Serious concerns about LB 753

Dear Editor,

I would like to respond to the recent North Platte Telegraph editorial, reprinted in the Gazette, opposing the campaign to put LB 753, the new “opportunity scholarships” law, on the November 2024 general election ballot.

For me, concerns remain about this measure.

The first is the tax-credit provision.

Donors to one of the “scholarship granting organizations” created by LB 753 are to receive a dollar-for-dollar tax credit, far more generous than the deductions provided for most charitable giving.

It’s unclear why these donors are rewarded with a tax credit. The annual limit for such credits under LB 753 is the lowest of: 1) a donor’s scholarship contributions that year; 2) $100,000 for individuals and corporations and $1 million for trusts and estates, or 3) half of that year’s income tax liability. I’m in no position to know the tax liability for that level of income, but the limit seems high.

Initially, $25 million a year of state money is to be set aside for these credits, which could grow to $100 million if demand warrants.

The law also is set up to give the “scholarship granting organization” a chunk of the incoming donation money. Ten percent of that money would go to those groups for “administrative costs,” which could decline to 5 percent if the pool of donations grows enough.

That seems to be a lot of money for a middleman that hasn’t been needed for the whole time Nebraskans have donated to private schools.

To become an SGO, an applicant must: be a 501(c)(3) tax-exempt nonprofit; offer one or more scholarship programs; and make its scholarships available to more than one school.

No educational experience is required for those who will evaluate who gets a scholarship.

Another concern is where the money will come from as the years go by.

This bill passed in a time following COVID when federal spending and grants to state and local governments and businesses helped make Nebraska’s coffers unusually flush. To its credit, the Legislature this year passed another law that will provide $305 million more in school aid this year, probably raising the state out of the bottom of the rankings of state funding for K-12 education.

However, no one knows whether the state’s economy will be strong enough in the future to sustain that level of funding for either law.

According to the Omaha World-Herald, the Nebraska Department of Revenue reported this month that overall tax collections from October to May were some $53 million short of what was forecast. If that continues, the money set aside in LB 753 for tax credits (again, $25 million a year to start) could necessitate some painful cuts and/or tax increases in areas yet to be determined.

That seems to be short-sighted stewardship of public money.

Like many individuals and institutions, public and private schools struggled during the pandemic as they tried to deal with a disease new to mankind and a flood of changing information of varying merit. Since then, criticism of public schools across the nation has ramped up. Still, 90 percent of Nebraska’s children are educated in public schools, and they remain the only option other than homeschooling for many western Nebraska families, especially those with high school-age kids.

It is my feeling that public tax money and benefits should go for public education.

It’s important to remember that the petitions do not call for outright repeal of the law. If 61,000 signatures are collected by the deadline, the measure would be placed on the November 2024 ballot. If twice that many are collected, the law would be suspended pending a popular vote.

This would give people more than a year to look into the issue as extensively as they want, make up their minds, and decide whether to support or oppose LB 753.

Please consider supporting this petition drive.

Sincerely,

Frank Hassler

Omaha, Neb.