Senator Ted Cruz (R-Tex.) Introduced an amendment to the Senate bill that would expand tax-free college savings accounts to allow their use for private K-12 school enrollment. (Alex Wong / Getty Images)
The Senate bill pbaded in the early hours of Saturday morning could have mbadive implications for schools and universities, students and parents. Advocates of public education warned that certain provisions could put pressure on state and local spending for public schools, while giving parents incentives to send them to private schools.
The bill went from 51 to 49 after the Senators amendments, including some scribbled on the margins of the bill. The legislation has to be reconciled with a version approved by the House of Representatives before sending it to President Trump, but it is likely that many of the provisions that affect education will remain.
[Senate GOP tax bill pbades in major victory for Trump, Republicans]
Defenders of public education overwhelmed the project of offering incentives to parents of private schools through tax-free school savings accounts while eliminating the deduction for state and local taxes that finance public schools. 19659003] "It's crazy that we eliminate the ability of people to deduct state and local taxes that go directly to local services, including schools … while at the same time providing a $ 10,000 incentive for people to send to their children to private schools, "said Sasha Pudelski, deputy director of policy and advocacy for the American Association of School Administrators, which represents public school superintendents across the country.
Here is a summary of what the bill could mean for education.
1. It's good for Hillsdale College (and others, too)
Much of the debate over the bill focused on Hillsdale College, a small Christian conservative institution in Michigan whose benefactors include the Secretary of Education Betsy DeVos and whose graduates include his brother, Erik Prince, founder of the beleaguered security contractor Blackwater. Late on Friday, after Sen. Pat Toomey (R-Pa.) Drafted an amendment that would exempt the university from an endowment tax, Democrats criticized the Republican Party for protecting an institution with connections to the administration. .
PASSING NOW: Voting my amdt to get the DeVos Tax Earmark, a provision that offers a tax exemption for Hillsdale College, an elite private school funded by DeVos that refuses to comply with federal anti-discrimination laws. These special interest raffles are scandalous!
– Senator Jeff Merkley (@SenJeffMerkley) December 2, 2017
But it turned out that the version approved by the Senate ended up saving some other schools that feared their endowments would have to pay a lien.
The Senate measure would impose a special tax of 1.4 percent on investment income in an estimated 25 to 30 private schools and universities with large endowments. The House version would impose around 65 to 70 schools with endowments of at least $ 250,000 per student. The Senate threshold is higher: $ 500,000 per student.
That change would mean about 40 schools that thought their endowments would be taxed,
including Hillsdale College – were removed from the list. The difference is one of the points that must be reconciled before a final bill is approved by Congress.
2. It's good for parents of private schools
Hours before the bill was pbaded, Senator Ted Cruz (R-Tex.) Introduced an amendment that would allow parents to use a Special tax-free college savings account to pay tuition for K- private 12 schools, a provision that would greatly benefit the wealthiest families that private schools can already afford.
"This change will have real and significant effects, and your vote will expand the options for parents and children to spend their own money and prioritize the education of the next generation of Americans," Cruz said Friday night in the Senate.
The amendment was approved by a hair, facing the opposition of all Democrats and two Republican senators: Susan Collins of Maine and Lisa Murkowski of Alaska. In the end, Vice President Pence had to be called after midnight to cast a decisive vote, as he did when the Senate confirmed DeVos as secretary of education.
The amendment is virtually identical to a provision of the House version. DeVos praised the legislation of the Chamber: "This is a good step forward, reflecting that education should be an investment in individual students, not in systems," he said last month.
For advocates of school choice, the expansion of tax-free college savings Accounts are considered to provide more parents the opportunity to send their children to private school. Parents can spend up to $ 10,000 a year on those accounts.
"It's a good first step," said Sister Dale McDonald of the National Association of Catholic Education.
Public school advocates attacked the measure by saying it undermines public schools by providing financial incentives for parents to transfer their children to private schools.
Senate Republicans "do what they can to diminish the popularity and success of our public schools," Pudelski said.
3. Not so good for public school budgets
Like the House bill, the Senate bill reduces the federal deduction for state and local taxes. Advocates worry that states, counties and cities will have more difficulty raising money for schools, which get almost all their money from state and local tax revenues, because those taxes will no longer be deductible.
Separately, the bill prohibits school districts from using "tax-free advance rebates" to refinance school bond debt, a ban that could be costly for districts seeking to refinance to save money, according to John Musso , executive director of the Association of Schools. Business Officers International
Early repayment bonds "are a cost-effective way for districts to refinance high-interest debt at lower interest rates, potentially saving hundreds of thousands of taxpayer dollars in lower debt payments," Musso wrote in a blog post on the website of the American Association of School Administrators.
4. Save deductions from school supply
The House bill eliminates a $ 250 tax deduction for teachers who spend their own money on school supplies, a move that angered many teachers , who spend an average of $ 500 annually, according to a survey.
[Teachers spend nearly $500 a year on supplies. Under the GOP tax bill, they will no longer get a tax deduction.]
The Senate bill not only saves the deduction, but also doubles the $ 500 bill. It is not clear what will happen to the provision as the bills move towards reconciliation.
5. It's better for college students
When it comes to student loan interest deductions and tuition waivers, Senate tax law is a better deal for college students and college graduates than the version of the camera.
the student loan interest tax deduction, which allows people who pay student loans to reduce their tax burden by up to $ 2,500 a year. The House version also taxes tuition waivers, which allow many graduate students to attend free clbades, such as income, angering students who said such a tax would make their education unaffordable.
But the Senate leaves those provisions intact. The Senate plan also excludes a proposal from the House to transfer three higher education tax credits to one benefit.