much every district court around the country has said money that private companies and individuals give directly to charity was never public money.  What a warped view you have if you think every dollar you get to spend is a dollar the government "lets you have".

Arizona has had a tax-credit program since 1997 and it's perfectly constitutional and much more efficient and constitutionally sound than vouchers. As a matter of public thrift, they're excellent programs. Just look at the math - the state loses 7 cents in revenue and the public school system doesn't have to spend a dollar educate the child since the private sector is doing it.

ScottsMerkin
ScottsMerkin topcommenter

just a thought, but  its actually possible that a student already enrolled in a private school could actually use the money.  There are some parents out there who actually care about their kids education and spend every penny they have sending them to a private school, so in that situation I think itd be ok.

Guesty
Guesty

"The whole school-choice voucher idea -- essentially a guise to funnel public money to religious schools -- invariably runs afoul of constitutional challenges."

I'm not fan of spending tax dollars on private religious schools, but this statement is false and irresponsible "journalism."  Did you do any research for this?  The U.S. Supreme Court upheld the constitutionality of school vouchers more than a decade ago.  Like it or not, vouchers are constitutional, even if they are bad policy.  

holmantx
holmantx topcommenter

private schools?

holmantx
holmantx topcommenter

There is no excuse for the product DISD puts out.

Montemalone
Montemalone topcommenter

I thought the antichrist was already in charge. That's what Rush said.

scottindallas
scottindallas topcommenter

@Guesty I don't know if a student's tuition is deductible as charity as a charitable deduction would be.  The Supremes never addressed that question.

Guesty
Guesty

@scottindallas @Guesty True, but:  (1) that's not what he wrote, he wrote that vouchers "invariable run afoul of constitutional challenges" causing voucher advocates to shift to the donation mechanism to get around the Constitution, which simply isn't true; and (2) I can't think of any reason why it would be unconstitutional to give tax deductions for donations to religious schools so that they can give scholarships given that donations directly to churches for any purpose at all are tax deductible.   

Guesty
Guesty

@scottindallas @Guesty True, but you are taking Brantley's word for what the law would permit (or at least taking Brantley's bait on what he is implying it would permit).  The proposal says:

"A taxable entity may not claim a credit under this subchapter for a contribution made to a certified nonprofit educational assistance organization if the taxable entity requires that the contribution benefit a particular student or school."

In other words, a taxable entity (which would never be an individual, remember we don't have a personal income tax in Texas) can give money to provide scholarships, but can't require the scholarships be given to specific kids (e.g. the donor's kids) or even go to specific schools.  Brantley's suggesting there may be fraud, but that's the case with all charitable donations.  In any event, that doesn't raise a Constitutional issue, just an enforcement problem.  

scottindallas
scottindallas topcommenter

@Guesty @scottindallas You must deduct a charitable donation by any gifts you get in return.  So, a "donation" to a private school would have to be off-set by tuition costs.  Making the "donation" something else. 

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