A drafting error in a bill from the 2017 legislative session has doubled the amount of money in the upcoming two-year budget allocated to a state scholarship program that helps low- and middle-income students attend private school.
The bill intended to allocate an additional $20 million to the Opportunity Scholarship program, but the bill’s language unintentionally made changes to the existing program by updating two sections of law that deal with two different groups of businesses to which the Modified Business Tax, or payroll tax, applies.
The program was already scheduled to offer about $7 million in tax credits in the first year and $8 million in the second year of the upcoming biennium, but legislative lawyers now believe they must offer those credits for two variations of the MBT, effectively expanding the program to $30 million in the next biennium.
The matter came up Wednesday when legislative staff was briefing members of the Economic Forum, who were finalizing revenue projections for the coming biennium. Democratic Assembly Speaker Jason Frierson said that was contrary to the original legislative intent and he planned to change it back.
“The intention is for it to go back to how it was drafted in 2015,” said Frierson, who said he learned about the drafting error last week.
Republican state Sen. Heidi Gansert acknowledged the likelihood that the Democrat-controlled Legislature would resolve the error before the new biennium, but reiterated her support for the program.
“I think it’s critically important we continue the scholarship program,” said Gansert, who is sponsoring a bill to expand the program.
Opportunity Scholarships, created in 2015, give businesses a credit on their payroll tax if they donate to a qualifying scholarship organization. The organization then awards scholarships to students from families with incomes at or below 300 percent of the poverty level.
Although less controversial than Education Savings Accounts, which would directly divert dollars from public schools to parents who could use the money for qualifying educational expenses, the Opportunity Scholarships have been a battlefront in the Democrat-controlled 2019 legislative session. Frierson has a bill that would repeal a 2015 provision allowing the scholarship allotment to grow by 10 percent each year.
Meanwhile, families of the approximately 2,300 children who receive the scholarships are fighting for additional funding. The $20 million one-time bump in 2017 allowed the program to accept more students, but hundreds could lose their scholarship when that funding drops off.
It is also unclear whether any businesses could take advantage of the drafting error in the current fiscal year, which runs until July.
“I don’t know,” said Frierson, asked about the impact to the current year’s budget. “Implementation wise, I don’t know.”