Bill providing state tax credits for private school ‘opportunity’ scholarships advances

Opponent predicts another ‘full-throated debate’ over use of public funds for private schools

By: - February 9, 2023 5:45 pm

School buses line up outside Student Transportation of America on Friday, Jan. 28, 2022, in Omaha, Neb. (Rebecca S. Gratz for the Nebraska Examiner)

LINCOLN — Expect another bare-knuckle brawl in the Nebraska Legislature over providing public funds for private schools.

That was the prediction by one senator after the Legislature’s Revenue Committee, on a 6-2 vote Thursday, advanced a bill that would set aside at least $25 million a year in taxpayer funds for tax credits for donations toward private school scholarships.

31 cosponsors

The chief sponsor of Legislative Bill 753, the Opportunity Scholarships Act, said she thinks she has a “really good” chance of getting the measure passed this year after four unsuccessful attempts in previous sessions.

State Sen. Lou Ann Linehan of Omaha spoke earlier this year to students from area private schools about her “opportunity scholarship” bill, Legislative Bill 753. (Aaron Sanderford/Nebraska Examiner)

“I’ve got 31 cosponsors,” said State Sen. Lou Ann Linehan of Elkhorn, the chair of the Revenue Committee.

Thirty-three votes are needed in the 49-seat Unicameral to head off an expected filibuster by public school supporters, who see the bill as a foot in the door to voucher programs and other measures that direct public funds to private schooling.

Two senators on the committee, Lincoln Sens. George Dungan and Eliot Bostar, voted against advancing LB 753.

State Sen. George Dungan of Lincoln.  (Craig Chandler/University Communication)

Dungan said he’s philosophically opposed to devoting public funds for private education and worries that the annual cost of the tax break, which could rise to $100 million a year, is unsustainable and would rob funds from public schools.

‘Full-throated debate’

“I expect a full-throated debate,” Dungan said, as in past years.

Under committee amendments to LB 753 approved Thursday, the maximum amount of the tax cut would be $25 million a year for the first two years, rising to a maximum of $100 million if all the tax credit funds were being used .

An individual or business could get up to a $100,000 tax credit per year, which would be up to half of their total state income tax liability. Estates or trusts could donate up to $1 million a year.

Gives low-income students a choice

Tax credits would be prioritized for lower-income students, and Linehan said, could not be used for existing private or parochial school students, except those entering high school.

Bostar suggested that the bill be amended to allow the same tax credit for donations to public school foundations. Linehan said she was not opposed to that, but it was not included in the bill that was advanced.

During a lengthy legislative hearing on LB 753 last week, supporters of the proposal said that public schools aren’t the best answer for every student, and that lower income families need help to obtain the same choice of a private education as those with financial means.

Opponents of the bill, however, said that it provides a more generous tax break for such donations than provided for contributions to other causes and that funds that would be better spent on helping low-income students in public schools.

Heavy spending by DeVos group

Nebraska is one of only two states that does not provide some public funds for private schools. The battle over the issue prompted a deluge of spending on state legislative races last year.

A major national school-choice organization, the American Federation for Children, which was founded by former U.S. Education Secretary Betsy DeVos, gave more than $710,000 to a Nebraska affiliate that poured $833,000 into eight key state legislative races, including one involving Dungan.

It contributed to wins in five of those races. Dungan narrowly prevailed in his race.

Linehan’s daughter, Katie, is national communications director for the American Federation for Children.

By comparison, the Nebraska State Education Association, the state teachers union, contributed more than $150,000 to candidates that support public education. One independent committee, Preserve the Good Life, which gets money from the NSEA, unions and other groups, contributed an additional $300,000 to similar candidates.


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Paul Hammel
Paul Hammel

Senior Reporter Paul Hammel has covered the Nebraska state government and the state for decades. Previously with the Omaha World-Herald, Lincoln Journal Star and Omaha Sun, he is a member of the Omaha Press Club's Hall of Fame. He grows hops, brews homemade beer, plays bass guitar and basically loves traveling and writing about the state. A native of Ralston, Nebraska, he is vice president of the John G. Neihardt Foundation.