Latest news with #EducationalChoiceforChildrenAct
The Hill
10-07-2025
- Politics
- The Hill
The ‘big, beautiful' fight over school choice ends with escape clause for blue states
Republicans quietly passed a first-of-its-kind national school choice program in President Trump's 'big, beautiful bill,' but celebration among advocates was tempered after the Senate added a provision giving blue states a way out. The Educational Choice for Children Act (ECCA) was on turbulent waters throughout the process, at one taken out of the bill due to the Senate Parliamentarian and leaving backers on the edge of their seats. Its final form lifts the cap on how much the federal government can spend on the issue, but its opt-in feature means school choice programs might not make new advances in the Democratic-led states supporters have long targeted. 'School choice is the civil rights issue of the 21st Century. Every child, regardless of race or wealth or ethnicity, deserves access to an excellent education. This tax credit provision will unleash billions of dollars every single year for scholarships for kids to attend the K-12 school of their choice,' Sen. Ted Cruz (R-Texas) said in a speech before the Senate voted to pass the legislation, which President Trump signed on Friday. The basic premise of ECCA is a tax credit that will go to individuals or corporations who donate to nonprofits that offer educational scholarships to students looking for options outside of traditional public schools. The money from the program can go to certain qualified expenses such as tuition, fees, tutoring and supplies for students at public, private or religious schools. It can also cover transportation, room and board and computer equipment. 'One thing we should certainly not be doing is creating a two-tier education system in America — private schools for the wealthy and well-connected, and severely underfunded public schools for low-income, disabled and working class kids,' said Sen. Bernie Sanders (I-Vt.) at a press conference against the reconciliation bill back in June, K-12 Dive reported. 'That is not what this country is supposed to be about.' School choice advocates and Republicans in Senate and House leadership fought hard for the provision, as it would represent the first national school choice program in the country, but in the end some of the language came up short for advocates. 'I will say the House version ended up being better than what passed, and there's still a lot to be done to see if it's improved on down the road,' said Robert Enlow, president and CEO of EdChoice. 'I would phrase it this way — not to be a naysayer, which I'm not — I'm excited about it. So we at EdChoice are excited that more families have more options, except, I would say, Congress took a big swing at school choice and hit a single in this program,' Enlow added. The biggest loss for the school choice crowd was an opt-in option that was added in the Senate, which allows states to reject the tax credit. The provision says governors can decide whether to opt in to the program and designate which scholarship groups can participate in it. 'The option is new, and … they're going to have an additional hurdle to go through to ram vouchers into states like Michigan,' said Joshua Cowen, professor of education policy at Michigan State University. 'There's going to be enormous political pressure from these organizations to push governors, whether they're Democrats, whether they're Republicans, to opt into this. So … it doesn't give them the automatic force that they wanted to, their next pivot is going to be to try to put a lot of dollars behind pushing governors to opt into this bill,' he added. That tees up fights in states with divided governments. North Carolina Senate leader Phil Berger (R) has said he is going to work to ensure his state participates in the program, setting up a conflict with Democratic Gov. Josh Stein. 'I will write legislation to enable North Carolina to take part in President Trump's School Choice Plan, allowing taxpayers to write off contributions to organizations that fund private school scholarships,' Berger posted on X. There was also a cap added on how much a person can donate with the federal dollar for dollar tax credit, up to $1,700 a year, but the cap overall on how much the program can cost the federal government, which was at $5 billion in the beginning, was lifted entirely. An analysis from the Institute on Taxation and Economic Policy found if 59 million qualified taxpayers choose to take advantage of this tax credit, it could cost the federal government $101 billion per year, although it is highly unlikely that many would take part. Congress's Joint Committee on Taxation estimates the plan will initially cost $3 billion to $4 billion a year and go up overtime. 'There's potentially a lot more money that could get spent on this national DeVos voucher scheme moving forward, even if it doesn't automatically accomplish the goal of ramming it into blue states like initially sought out, they're going to have to take an additional step, but there's now more, much more money for them to potentially devote to this program,' Cowen said. Moving forward, both advocates and opponents of school choice will be looking to harden their positions, especially as some supportive of this measure are wary of hits made to protections for religious schools. John DeJak, director for the Secretariat of Catholic Education for the U.S. Conference of Catholic Bishops, told the National Catholic Register he was concerned about language that was stripped out of the final version of the bill that guaranteed freedom of operation for religious schools that would accept money from this program. 'There are state level and federal level protections on religious liberty, and so those ideally can be helpful here. The rules and regulation process may affirm that even further as this program will go through Treasury rules, and then we'll really know exactly how it is implemented in the states. And so, we want to wait to see what the rules process looks like on that front,' said Brian Jodice, national press secretary for the American Federation for Children. Opponents will look to fight against states signing up for the program and emphasize concerns that this legislation will hurt public schools. 'The significant disparities in private school access [in] states … What does this mean for rural communities? What does it mean for kids with disabilities?' asked Blair Wriston, senior manager of government affairs at EdTrust. 'We're really disappointed that this provision was included, and we don't think it's going to improve outcomes for the 90 percent of kids in public schools. That should be our focus,' Wriston added.
Yahoo
01-07-2025
- Politics
- Yahoo
Big Tax Bill Passes Senate With Less ‘Beautiful' Plan for National School Choice
The Senate on Tuesday passed the nation's first federal tax credit scholarship program as part of a massive tax and spending bill President Donald Trump wants to sign by July 4. But the provision is significantly watered down from the one school choice advocates have been working toward since the first Trump administration. As it currently stands, states may opt in, meaning many Democratic-majority states probably won't participate. Get stories like this delivered straight to your inbox. Sign up for The 74 Newsletter Jim Blew, co-founder of the Defense of Freedom Institute, a conservative think tank, called the Senate passage 'an important step toward making sure every family and teacher in our country enjoys education freedom.' But the restrictions, he said, will 'make it very, very hard to put funds into the hands of families who just want to get their children in a better school.' House staff began deliberations over the bill immediately, with a vote expected Wednesday. But it's unclear how members will greet the revamped choice plan. The plan grants donors to scholarship organizations a tax credit for the same amount they contribute. Those nonprofits then award funds to families for private school tuition and other educational expenses. But unlike the more expansive plan the House passed in late May, the Senate gives states a say over which groups can participate and strikes language that would have prohibited any control over private schools. That could be a major sticking point for House members, said Joshua Cowen, an education professor at Michigan State University and a vocal voucher opponent. 'Maybe they'll just hold their nose and pass it,' he said. But that would come at the cost of 'the most wide-ranging federal regulations we'd ever see on private and religious K-12 schools.' Texas Sen. Ted Cruz, a longtime sponsor of the Educational Choice for Children Act, didn't mention the revisions when he addressed the chamber during the early morning hours Tuesday after members worked on Trump's 'one big beautiful bill' through the night. 'This tax credit provision will unleash billions of dollars every single year for scholarships for kids to attend the K-through-12 school of their choice,' he said, calling school choice 'the civil rights issue of the 21st century.' The new program is just a small part of a legislative package that continues Trump's 2017 tax cuts and could add at least $3 trillion to the national debt by 2034. With a trifecta in Congress and the White House, Republicans passed the bill in a party-line vote. But Vice President J.D. Vance still had to break a 50-50 tie in the Senate after opposition from Republican Sens. Rand Paul of Kentucky, Thom Tillis of North Carolina and Susan Collins of Maine. The legislation includes other child-related provisions, including the extension of an existing $2,000 child tax credit. The House version boosts it to $2,500, while the Senate version increases the credit to $2,200. 'Trump accounts,' a new feature, would provide a $1,000 investment fund for children that they could later use for education or a house. Among the most controversial changes are cuts and work requirements for Medicaid and food assistance programs for low-income families. The $1 trillion proposed cut to Medicaid could especially impact children in rural areas who are more likely to depend on the program for health care. On the Senate floor Monday morning, Senate Majority Leader John Thune said the 'reforms' make the program more efficient by targeting 'people who are supposed to benefit from Medicaid.' But Democratic Sen. Ron Wyden of Oregon, ranking member of the finance committee, warned: 'Kids with disabilities will lose health care.' Those provisions have generated far more debate among GOP members than the school choice provision. But Republicans made significant changes to that portion after a Senate official ruled Thursday that it didn't meet the standards for reconciliation and would require 60 votes to pass. In addition to allowing government oversight, Republicans dropped the total amount a donor can contribute from 10% of their annual income to $1,700. 'To raise $1.7 million for scholarships, [organizations]need to identify 1,000 donors, which is a lot harder to do,' Blew said. 'That wasn't done to help students or families.' Multiple questions remain over which families stand to benefit the most from the program. Some existing scholarship groups target funds to low-income students, but the federal program lacks such a requirement. The bill sets eligibility at 300% of median income, meaning that in higher-income areas, families earning nearly half a million dollars could use the scholarships. Preference for the scholarships would also go to students who received them the previous year or to their siblings, contributing to concerns that families who already have their children in private schools would be more likely to receive a voucher. 'You can be a very wealthy family in a very wealthy area and still be eligible for [these] funds,' said Jon Valant, director of the Brown Center on Education Policy at the left-leaning Brookings Institution. 'Who knows exactly how this is going to play out.' Supporters say the program will bring private school choice to students nationwide at a time of increasing demand. Tennessee's newly expanded voucher program, for example, received roughly 33,000 applications in the first few hours it was open on May 15, creating technical glitches Opponents argue the program allows donors to avoid taxes and would fund tuition at schools that discriminate against students. Related The House version, Cowan said, 'rams' vouchers into states like Michigan that have rejected them since 2000. Michigan billionaire Betsy DeVos, who promoted a similar federal plan as education secretary during Trump's first term, failed to get a voucher initiative on the ballot in 2023. Kentucky and Colorado said no to private school choice initiatives last November, and Nebraska voters repealed a program lawmakers passed in that state in 2024. In other states — Ohio, South Carolina and Utah — judges have ruled that voucher programs violate the law. On Tuesday, DeVos sounded a triumphant note, calling the Senate passage 'a major win for students and families' on X. Cowan said the vote would not give the former secretary 'her long-sought after goal of forcing vouchers into the states using the tax code' and gives 'substantial authority to state governors and perhaps [education] agencies to say 'no.' ' Education Secretary Linda McMahon welcomed a provision that limits student loans for college, but had nothing to say about the school choice aspect of the bill. Related Critics frequently cite the scarcity of private schools in rural areas as the reason they oppose vouchers. A data analysis from the Urban Institute shows that over 60% of students in urban areas live within two miles of a private school, compared with just a quarter of students in rural areas. Participation in the new program depends on how many families apply and the size of scholarships. Historically, take up rates have been relatively low with new voucher programs, said Colyn Ritter, a senior research associate at EdChoice, an advocacy organization. If scholarships are large enough to cover the full ride to some private schools, which averages about $12,000 nationwide, more families might seek a scholarship, Ritter said. But that amount wouldn't be enough to afford more expensive schools in the Northeast. If scholarship awards are as low as $2,500, that might offer a cut on tuition for families who can make up the difference, but it wouldn't be enough to make private school an option for a family in poverty, he said. Families could use the scholarships for homeschooling costs, like tutoring, curriculum and educational therapies. But Ritter called homeschoolers a 'hard-to-predict' group. The population has grown more diverse racially and politically. Some, he said, could be 'early adopters' of the new funds, but many homeschoolers are still leery of government-run programs. 'We just want to make sure that there are no strings attached and that we won't end up in some government database that can track us and tell us what to do in the future,' said Faith Howe, president of Texans for Homeschool Freedom. Related The Children's Scholarship Fund in New York is one of the nonprofits that would likely participate in the program. The group has affiliates in 23 states, including several blue states, that are closely watching negotiations over the final wording, said spokeswoman Elizabeth Toomey. Her organization has a small homeschool pilot program and might take advantage of the new legislation to expand it. Forty families currently receive $1,000 to spend on approved expenses through the ClassWallet platform, the same way many state education savings accounts operate. But the group's core mission, Toomey said, is awarding roughly 7,000 scholarships each year to students from low-income families across New York City. Recipients receive, on average, about $2,500 toward tuition, but Toomey said the new federal program would allow the organization to increase the award and serve more families. She acknowledged that a scholarship might not help the 'poorest of the poor,' but has helped push many families 'into a position where they can afford private school.'
Yahoo
27-06-2025
- Business
- Yahoo
Senate parliamentarian nixes tax incentives for school choice, religious college exemptions
WASHINGTON — A handful of education-related tax provisions were stripped from the Senate reconciliation bill on Friday morning after the parliamentarian ruled they did not adhere to strict budgetary rules that would relieve them from a filibuster. One of the biggest proposals Republicans sought to include in the massive tax package was a plan to promote school choice by providing scholarships to students who wish to attend private secular or religious schools. Much of the proposal was based on the Educational Choice for Children Act to implement a tax credit scholarship plan, legislation that Utah Rep. Burgess Owens co-sponsored in the House. 'Overnight, the Senate parliamentarian struck down key school choice provisions in the One Big Beautiful Bill,' Owens told the Deseret News in a statement. 'Every child deserves the freedom to learn, and every parent deserves the power to choose what's best for their family. I'm grateful to our partners in the Senate for their continued leadership as we work together on next steps to ensure school choice reaches every child in every zip code.' One of the major tenets of the program is a $4 billion annual tax credit for those who donate to scholarship organizations that help pay for educational expenses such as private school tuition, books, or the cost of homeschooling supplies. The program would expand school choice, Republicans argue, by opening the door to private education for families who otherwise could not afford it. Families would be eligible for the program so long as they earned at or below 300% of the area's median gross income. For example, in Salt Lake County where the median income is $94,658, any child in a household earning less than $283,974 could qualify. The tax credit scholarship plan was estimated to cost roughly $26 billion over the next decade, according to the Joint Committee on Taxation. The parliamentarian also nixed language exempting religious schools from a proposed endowment tax that Republicans hope to tuck into their massive reconciliation bill, making it unclear whether the planned taxes will remain in the package. Republican lawmakers are pushing to increase endowment taxes for U.S. universities, proposing a new tiered system that could cost elite colleges hundreds of millions of dollars each year. The proposal initially included language carving out exceptions for most religious schools, exempting them from the higher taxes. But under the rulings issued on Friday, the religious exemptions do not adhere to reconciliation guidelines and would instead be subject to the 60-vote threshold. Through the budget reconciliation process, Republicans can circumvent a filibuster and Democratic opposition to expedite the passage of certain legislation by a simple majority vote. There are certain rules that dictate how often reconciliation can be used, and the procedure can only be used to advance budget-related legislation such as taxes, spending and the debt limit. However, if provisions run afoul of those rules, it will instead be subject to the typical 60-vote threshold. Once a budget reconciliation blueprint is finalized, it then only requires a simple majority in the House and Senate to pass. The parliamentarian removed several proposals on Medicaid and other tax-related measures throughout this week, sending Republicans into a scramble to adjust the bill language and finalize the full package before their self-imposed deadline next week.
The Hill
25-06-2025
- Business
- The Hill
The tax rate that may drop below zero
If Republicans in Congress have their way, tax rates will be negative for a large portion of investment income. What does that even mean? Let's start with current law. If you are fortunate enough to have purchased a stock for $1,000 and sell it for $10,000, under current law you would pay tax on the $9,000 capital gain — in other words, on the $9,000 your investment earned. Assuming you are an individual with income between $48,351 and $533,400, the federal tax rate on your $9,000 of investment income would be 15 percent, for a total tax bill of $1,350. The bottom line is that you would have sold the stock you bought for $1,000 at a price of $10,000, paid $1,350 in taxes, and pocketed the remaining $7,650. If, however, Congress passes the Educational Choice for Children Act, instead of selling your stock and pocketing $7,650, you could simply donate your stock in accordance with the legislation and pocket the full $10,000. To be eligible, all you would have to do is give your stock to a 'Scholarship Granting Organization' that funds vouchers for private and religious schools. That would qualify you for a $10,000 credit on your federal taxes. A credit is totally different from the conventional and very familiar charitable deduction. The charitable deduction reduces your taxable income, which reduces your taxes in an amount that is a mere fraction of the amount you donated. Donating stock under this new act is different: It would give you an actual credit on your tax bill — a reduction in the total taxes you owe on all of your other income — for the full $10,000. In other words, if you give your appreciated stock to such an organization, you get $10,000 from Uncle Sam in the form of a tax credit — the same amount of money you could have gotten from selling your stock. The only difference is that, this way, you pay no federal tax. But it gets even better: You will also be able to claim the $10,000 donation as a charitable deduction on your state and local tax return. For high income earners where I live in New York City, this could reduce one's state and local taxes by as much as 11 percent, or $1,100. This would make the tax rate minus-12.2 percent on your $9,000 gain, since the income would not be taxed and it would be enhanced by a $1,100 reduction in the state and local tax bill. In essence, if you sell your stock worth $10,000 and live in a high tax state like New York or California, you could pocket something like $6,550 (the $9,000 profit less $1,350 in federal taxes and $1,100 in state and local taxes). But if you give it away pursuant to the legislation, you could pocket the full $10,000 federal tax credit against your other taxes, plus the state and local tax reduction. The bottom line for those who prefer words to numbers is that for a large portion of investment income, the federal tax rate would go to zero and there would be a state and local tax cash benefit. It would be like having zero federal tax on a teacher's income of $70,000 and then have the local government give the teacher a check for a portion of his or her income. This is something that inconceivable for most workers, but it seems likely to become a reality for most investors. The act does have some limitations. But the wealthier the investor, the more millions they could save in taxes. And every dollar saved by an investor under this act is a dollar some other taxpayer will have to pay. The measure is expected to be enacted by mid-July and has already passed the House. Almost all the discussion concerns the debate over government funding for private and religious schools. Although this debate has merit, it has unfortunately eclipsed the extraordinary tax benefit that this provision would confer upon wealthy investors. Congress would have a hard time directly shifting a substantial part of our nation's tax burden from wealthy investors to working people. Doing it indirectly under the guise of funding school vouchers, has enabled them to evade public scrutiny. Evading public scrutiny will, however, become much more difficult when the act ultimately takes its toll on tax fairness and budget deficits. Howard Yaruss is a lawyer and a professor at NYU. He is the author of 'Understandable Economics.'
Yahoo
07-06-2025
- Business
- Yahoo
Idaho senators should protect school choice in ‘Big Beautiful Bill'
President Donald Trump's 'One Big Beautiful Bill' is now moving through the U.S. Senate, and conservative Christians are thrilled with many of the provisions that have been included so far. Although we don't yet know how the Senate version of the bill will shake out, it's worth noting that the version passed by the House late last month fulfills many of the pro-family policies made by the Trump administration. These include an expansion to the child tax credit for working families, tax benefits for adoptive parents and making permanent the Trump personal income and business tax cuts that fueled the above-average economic growth America experienced before the pandemic derailed international markets. However, one provision in particular that would improve educational access and outcomes for all students has flown under the radar so far. The provision would help more than one million students across the country access the educational support they need by creating special tax benefits for private donations to scholarship-granting organizations. It is modeled after the Educational Choice for Children Act, a federal proposal that has been introduced multiple times over the past several years and has earned the support of Sen. Jim Risch, R-Idaho, as well as other conservative stalwarts like Sen. Josh Hawley, R-Missouri, and Sen. Tim Scott, R-South Carolina. Scholarship-granting organizations already exist in many states, providing scholarships directly to students for tuition, tutoring, special needs services, education technology and curriculum materials. The provision offers both a supplement and alternative for students in states like Idaho, which has already begun moving down the road to more universal school choice programs by offering a new $5,000 refundable tax credit paid directly to the private school and homeschool families. Some parents — particularly within the homeschooling community — have voiced concerns that new school choice initiatives, such as Idaho's refundable tax credit, might jeopardize their educational freedom. After all, government money usually comes with strings attached. When you take the government cheese, you have to step into the regulatory mousetrap. And even if those restrictions aren't imposed right away, the door remains open for future state and federal mandates. Importantly, the ECCA provision in the One Big Beautiful Bill addresses these concerns by making sure no government funds go to the organizations, schools, or families involved — thereby avoiding another opportunity for government regulation. Instead, the ECCA establishes tax incentives for private donations to scholarship-granting organizations, which then award scholarships directly to students. Because this is private money — not government dollars — families can freely choose the best educational options for their children without government interference. All of this explains why the ECCA is supported by homeschool freedom advocates, including the Home School Legal Defense Association. In fact, the ECCA model helps ensure that parents remain in control of their children's education, consistent with biblical principles like Ephesians 6:4, which commands fathers to bring up their children in the discipline and instruction of the Lord. Not only would the ECCA provision in the 'One Big Beautiful Bill' help parents fulfill this biblical responsibility, but it would also expand educational opportunities for children currently stuck in failing public schools, no matter the state in which they live. Nationwide school choice which empowers parents while also protecting educational freedom is a high priority for Trump — and it should be just as high a priority for our legislative branch as they set education policy. With that in mind, we call on the U.S. Senate to keep the ECCA provision in whichever version of the 'One Big Beautiful Bill' they adopt. Our children — and their families — deserve it. Blaine Conzatti is the president of Idaho Family Policy Center.
