Effort to repeal Opportunity Scholarships Act qualifies for 2024 ballot

Oct. 11, 2023, midnight ·

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Nebraska voters will have the opportunity to repeal a tax credit that would support scholarships for low-income children to attend private schools at the ballot box next fall.

The Nebraska Secretary of State’s Office verified more than 90,000 signatures collected by Support our Schools Nebraska, a coalition of repeal advocates, the office announced Tuesday.

The number of signatures was well above the required 61,000 — representing 5 percent of registered Nebraska voters — needed to get the referendum on the ballot.

If passed, the referendum would repeal the Opportunity Scholarships Act, which the Nebraska Legislature approved on a 33 to 11 vote in May.

Republicans were joined by north Omaha Democratic Sens. Justin Wayne and Terrell McKinney and south Omaha’s Sen. Mike McDonnell in support of the bill, which was signed by Governor Jim Pillen.

Under the Opportunity Scholarships Act, individuals and businesses can receive a dollar-to-dollar tax credit of 50% of their state tax liability by giving to scholarship granting organizations (SGOs) certified by the Nebraska Department of Revenue.

The SGOs then give private school scholarships to students under a priority level system.

For 2024, the first priority level includes students from families in poverty, students being bullied, students with an IEP, students in foster care, or students with a parent in the military.

As a student’s household income increases, their priority levels drop.

Individuals can receive up to $100,000 dollars in tax credits through the program each year, while the entire state program is capped at $25 million each year for the first three years.

After that, the cap could incrementally rise up to $100 million depending on tax credit demand.

Dr. Rebecca Firestone, executive director of the OpenSky Policy Institute, which has donated to Support Our Schools Nebraska, said those tax credits could indirectly hurt public schools.

“Taxpayers who are ultimately paying for our school systems become responsible for paying both for the public system as well as the private system,” she said. “And there’s just a limited number of dollars out there.”

Firestone also said a majority of taxpayers who have claimed similar tax credits in other states are from wealthy households making more than $200,000 each year.

“The tax benefit in Nebraska is likely to go to wealthier households in Nebraska,” she said.

But that’s not how Sen. Lou Ann Linehan, who introduced the Opportunity Scholarships Act, sees it.

Linehan says the tax credits do not benefit wealthy people, since its recipients spend the same amount of money whether it goes to a scholarship granting organization or the Nebraska Department of Revenue.

“Either way, I'm out $10,000, so when they say it helps rich people, they are just lying,” Linehan said.

Instead, she said her bill allows students to access quality schools who might not otherwise be able to.

“If you're poor, you are locked out of those opportunities,” she said. “And I do not think that's fair. I don't think your zip code should determine where you're educated.”

Linehan said she was not surprised that an referendum to repeal her bill received enough signatures to make the 2024 ballot.

Both Support Our Schools Nebraska and the Keep Kids First committee, an organization aimed at keeping the Opportunity Scholarships Act, have raised more than $1 million to either repeal or retain the bill.

But Linehan is not planning to do any additional fundraising herself.

“I am not going to raise money to fight the teachers union on a ballot initiative when what we really need to focus on is legislative seats,” Linehan said.

In June, the OpenSky Policy Institute released a poll that showed 55 percent of survey respondents would vote to repeal the Opportunity Scholarships Act, while only 42 percent support the bill.

Linehan said the survey was misleading.

“The way they described the bill, I would have been against it,” Linehan said.

The signatures gathered from the petition drive did not meet the 10 percent requirement that would keep the bill from taking effect on January 1, 2024, which Support Our Schools says was never their goal.

That means the opportunity scholarships will be given out before the referendum vote takes place in November.

Donors to private school scholarship funds will still be able to claim tax credits for 2024 even if the ballot referendum is successful.