Controversial proposal would allow tax credits for private schools

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Capital News Service

LANSING –– In the past two years, public school board meetings have become the sites of heated political debates, with issues like mask mandates, transgender athletes and critical race theory among the hot topics. 

Amidst this polarization, public school enrollment in the state dropped, while homeschooling and private school enrollment jumped, according to a study from the University of Michigan’s Ford School of Public Policy and Boston University. 

The study found public school enrollment down by 3% among K-12 students and 10% among kindergartners, with that decline even steeper, at 19% for low-income and Black students. 

Sen. Lana Theis, R-Brighton, said the COVID-19 pandemic exposed many challenges within the public education system, including issues like parents disagreeing with school policies and the education gap that many low-income students experience.

“One lesson to be learned from all of this is that we need more parental control in our education system to prevent more kids from slipping through the cracks,” said Theis, who chairs the Senate Education and Career Readiness Committee. 

She touts a controversial plan that would make private schools more affordable, Let MI Kids Learn, as the solution. 

First there was a bill vetoed last year by Gov. Gretchen Whitmer, who objected to the reduction in state revenue. 

There is now a petition circulating to get the proposal passed by the Legislature and onto the November 2022 ballot without needing the governor’s approval.

Proponents of the initiative argue that it would put more power into the hands of parents, while opponents counter that it will take money away from and weaken an already hurting public school system. 

The proposal is covered by two petitions. 

The first would change Michigan tax law and allow people to donate money to any organizations that grant scholarships or to new nonprofits that would provide parents of low-income and disabled students with funds for tuition and fees for private schools, tutoring and other educational expenses.

Students who qualify for free-and-reduced school lunch, families at or below 200% of the free-and-reduced lunch eligibility and students with disabilities would be able to get up to $500 based on income and $1,100 based on disability. 

The second petition would allow donors to claim a credit on their state tax returns and get 100% back from the state treasury, with a combined maximum of $500 million the first year. 

Scott Imberman, an education economist at Michigan State University, said the plan differs from similar programs where taxpayer money goes to parents. 

He said the reason for the new approach, with funds channeled through a nonprofit organization rather than the government, could be an attempt to avoid objections based on the First Amendment’s separation of church and state.

According to Private School Review, a company that profiles private schools across the country, there are 685 religiously affiliated private schools in Michigan. That’s 74% of all private schools. 

“Now the money is not coming from the state, it’s coming from this nonprofit that someone else is donating to,” Imberman said of the proposal. “And that person happens to get a tax credit.”

Proponents of the proposal, like Theis, said it would broaden access to private education for low-income children.

But Imberman sees a problem with that argument. 

“The more students who end up leaving the public schools, the more their funding is cut mechanically through the (state aid legal) formula, but also the state might be inclined to cut funding,” he said. 

Major supporters of the proposal include former U.S. Education Secretary Betsy DeVos, an advocate of taxpayer-funded vouchers to pay for private schools. She and members of her family donated $400,000 to the ballot committee in December, according to campaign finance records.

A new report from 482Forward, a Detroit-based education advocacy group, calculated that the proposal would reduce General Fund and School Aid Fund by a maximum of $500 million in the first year, increasing by 20% each year after that. 

The School Aid Fund covers kindergarten-12 costs like the baseline per-pupil funding, special education and at-risk programs. 

If voters approve the proposal, Imberman said students left behind in public schools would be worse off. 

Theoretically, programs like the Let Kids Learn proposal work under the presumption that public schools will compete and improve to retain students. But that’s often only in theory.

“There are some instances where it does seem to happen, but there’s also quite a few instances where the public schools suffer as a result of vouchers,” Imberman said. 

Thomas Morgan, a communications consultant for the Michigan Education Association, said the union strongly opposes the proposal. 

“Instead of taking money out of public schools, we need to hire more educators and increase their salaries,” Morgan said. “If you take half a billion dollars every single year out of our schools, you can’t do that. The shortage will only get worse, and it’s our kids who end up suffering.” 

The MEA, the state’s largest union of teachers and other school employees, is part of “For MI Kids, For Our Schools,” a coalition of 10 organizations opposing the proposal, including 482Forward, the K-12 Alliance of Michigan and the American Federation of Teachers Michigan. 

The petitions need over 340,000 signatures for the Legislature to either pass the proposal into law or to choose to send it to the ballot.

Morgan said if the question makes it to the November ballot, he’s confident that voters will turn it down.

“The vast majority of everyday people here value our neighborhood schools and know that funneling money to these for-profit private schools does nothing, absolutely nothing, to provide equal opportunity for Michigan students,” he said.

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