Legislative Testimony, LB295: Opportunity Scholarships Act

Thank you Chairman Smith and Members of the Revenue Committee. My name is Jim Vokal, and I am the CEO of the Platte Institute.

Some people may wonder how an education choice bill found its way into the Revenue Committee.

As today’s National School Choice Week rally shows, education choice inspires great excitement and discussion. But the reason we’re in this room today is not to deal with the usual debates. We’re here because the Opportunity Scholarships Act creates a very small, but meaningful change to our tax code which will give more options to families in need.

It’s a change 17 other states have already made, including our neighbors in Iowa, Kansas and South Dakota. Since this committee last heard a tax credit scholarship bill in 2015, three new states have adopted similar programs.  

I say the change made by the Opportunity Scholarships Act is small, but meaningful, because our tax system already recognizes the principle behind LB295. Today, Nebraskans donating to scholarship funds are eligible for a tax deduction. These incentives to donate exist because people donating to causes are doing a community service that would often have to be taken up by government instead.

This is particularly true for education.

Nebraska’s private and parochial schools, as well as homeschool families, do an incredible service to children, taxpayers, and even our public schools. They provide a savings to taxpayers with every child they enroll in their programs.

When families have the choice of enrolling their child in a private school thanks to an Opportunity Scholarship, they will be increasing the per pupil amount available to other children enrolled in our public schools. And students who matriculate from private school programs often go on to excel in our public schools and universities as well.  

Independent reviews of tax credit scholarships in other states, and even Nebraska’s previous proposal, also show states can experience substantial savings. A nonpartisan analysis found Florida saves $1.49 for every $1 in tax credits. In Iowa, a study by EdChoice finds that a low-end estimate of savings from their tax credit scholarship is $280 million since 2006.

But the Opportunity Scholarships Act deserves your support not just because it saves money over time, but also because it’s the right thing to do for working families in Nebraska.

By upgrading the state’s encouragement for scholarship granting organization donations to a dollar-for-dollar tax credit, more private donations will be made to help families in need. A growing Opportunity Scholarship program will make a life-long difference in leveling the playing field for children from low- and middle-income families.
 

Workers considering Nebraska for relocation can know that whatever their take-home pay, their children will have the same opportunities to receive an education as children from wealthier families.

Opportunity Scholarships provide a formula that is already working in states that are gaining substantial amounts of income, population, and economic growth at Nebraska’s expense.

A study by Dr. Russell S. Sobel, a professor of Economics and Entrepreneurship at The Citadel, identified the top states Nebraska competes with. Of our 5 top rivals, 3 states: Arizona, Florida, and Iowa, already offer programs like the Opportunity Scholarships Act.
 

Florida’s tax credit scholarship is the currently nation’s largest private education choice program.

Nearly 100,000 students are enrolled this year in over 1,700 participating schools thanks to private, tax-credited donations. In 2009, researchers conducted a random survey of 808 parents with children enrolled in the program, mostly single moms from minority backgrounds.

These parents expressed a 97 percent satisfaction rate with their child’s academic progress.

Imagine the incredible amount of good that can be accomplished if all the educational, philanthropic and community institutions gathered here today were able to create a program of this kind in Nebraska.

I humbly ask the Revenue Committee to give them this chance by advancing the Opportunity Scholarships Act.