School choice bill fails in House, sponsor to try again

A bill that would create a pilot program allowing tax-credited donations for education savings accounts failed to pass the Arkansas House Thursday (March 16).

The vote on the Arkansas Parental Empowerment for Education Choice Act of 2017 was 37-47 with four voting present. The sponsor of House Bill 1222, Rep. Jim Dotson, R-Bentonville, said afterward that he would try to find more votes among those who voted either present or against. He said it’s too late in the session to amend the bill.

“It ain’t over until the end of the session,” he said.

He said the 22-page bill’s complexity may have led to the result Thursday.

“I tried to explain it the best I can, and maybe I didn’t go into enough detail or went into too much detail and people zoned out,” he said.

The bill would provide a 65% tax credit for private and corporate donations to nonprofit organizations. The donations would fund education savings accounts in amounts equal to public school foundation funding (which was $6,646 per student in 2016-17) for students to attend public, charter, private or home schools. Potentially, the donations would fund 694 accounts.

The donations would go first to students whose family incomes qualify them for free and reduced price lunches, followed by military dependents and then other students. Each public school district’s student losses would be capped at 1% a year per nonprofit, meaning a district could lose 5% of its students each year.

The bill would sunset after four years and would be limited to $3 million in tax credits in each of its second, third and fourth years, meaning about $4.6 million could be donated with the 65% credit, and those are the only years when the money would be available for the accounts. No tax credits or education savings accounts would be awarded the first year.

Dotson argued that the program would result in $18.4 million in education-related contributions while providing $9 million of tax credits over the four years. For the students accessing the accounts, it could make a lifetime difference – even a generational one.

“This bill is about customizing an education opportunity for an individual student,” he said.

But several legislators spoke against the bill during the nearly hour-long debate. Rep. James Sturch, R-Batesville, said the pilot program would discriminate against parts of the state, including his, without alternatives to local public schools. He said the program would result in schools losing funding for each student, but they still would have to maintain facilities and pay utilities. He said one of his districts, Calico Rock, recently reached 70% of its students qualifying for free and reduced price lunches, qualifying it for an additional $170,000 a year. The loss of four students would drop it below that threshold, causing it to lose the school lunch and the per pupil funding.

Rep. Les Warren, R-Hot Springs, argued that the bill would contribute to the breakdown of public schools because of the loss of funding and because it would deplete schools of involved parents, while Rep. John Walker, D-Little Rock, said the reduction in money flowing to the state treasury would eventually affect public schools.