HELENA — Montana senators gave initial support on Monday to a proposed state income tax credit for donations to both private and public education.
Senators voted 26-23 for Senate Bill 410 by Sen. Llew Jones, who said his proposal would help end the continual boycott of either private or public school dollars he’s seen during a decade in office.
The Conrad Republican’s bill would establish $150 tax credits for anyone who donates to scholarship programs for K-12 students enrolled in private schools. It would make the same amount available to anyone who donates to “innovative educational programs” at public schools. The amount that could collectively be donated to either side would be $3 million.
“This way when they go in to pay their taxes they can choose to put education first, they can choose to direct dollars that way,” Jones said. “It’s up to them which side they direct dollars to.”
Democratic opponents argued that, given the discrepancy between public and private school enrollment, the $3 million cap on each fund is not as equal as Jones says it is.
There are roughly 145,000 students in Montana public schools and 7,500 in private schools, according to information from the Montana Office of Public Instruction.
“I would prefer to see a per-student based cap,” Democratic Rep. Mary Sheehy Moe said.
Sen. Jim Keane said a similar tax policy has been enacted in Arizona. The Butte Democrat said that that state has shown dividing donated money in proportion to the geographic regions or districts where it came from leaves out the most needy schools and students.
Republican Sen. Bruce Tutvedt opposed the bill, he said, because it awards tax credits equal to the donation amount. The state’s highest endowment tax credit is currently 40 percent, Tutvedt said.
Jones noted that the credits are limited in dollars instead of a percentage of the donation.
“This one’s a slightly new and innovative limiting methodology,” Jones said.
Tutvedt disagreed with the method in comparison to existing tax credits given as a percentage of the donation to ensure some share remains with the state.
“This is just an outright gift,” Tutvedt said.
As written, the bill allows the cap on the amount of money provided to private or public institutions to increase by 10 percent each year that at least $3 million is donated, no matter how high the cap gets. Jones and Jaret Coles, a legislative attorney, plan to write an amendment to make the threshold increase along with the cap.
Jones’ proposal is one of five major “school choice” bills brought by Republicans this session. Three of the four others are also alive, which propose charter schools, tax credits for private school tuition and a publicly funded savings account for families of disabled children to seek alternative education.