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  • 2017-12-05 (xsd:date)
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  • Does the 2017 Tax Reform Bill Help Private Schools and Hurt Public Schools? (en)
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  • Changes proposed in the 2017 tax reform bill working its way through Congress will have palpable repercussions in many areas of American life, including education. The combined effects of a pair of controversial provisions impacting the funding of public and private schools take center stage in a widely shared meme on social media: It's a bit hyperbolic to characterize it as defunding public schools, but the post is accurate in stating that the bill (both the House and Senate versions of it) would eliminate existing deductions for state and local taxes (except for a $10,000-or-less property tax deduction) while granting tax breaks to families who homeschool or send their children to private schools. Repealing the state and local tax (SALT) deduction, which has been integral to the federal tax code since 1913, would have adverse impact on public schools, critics say, because it would lead to reductions in the state and local taxes that fund them. The Government Finance Officers Association (an organization of public finance officials) agrees, explaining it this way: According to the Tax Policy Center, the SALT deduction and local tax rates are so interlinked that the former amounts to a federal subsidy: At least one institutional critic of the tax reform legislation, the National Education Association (NEA), projects that eliminating SALT could result in $370 billion in spending cuts for education nationwide over the next ten years, and the loss of as many as 250,000 jobs. A national coalition of education groups issued a strongly worded statement condemning the proposed repeal: Private schools would fare much better. A revision of Section 529 of the existing federal tax code extends the applicability of so-called 529 plans (tax-exempt savings accounts covering higher education expenses) to tuitions for K-12 private and parochial schools, as well as the costs of homeschooling. As illustrated in a December 2017 article in Forbes, the benefits could be significant for well-to-do families who send their children to private schools: For poorer families, however, the 529 extension would do little to make it more feasible for parents to choose private schools (or homeschooling) over public schools — public schools which may, in a few more years, face funding crises brought about by the same legislation. (en)
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