Last year, after the House passed a bill to gradually raise the cap to $85 million, the Senate inserted a poison pill to limit the amount scholarship organizations, known as SSOs, can keep to cover their administrative costs. That issue has been resolved: The limits would be tighter than today, but structured in a way that wouldn’t cripple smaller SSOs.
Now the problem is the Senate’s new policy of automatically sunsetting tax credits. It’s a partially sound idea whose flaws show up when it’s applied universally.
There are a couple of kinds of tax credits. Probably the most common kind attempts to stimulate some kind of new activity, usually economic in nature. The idea is to offer an incentive to a company or industry to relocate or expand its operations here. In many cases, pre-determining when that kind of credit will end makes sense.
But the other kind — and this is where the tax-credit scholarship falls — is the kind that encourages private actors to do what the state either can’t do, or can’t do as efficiently. This is a program gives families more educational options and saves state and local governments money, without creating any concrete harms to anyone else (believe me, if the local school systems that hate this program could prove they’d been harmed, they would’ve offered the evidence by now).
Why should that kind of program be subjected to an automatic sunset, and all the uncertainty that creates for families? As Lt. Gov. Casey Cagle told me, to explain why he cautions against putting a sunset on the program, “these scholarships more times than not follow students for most, if not all, of their k-12 education.” Blindly ending the program will truly harm those students.
The idea seems to be that if something is worth doing, it must be worth stopping — without regard to how much good it’s doing.
Requiring more data reporting (as this bill does) and a periodic review of the program that stops short of automatically ending it would increase accountability without adding needless uncertainty. If that’s what senators really want, that’s what they should do.