June 2019 • Number 446 Council for American Private Education outlook Voice of America’s ­private schools  Treasury Amends Proposed Rule Affecting Donations to Scholarship Programs

Almost ten months after issuing to donations to tax credit scholarship beyond the state tax credit. proposed regulations that drew the programs, which, unlike the “charities” Sources at the Treasury Department concern of school choice advocates, the set up to circumvent the new tax law, believe that for most donors, the final US Treasury Department has issued have existed for years without IRS policy largely amounts to a “reset” to the a final rule on the tax treatment of concern. A Heritage Foundation situation that prevailed before the 2017 payments made under state and local tax analysis indicated that the proposed tax bill, the exception being the relatively credit programs. Despite the appellation rule would punish donors to tax credit small number (approx. 150,000 “final,” it includes guidance that will scholarship programs “who choose to taxpayers) of high earners subject to the necessitate further rulemaking in the itemize their deductions but do not alternative minimum tax (AMT). coming months. reach their SALT cap.” For them, “the This “safe harbor” provision for Backstory cost of donating to existing tax credit individual donations under the SALT programs [would] increase significantly.” cap, as well as some other aspects of In 2017, Congress passed a major School choice advocates pushed for the new policy concerning donations overhaul of the federal tax code which changes to the proposed rule, fearing by business entities (including the new included a new $10,000 cap on state that, by making the tax treatment treatment of donations to tax credit and local tax deductions. In response, of donations to these programs less scholarship programs as “ordinary and a handful of high tax states passed laws favorable, the proposed policy would necessary business expenses”), will need that would allow government agencies mean fewer donations and therefore to be finalized in the coming months to accept certain state and local taxes fewer scholarships for children from low- through yet further rulemaking. as “charitable” contributions, thus income families. Reaction permitting taxpayers to circumvent the new federal tax law by continuing Leslie Hiner, Vice President of to claim a deduction for those tax Legal Affairs for EdChoice, said in a payments on their federal return. statement that “the promise of a new On August 23, 2018, the Internal proposed rule to alter today’s final Revenue Service (IRS) issued rule is a positive step forward,” but proposed regulations designed to “the rule adopted today remains an thwart those “workarounds.” Under unwelcome change in tax law that that proposal, if a state grants a works against those who generously 70 percent state tax credit and the give to charities.” John Schilling, taxpayer donates $1,000 to an eligible President of American Federation entity, the taxpayer, having received a of Children, also issued a statement, $700 state tax credit, would have only saying, “We are very pleased to see the remaining $300 eligible for a federal Final Rule the Treasury Department follow up on tax deduction. Previously, the entire the special rules issued last December $1,000 contribution was deductible On June 11, the Treasury for corporate contributions with new on the federal return. As explained by Department announced that individual guidance, in the form of a Notice, the Wall Street Journal, this new policy taxpayers will be allowed to treat allowing individual contributors to tax would treat “donations for state tax donations to tax credit scholarship credit scholarship programs to continue credits like tickets to charity galas, where programs as payments of state or local to receive a full deduction on the value donors claiming a tax deduction have to taxes for federal income tax purposes, of their donations up to $10,000.” subtract the value of their surf-and-turf up to the $10,000 cap. In other words, Meanwhile, Education Secretary Betsy dinners from their contributions.” individual donors under the cap will be DeVos called the final rule “fair to able to claim the federal deduction as students and taxpayers alike." The Concern well as the state tax credit. Above the With further rulemaking on the $10,000 cap, donors will only be able to horizon, this is a discussion that will The proposed crackdown also applied claim a federal deduction on amounts continue.

© 2019 Council for American Private Education First Lady of Puerto Rico Addresses AFC Summit The First Lady of Puerto Rico, Beatriz harassment. The program’s total enrollment Rosselló, spoke at the American Federation is capped at 3 percent of Puerto Rico’s total for Children’s (AFC) tenth annual National student population in 2019–20, which is CAPE member organizations: Policy Summit in Chicago on May 1. Her estimated at 8,790 students.” Agudath Israel of America primary order of business was to accept the A lawsuit against the new law was rejected American Montessori Society AFC School Choice Policymaker of the Year by the Puerto Rico Supreme Court in Association Montessori Award on behalf of her husband, Governor August 2018. According to AFC, opponents International–USA Ricardo Rosselló. Governor Rosselló was “argued that the program ‘supported’ private Association of Christian Schools forced to return to Puerto Rico because of the schools in violation of the Puerto Rico International death of former Puerto Rico Governor Rafael Constitution’s ‘Support Clause.’ This clause Association of Christian Hernández Colón. was the reason the Puerto Rican Supreme Teachers and Schools Court had invalidated a similar program in Association of Waldorf An Island Hit Hard 1994. In upholding the program, the Court Schools of N.A. agreed with the families that the Free School Ms. Rosselló was introduced by Hergit Christian Schools International Selection Program is constitutional because “Coco” Llenas, Director of Latino Outreach Council of Islamic Schools it ‘supports’ needy families, not schools, in North America for AFC. Llenas spoke movingly of the and any benefit to private schools under the challenges faced by Puerto Rico following Council on Educational Standards program is merely incidental.” and Accountability Hurricane Maria, a devastating storm that Evangelical Lutheran Church made landfall on Puerto Rico on September PR First Lady in America 20, 2017. Llenas observed that there “was Friends Council on Education not a single leaf left on a tree, and this is not In her remarks, Rosselló thanked Islamic Schools League of America a metaphor, after the hurricane.” It’s been Education Secretary Betsy DeVos for “her Jesuit Schools Network reported that 175,000 people left the island continuous support for the education system Lutheran Church–Missouri Synod in the days and weeks after the storm. in Puerto Rico.” Llenas pointed out that that Governor She went on to say that “school choice National Association of Episcopal Schools Rosselló is the son of a former governor of ensures all children have the opportunity to Puerto Rico (Pedro Rosselló), who tried years National Association of learn and put their education in the hands of Independent Schools ago to pass school all parents instead National Catholic choice legislation. of the state.” Educational Association Where Rosselló père Additionally, “the National Christian School fell short, however, education of our Association Rosselló fils achieved youth and the Office for Lasallian Education success, “against all preservation of a Oral Roberts University odds,” according school system that Educational Fellowship to Llenas. In best fits the needs Seventh-day Adventist 2018, Puerto Rico of the island is Board of Education approved education essential for the United States Conference of legislation, signed by future.” Catholic Bishops Governor Rosselló, Rosselló Beatriz Rosselló, the First lady of Puerto Rico, speaks at Wisconsin Evangelical Lutheran that included a new AFC’s National Policy Summit May 1 in Chicago, IL declared that “the Synod Schools voucher program. (AFC photo) development of Affiliated State Organizations all our students is a coalition of national associations School Choice in what will ensure that the new Puerto Rico serving private schools K-12 Puerto Rico will rise.” Executive Director: Other speakers at the summit included According to the EdChoice website, the Michael Schuttloffel Secretary DeVos, who laid out the case for the voucher program in Puerto Rico “is scheduled proposed Education Freedom Scholarships; Outlook is published monthly to launch for the 2019–20 school year. The Father Gregory Boyle, a Catholic priest who (September to June) by CAPE. program allows students who have been An annual subscription is $35. founded Homeboy Industries, the largest enrolled in either traditional public or charter ISSN 0271-145 gang-intervention, rehabilitation, and re-entry schools for at least two years to use vouchers program in the world; school choice advocate 1300 Pennsylvania Ave, NW to attend the private or public school of and legend Virginia Walden Ford; and Tim their choice.” In addition, “The department #190-433 Keller, an attorney who leads the Institute of education will prioritize vouchers for Washington, DC 20004 for Justice’s Educational Choice Team. Next low-income families, students with severe Tel: 844-883-CAPE year’s summit will be May 18-19, 2020, in disabilities, gifted students, students who (email) [email protected] Milwaukee, WI. www.capenet.org have been adopted or are in shelters or foster homes, and victims of bullying or sexual      

StateUpdate DOJ Weighs in on Maine Case Illinois 4.6%. Parental Choice Schools outperform public The US Department of Justice Against long odds, school choice advocates schools statewide: proficiency exceeds traditional has announced its support for a proved successful in protecting Illinois’ tax credit public schools by 3.05% in the Racine Parental lawsuit against the Maine law that scholarship program. After opponents, including Choice Program and Wisconsin Parental Choice does not allow parents to access Governor J.B. Pritzker, declared their intention Program schools. Finally, Parental Choice Schools a state tuition program if they to phase out the program, advocates launched a have higher growth than public schools statewide: choose a religious school for their “Save My Scholarship” campaign. During the growth rates exceed that of traditional public children. From a DOJ release: month of May, program supporters unleashed a schools by 6.8 points. “The Department of Justice blitz of nonstop advocacy, maintaining a constant today filed a Statement of Interest presence in the Legislature. Their hard work paid Tennessee in the U.S. District Court for off. According to the Prairie State Wire, One Governor Bill Lee signed Tennessee’s historic the District of Maine supporting Chance Illinois President Myles Mendoza was Education Savings Account (ESA) legislation students who claim that the quoted as saying, “Faced with the threat of an into law. As explained by the Wall Street Journal, State discriminated against them attempt to phase out the tax credit scholarship “Beginning in the 2021-22 school year, the in violation of the Free Exercise program, Empower Illinois, in conjunction with measure will provide debit cards averaging $7,300 Clause of the U.S. Constitution our allies at the Catholic Conference, Agudath each year for low-income families to use for when it barred them from a Israel, and statewide Lutheran, Muslim and education-related expenses. The money can pay program paying the public or secular school leaders, together led an even larger for private-school tuition, textbooks or a tutor, private school tuition of students coalition of parents, grandparents, foster parents, among other things.” The program is capped at who do not have public schools in educators, donors, private trade unions and, most 15,000 students and participation is restricted to their school districts, because the importantly — scholarship recipients to fight Shelby and Davidson counties, home to the state’s students wish to use the tuition back against an effort to end the TCS program two largest cities: Memphis and Nashville. to attend private religious schools that otherwise satisfy State — and they won.” Pennsylvania education requirements. Both chambers of the Pennsylvania Legislature “The case, Carson v. Makin, approved legislation that would raise the cap was brought by students and their on the state’s tax credit scholarship program parents challenging their exclusion from $100 million to $210 million, only to from the Maine tuition program. have it vetoed by Governor Tom Wolf. The bill In Maine, 143 of the State’s 260 also contained an “escalator” that would have school districts do not operate automatically raised the cap by 10% whenever the their own high schools. Such Pennsylvania program reached 90% usage. The school districts may arrange for Capital-Star quoted the governor as saying, “It another school to teach all of their distracts from what we ought to be focusing on, students, or these school districts which is educating every child through our public may provide tuition payments to school system.” allow families to go to the public West Virginia Nebraska school or private school of their The West Virginia Senate has passed legislation School choice advocates again came up short in choice. The State, however, that would allow for Education Savings Accounts Nebraska this year. From the Lincoln Journal Star: forbids students in the tuition (ESA) in the state. According to the American “For the second year in a row, opponents of a bill program to attend ‘sectarian’ Federation for Children, “The Education Savings creating a tax credit for Nebraskans who donate schools. Accounts provision would provide 90% of the to a scholarship fund for private and parochial “‘Under the Constitution, average state per-pupil funding to an Education schools mounted a successful filibuster. Under governments may not exclude Savings Account controlled by most West Virginia the Opportunity Scholarships Act (LB670) from students from education programs families. Those funds can be used on K-12 Sen. Lou Ann Linehan of Elkhorn, individual solely because of their religious educational expenses ranging from tutoring to and corporate taxpayers could receive a credit status or their religious choices,’ private school tuition to special needs therapies, equal to their contribution to a state-approved said Assistant Attorney General among other approved items.” The bill now scholarship granting organization. Taxpayers could Eric Dreiband. ‘The Department heads to the House for consideration. receive credits up to 50 percent of their income of Justice is committed to tax liability each year under Linehan's plan, with ensuring that all children and their Wisconsin the scholarships going toward tuition and fees for families may participate in benefit The Wisconsin Institute for Law & Liberty low-income students who elect to attend a private programs without discrimination issued its third annual “Apples to Apples” study school. Debate crossed the three-hour threshold, based on their faith.’” on the academic performance of Wisconsin’s and LB670 fell off the agenda this year, with See the October 2018 edition schools across sectors. Among the key findings: Linehan promising she would bring the proposal of Outlook for more information On average, Milwaukee’s Parental Choice back in 2020.” on the situation in Maine. Program outperforms Milwaukee Public Schools in math proficiency by 3.9% and in ELA by    Council for American Private Education

1300 Pennsylvania Ave, NW #190-433 Washington, DC 20004

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 In May, the US Department of Education aimed at assessing their knowledge and skill in points out that “Public schools in D.C. spend (USDE) released the list of its 2019 Green understanding technological principles, solving around $28,000 per student each year, while the Ribbon Schools. According to USDE, “Across technology and engineering-related problems, and average private school voucher amount is only the country, 35 schools, 14 districts, and four using technology to communicate and collaborate. around $9,600 per student each year in DC. That postsecondary institutions are being honored for Although overall private school participation means a K-12 education costs around $364,000 their innovative efforts to address the three "Pillars" rates did not meet reporting benchmarks, the for each child in D.C. public schools, but only of the program: reducing environmental impact participation of private schools contributed to about $125,000 for each voucher student.” and utility costs, improving health and wellness, national results, and results for Catholic school  The New York Legislature has voted to and ensuring effective sustainability education.” students were reportable and compared very eliminate religious exemptions for immunizations. "I want to congratulate this year's U.S. favorably to that of public school students. The As reported by the New York Times: “Lawmakers Department of Education Green Ribbon School overall private school participation rate was 45%, in New York, the epicenter of the nation’s honorees," said U.S. Secretary of Education Betsy whereas 70% is needed to report results. The measles outbreak, moved on Thursday to end DeVos. "They have truly embraced the challenge participation rate for Catholic schools was 87%. religious and other nonmedical exemptions for to create healthy, safe, sustainable and efficient Catholic school students had an average immunizations, overcoming vocal opposition learning environments for students, faculty, and score of 167, as opposed to 151 from public from vaccine skeptics and advocates for religious staff. Their innovative approaches to learning will schools. The percentage of Catholic school freedom…The Legislature’s approval would add help students prepare for the opportunities and students who scored at least at a “basic” level New York to a small handful of states that do not challenges of the 21st Century." was 95% (83% for public school students). allow exemptions on religious grounds, including Ten private schools made the list: St. James Sixty-four percent of Catholics school students California, West Virginia, Mississippi and Arizona. Academy, Solana, CA; The Jefferson School, scored at or above “proficient” (45% for public The floor debate on Thursday was unusually Georgetown, DE; Saint Agnes School, Louisville, school students). Seven percent of students from contentious, with lawmakers giving impassioned KY; Interlochen Arts Academy, Interlochen, MI; Catholic schools scored in the “advanced” category speeches weighing health concerns against parental Raintree School, St. Louis, MO; Saint Leo the (4% in public schools). More information on and First Amendment rights.” Governor Andrew Great School, Lincroft, NJ; Immaculata Catholic the TEL assessment can be found at: www. Cuomo immediately signed the bill. School, Durham, NC; State College Friends nationsreportcard.gov/tel.  In July, members of the State Cape Network School, State College, PA; The Northwest School,  The recently released evaluation of the DC (SCN) will be gathering in Jackson, Mississippi Seattle, WA; Schlitz Audubon Nature Preschool, Opportunity Scholarship Program (DCOSP) for their annual Summer Institute. The fine folks Milwaukee, WI. contained some encouraging news. As described at the Mississippi Association of Independent  The results of the NAEP 2018 Technical by Corey DeAngelis in the Washington Examiner, Schools, working with SCN leaders, have an and Engineering Literacy (TEL) assessment “Students that won the voucher lottery to attend outstanding agenda set that will undoubtedly were released on April 30. This is a nationally a private school were 34% more likely to report prepare the assembled education leaders for representative assessment of technology and being in a very safe school than their peers in another year in the trenches supporting the work engineering literacy. Eighth-grade students public schools.” Moreover, “The DC voucher of private schools. were presented with real-world scenarios program also increased students’ satisfaction with involving technology and engineering challenges. their schools by 18% and decreased chronic Students were asked to respond to questions absenteeism by 27% after three years.” DeAngelis

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