Hat Trick of Advocacy Coalition Letters

This week, AASA has signed on to three separate letters related to AASA legislative agenda priorities. These are coalition letters, meaning signed by multiple groups. AASA relies on our member advocacy AND the collaborative approach and strength that comes from advocating in coordination with colleagues in multiple coalitions, from rural education, E-Rate and medicaid, to school nutrition, SALT-D, and IDEA full funding, and many more.

 

• Secure Rural Schools letter: AASA joined dozens of national and state associations in a letter to House and Senate leadership urging action on the Secure Rural Schools and Communities program.
• Raise the Caps letter: AASA joined more than 80 other education organizations urging congressional leaders to raise the budget caps on federal spending.
• Americans Against Double Taxation letter: AASA joined more than 20 other organizations in a letter to the Senate, opposing the Tax Cuts & Jobs Act.

 

AASA Opposes Senate Tax Cuts & Jobs Act

AASA opposes the Tax Cuts & Jobs act being considered by the Senate this week. Read our full letter.

Bond Reform: Another Dire Threat to Public Schools in the GOP’s Tax Plan

Today's guest blog comes from ASBO International Executive Director, John Musso. 

As Congress moves forward with efforts to pass H.R. 1, the “Tax Cuts and Jobs Act,” many education groups, including ASBO International, have cited concerns about Republicans’ tax proposals.

The House and Senate proposals include provisions to shrink or repeal the state and local tax (SALT) deduction; divert public funding to private and religious schools via college 529 savings accounts; and eliminate tax deductions for school supplies and student loan interest payments. While these issues would devastate school funding, teachers’ jobs, taxpayers’ wallets, and student learning—they only tell half the story.

If you asked your school district’s CFO, treasurer, or school business official (SBO) what they think is the biggest problem with Republicans’ tax plan, they’d probably say, "bonds.”

Both versions of H.R. 1 would reform how state and local governments, including school districts, can issue tax-exempt bonds to refinance debt. Specifically, they would prohibit school districts from issuing tax-exempt “advance refunding bonds” (ARBs). ARBs are a cost-effective way for districts to refinance high-interest debt at lower-interest rates, potentially saving hundreds of thousands of taxpayers’ dollars in lower debt payments. Karen Smith, Assistant Superintendent of Business and Financial Services at Cypress-Fairbanks Independent School District, TX, tells us she has overseen multiple advance refundings that “saved taxpayers millions in interest.”

While refinancing school district debt is more complicated than taking out a low-interest loan to pay off higher-interest debt or refinancing a mortgage, refunding bonds effectively serve the same purpose. School districts have two options when issuing tax-exempt bonds for debt refinancing: current refunding bonds (CRBs) or advance refunding bonds (ARBs).

Both options allow districts to pay off high-interest outstanding bonds with a newer-issued bond that leverages falling market interest rates. The main difference is when a district can issue them. CRBs can be issued within 90 days of the outstanding bond’s first call provision date. ARBs can be issued even earlier, giving districts more time to take advantage of falling rates to refinance debt; the lower the rate, the more cost savings the district can expect. Without tax-exempt ARBs, districts will have less flexibility to refinance debt and reallocate funds from debt obligations to what matters most—students.  

If passed, H.R. 1 will allow districts to continue issuing tax-exempt CRBs, but not tax-exempt ARBs, effective December 31. Sharie Lewis, Director of Business Services and Operations at Parkrose School District, OR, says the sudden cutoff for using this critical financing option will put her district “in a huge bind.” Refinancing is a lengthy process requiring extensive discussion between SBOs, school boards, and other stakeholders. It isn’t a decision to make lightly, and requires careful consideration of the pros and cons. Implementing a cutoff date so soon will force districts with outstanding debt to accelerate their refinancing decisions (and risk moving forward with incomplete information), or forego refinancing at taxpayer expense. Jim English, Associate Superintendent for Business Services at West Ottawa Public Schools, MI, says the district is “working on refinancing some of its bonds to save local taxpayers $500,000,” but won’t be able to do so if the tax plan becomes law.

Any tax policy that reduces local school funding, increases tax burdens on taxpayers, and revokes critical tools districts rely on to manage debt and reinvest in student learning does a disservice to our nation’s children, parents, and communities. However, there is still time to advocate on this issue; find everything you need to communicate with your representatives here.  

John Musso is the Executive Director of the Association of School Business Officials International (ASBO). Founded in 1910, ASBO International is a nonprofit organization that, through its members and affiliates, represents approximately 30,000 school business professionals worldwide. Learn more at asbointl.org. This blog was cross-posted with permission and originally appeared at asbointl.org/Network. Education Week published an article based on this blog, available here.

AASA Proud to Support Operation Prevention

In October, Discovery Education announced a collaboration with the Drug Enforcement Administration and Milken Institute to announce a Drug Prevention Call to Action. Part of the announcement included referencing AASA's commitment to the pledge, and we look forward to working with Discovery on this effort.

AASA is pleased to support Operation Prevention to combat a growing epidemic of prescription opioid misuse and heroin use nationwide. Operation Prevention's mission is to educate students about the true impacts of opioids and kick-start lifesaving conversations in the home and classroom. In addition to the resources listed on the website, you can also access their PDF flyer.

AASA Statement on House Vote on Tax Cuts & Jobs Act (HR 1)

AASA Executive Director Daniel A. Domenech released the following statement in response the House passage of HR 1, The Tax Cuts and Jobs Act by a vote of 227-205:

"AASA is deeply disappointed in the largely partisan vote in the House today. We know the intricacies involved in any legislative vote, and the pressures unique to a tax conversation. Like any budget or funding conversation, tax conversations are filled with tough decisions. The combination of these tough decisions, however, is a clear indication of the deciding body’s priorities, and today’s vote demonstrates that for 227 members of the House, they have little to no understanding of, or concern for, its impact on public schools. Congress must both know and do better, and ensure that any tax reform plan is supportive of public education. We remain optimistic that this is just the first step in a long process and that subsequent steps will be more deliberate, more transparent, and premised on passing common sense tax policy that works for our country, its people, and its public schools."

New Report Identifies How Congress Can Better Serve Rural Students

AASA and The Rural School and Community Trust's new partnership is already paying off for school leaders, with the release of the report, Leveling the Playing Field for Rural Students, which identifies how Congress can provide leadership and support to ensure students living in rural America receive a quality education and succeed in life beyond high school. 

Highlights from the report include five education policy recommendations that can be implemented immediately and will benefit the one in six children living in rural communities: 

• Enabling Access to New, High-Quality Educational Opportunities;
• Addressing Health Barriers to Learning;
• Leveraging Career and Technical Programs for Economic Growth;
• Ending Insecurity for Rural Children;
• Adequately Investing in Rural Schools.

AASA is extremely excited about our new partnership with the Rural School and Community Trust and is looking forward to more collaboration on behalf of rural schools and the students they serve.

Read the full report, here.

AASA Opposes Tax Cuts and Jobs Act (HR1)

AASA sent a letter to the House of Representatives outlining our strong opposition to the Tax Cuts and Jobs Act (HR1). 

AASA represents public school superintendents, and we are concerned that this bill--as currently drafted--shows little to no regard for the impact of its confluence of changes on our nation's public schools, on the ability of state and local governments' ability to adequately support public infrastructure (including schools), on the reliance of deficit financing to pay for the tax cuts and the impact if will have on federal appropriations, and more. We are not opposed to tax reform as a whole, but believe the House can and must do better to ensure this bill/proposal is bipartisan, deliberate, and transparent, and not rushed through for the sake of compliance with arbitrary timelines. We will continue to monitor the broader tax reform effort for its myriad impacts on public education--both long and short term--and are deeply concerned that the bill being considered this week falls short of this threshold. Read our full letter, and key excerpts are below. As a reminder, earlier this week we led a letter with 42 other national education groups opposing the House and Senate tax bill.

“On behalf of AASA, The School Superintendents Association, representing more than 13,000 public school superintendents across the country, I write to express our opposition to the Tax Cuts and Jobs Act (H.R. 1). We sent a similar letter to the Ways & Means Committee earlier this month and were disappointed to see zero improvements as it relates to the tax bill and its impact on public schools. Our opposition is not to tax reform in whole; rather, it is to specific provisions within the broader proposal that undermine and threaten our nation’s public school system and the students and communities they serve. 

"We urge Congress to rewrite the plan to preserve the state and local tax deduction, to eliminate the proposed expansion of 529 accounts, to protect and preserve Qualified Zone Academy Bonds, and to ensure that in paying for its tax reform, the bill does not negatively or disproportionately impact non-defense discretionary funding, which provides for education. We are keenly aware that any tax conversation, like any budget or funding conversation, it filled with tough decisions. The combination of these tough decisions, however, is a clear indication of the deciding body’s priorities, and in this instance, there is no indication that this tax plan and those planning to vote for it have an understanding of, or care about, its impact on public schools. Congress must both know and do better, and ensure that any tax reform plan is supportive of public education. Specific to the proposal, our concerns fall in four categories: state and local tax deduction (SALT-D), specific education tax provisions (529 accounts), preserving QZABs, and how pay-fors in the deal will impact education funding.

"As we wrote in our initial response to the proposal, “We reiterate the importance of Congress ensuring the process of tax reform is deliberate and transparent, and not rushed through for the sake of compliance with arbitrary timelines. We will continue to monitor the broader tax reform effort for its myriad impacts on public education—both long and short term—and we are concerned that the proposal released today ties the hands of state and local governments to support their communities, promotes the privatization of education funding, and attacks, rather than supports, public education in our nation.” We urge the House to slow its effort to ensure a product that has solid policy footing and broad, bipartisan support. We are deeply committed to ensuring students get the best possible education and support, and the elements of the plan being considered today fall far short of this basic expectation. Congress can—and must—do better. For these reasons, we are opposed to the legislation being considered this week.”

CALL-TO-ACTION: Tell House and Senate to VOTE NO to Tax Reform that Guts Support for Public Education

 Both the House and Senate are considering comprehensive tax reform proposals. The House will vote as early as Thursday November 16th! AASA has reviewed both bills and is opposed to specific provisions which undermine federal support for public education and will negatively impact state and local funding for public schools. To that end, we have a two-prong call to action:

1. Call the Congressional Switch board (202) 224-3121 and ask to be transferred to your Senators/Representative. The person who answers is taking a tally of votes for and against, and the script you can read is below.
2. Email the education staffer and legislative director for each of your Congressional delegation. It can even be one email! You want to send this email to the people in the office who are handling/tracking the policy specifics.

PHONE SCRIPT  

HOUSE

Hello! My name is [___] and I’m the superintendent in xxxx District in his district. I’m calling to let Congressman ______ know that I strongly oppose the Tax Cuts and Jobs Act because of the devastating impact it will have on my students and community.

 My opposition to the tax reform is driven by two specific provisions which will negatively impact our nation’s public schools. 

 First, this legislation would incentivize upper-middle-class and wealthy Americans to educate their children in private schools by providing them with a tax break as they can now utilize 529 accounts for private k12 education. These drastic changes would enable anyone, regardless of their wealth, to put aside significantly more dollars for use at private schools, at a greater expense to taxpayers and schools. 

Second, I am also deeply concerned by changes to the State and Local Tax Deduction. Eliminating SALT will hurt more than 43 million taxpayers from all 50 states and across all income brackets, it also will hurt the ability of state and local governments, including my school district, to fund essential services such as public education. State and local funding accounts for about 90 percent of funding for K-12 schools, meaning that any reduction in state revenue—which will likely happen when any state or local tax is perceived as a double tax when it cannot be deducted—will almost certainly lead to cuts in public education.  Over time, it is likely that a change in this tax provision would erode funding for education at a level deep enough to mirror a direct cut in federal, state and/or local funding. 

 I urge Representative ______ to oppose this bill, which has the potential to decimate education funding for our state. 

 SENATE

Hello! My name is [___] and I’m the superintendent in xxxx District which is located in xx part of state. I’m calling to let Senator _______  know that I strongly oppose the Tax Cuts and Jobs Act because of the devastating impact it will have on my students and community.

 My opposition to the tax reform is driven by two provisions which will negatively impact our nation’s public schools.

First, I am also deeply concerned by changes to the State and Local Tax Deduction. Eliminating SALT will hurt more than 43 million taxpayers from all 50 states and across all income brackets, it also will hurt the ability of state and local governments, including my school district, to fund essential services such as public education. State and local funding accounts for about 90 percent of funding for K-12 schools, meaning that any reduction in state revenue—which will likely happen when any state or local tax is perceived as a double tax when it cannot be deducted—will almost certainly lead to cuts in public education.  Over time, it is likely that a change in this tax provision would erode funding for education at a level deep enough to mirror a direct cut in federal, state and/or local funding. 

 Second, I voice my strong opposition to the inclusion of any provisions that that create a federal voucher program or provide tax incentives for families that send their children to private school have no place in this legislation. Given current levels of public education funding we cannot divert revenues to support away from the school system that educates 90% of American children.

I urge Senator ______ to oppose this bill, which has the potential to decimate education funding for our state. 

 EMAIL TEXT

• Do you need the name and email address of the education staffer and legislative director for anyone in your Congressional delegation? Let us know, or email your state association director. We gave them the full set of contact information.
• Use the text below as the basis of your email, and feel free to personalize with details about your district or specifics on what the tax policy ramifications will mean for your state and district

SAMPLE HOUSE EMAIL 

Dear {INSERT NAME},

My name is [___] and I’m the superintendent in xxxx District in his district. I’m emailing to let Representative ______ know that I strongly oppose the Tax Cuts and Jobs Act because of the devastating impact it will have on my students and community.

My opposition to the tax reform is driven by two specific provisions which will negatively impact our nation’s public schools. 

 First, this legislation would incentivize upper-middle-class and wealthy Americans to educate their children in private schools by providing them with a tax break as they can now utilize 529 accounts for private k12 education. These drastic changes would enable anyone, regardless of their wealth, to put aside significantly more dollars for use at private schools, at a greater expense to taxpayers and schools. 

Second, I am also deeply concerned by changes to the State and Local Tax Deduction. Eliminating SALT will hurt more than 43 million taxpayers from all 50 states and across all income brackets, it also will hurt the ability of state and local governments, including my school district, to fund essential services such as public education. State and local funding accounts for about 90 percent of funding for K-12 schools, meaning that any reduction in state revenue—which will likely happen when any state or local tax is perceived as a double tax when it cannot be deducted—will almost certainly lead to cuts in public education.  Over time, it is likely that a change in this tax provision would erode funding for education at a level deep enough to mirror a direct cut in federal, state and/or local funding. 

I urge Representative ______ to oppose this bill, which has the potential to decimate education funding for our state. 

SENATE

Dear {INSERT NAME},

My name is [___] and I’m the superintendent in xxxx District which is located in xx part of state. I’m emailing to let Senator _______  know that I strongly oppose the Tax Cuts and Jobs Act because of the devastating impact it will have on my students and community. 

First, I am also deeply concerned by changes to the State and Local Tax Deduction. Eliminating SALT will hurt more than 43 million taxpayers from all 50 states and across all income brackets, it also will hurt the ability of state and local governments, including my school district, to fund essential services such as public education. State and local funding accounts for about 90 percent of funding for K-12 schools, meaning that any reduction in state revenue—which will likely happen when any state or local tax is perceived as a double tax when it cannot be deducted—will almost certainly lead to cuts in public education.  Over time, it is likely that a change in this tax provision would erode funding for education at a level deep enough to mirror a direct cut in federal, state and/or local funding. 

Second, I voice my strong opposition to the inclusion of any provisions that that create a federal voucher program or provide tax incentives for families that send their children to private school have no place in this legislation. Given current levels of public education funding we cannot divert revenues to support away from the school system that educates 90% of American children. 

 I urge Senator ______ to oppose this bill, which has the potential to decimate education funding for our state.

 

 

School Kitchen Equipment Grant Threshold

The House Agriculture Appropriations bill included language lowering the threshold for USDA School Kitchen Equipment Grant purchases to $1,000, down from the current $5,000 requirement. AASA signed onto a letter to thank the committee for this change and to encourage the inclusion of the language in the final spending bill. This change will allow more flexibility to schools and will allow more schools and districts to take advantage of these grants for smaller but still important purchases, such as salad bars and automated slicers, that were previously not accessible through this grant program. 

AASA Responds to DeVos Priorities for Competitive Funding

Earlier this fall, Secretary DeVos announced 11 proposed priorities by which the US Education Department (USED) would award nearly $700 million in funding to schools. 

AASA submitted comments in response to the proposed priorities, outlining our continued opposition to competitive allocation of federal funds, particularly when this administration attempts to prioritize policies it eliminates funding for in annual appropriations. Our comments expressed opposition to the effort to expand and prioritize choice and privatization, and the disconnect on impact for rural schools and communities. 

The Advocate, November 2017

By Leslie Finnan, senior legislative analyst, AASA, The School Superintendents Association

 Early Learning Opportunities in Federal Legislation

While AASA has not historically worked much on early learning issues, we are hearing more superintendents discuss their programs or their desire for more quality early learning opportunities. We are tracking and commenting on several pieces of legislation that could impact early learning throughout the country. Many states have early learning provisions at the state level, but the conversation has also expanded further to the federal level. The Democrats in both the House and the Senate have released a bill, The Child Care for Working Families Act. This bill is intended to be a conversation-starter, since it does not have a chance of moving legislatively given the make-up of the Congress. The bill provides incentives and funding for states to create high-quality early learning programs, increases workforce training and compensation for early learning providers, and increases help for Head Start programs.

On the other side of the aisle, Republicans have approached early learning through increasing the Child Tax Credit. It would increase the annual credit for families with children by up to $600. They say that through this tax credit, families will have money available to spend on early learning and child care. However, the tax credit is only available to families earning enough money to pay enough in taxes to benefit from such a tax credit.

One last way that early learning is being addressed is actually through expanded requirements under ESSA. ESSA allows but does not require Title I funding to be used for early childhood education. Districts that receive Title I funding are required to increase coordination with early childhood programs, regardless of whether they use Title I resources for early childhood programming. States are also required to address early childhood education in their state plans; they must describe how they will assist LEAs and elementary schools that use Title I funds to support early childhood programs. The accountability system must also address the number and percentage of students enrolled in preschool programs.

ESSA establishes the Preschool Development Grants program, which authorizes competitive grant funding for states to improve coordination, quality, and access to early childhood education for low and moderate-income students up to age five. These grants are intended to support statewide needs assessments of availability and quality of existing programs and the numbers of students served and to develop strategic plans to ensure collaboration and coordination to improve quality and access in early education programs.

Under the Literacy Education for All program, states may provide targeted sub grants to early childhood education programs and LEAs to implement evidence-based literacy programs.

Under the Expanding Opportunity through Charter Schools Program, ESSA includes early education as an allowable use. These funds may be used to support charter schools that serve early childhood students.

We are partnering with the National Head Start Association, the Council of Chief State School Officers, and other education associations to develop and promote a toolkit for state and district leaders to understand the new early learning components of ESSA. The toolkit will be made available by the end of November, so be sure to watch for it. I am the lead on early learning policy for AASA, so if you have any thoughts or questions, please contact me (Leslie) at lfinnan@aasa.org.

The Advocate, November 2017

By Leslie Finnan, senior legislative analyst, AASA

Early Learning Opportunities in Federal Legislation

While AASA has not historically worked much on early learning issues, we are hearing more superintendents discuss their programs or their desire for more quality early learning opportunities. We are tracking and commenting on several pieces of legislation that could impact early learning throughout the country. Many states have early learning provisions at the state level, but the conversation has also expanded further to the federal level. The Democrats in both the House and the Senate have released a bill, The Child Care for Working Families Act. This bill is intended to be a conversation-starter, since it does not have a chance of moving legislatively given the make-up of the Congress. The bill provides incentives and funding for states to create high-quality early learning programs, increases workforce training and compensation for early learning providers, and increases help for Head Start programs.

On the other side of the aisle, Republicans have approached early learning through increasing the Child Tax Credit. It would increase the annual credit for families with children by up to $600. They say that through this tax credit, families will have money available to spend on early learning and child care. However, the tax credit is only available to families earning enough money to pay enough in taxes to benefit from such a tax credit.

One last way that early learning is being addressed is actually through expanded requirements under ESSA. ESSA allows but does not require Title I funding to be used for early childhood education. Districts that receive Title I funding are required to increase coordination with early childhood programs, regardless of whether they use Title I resources for early childhood programming. States are also required to address early childhood education in their state plans; they must describe how they will assist LEAs and elementary schools that use Title I funds to support early childhood programs. The accountability system must also address the number and percentage of students enrolled in preschool programs.

ESSA establishes the Preschool Development Grants program, which authorizes competitive grant funding for states to improve coordination, quality, and access to early childhood education for low and moderate-income students up to age five. These grants are intended to support statewide needs assessments of availability and quality of existing programs and the numbers of students served and to develop strategic plans to ensure collaboration and coordination to improve quality and access in early education programs.

Under the Literacy Education for All program, states may provide targeted sub grants to early childhood education programs and LEAs to implement evidence-based literacy programs.

Under the Expanding Opportunity through Charter Schools Program, ESSA includes early education as an allowable use. These funds may be used to support charter schools that serve early childhood students.

We are partnering with the National Head Start Association, the Council of Chief State School Officers, and other education associations to develop and promote a toolkit for state and district leaders to understand the new early learning components of ESSA. The toolkit will be made available by the end of November, so be sure to watch for it. 

AASA, AFT Lead 41 Orgs in Joint Letter Opposing House and Senate Tax Plans

AASA partnered with AFT and 41 other national organizations in two joint letters--one each to the House and the Senate--opposing the tax reform bills.

We write "...to express our opposition to the tax bills currently being considered in Congress that are based on the White House and congressional Republicans’ “Unified Framework for Fixing Our Broken Tax Code.” These proposals would undermine funding for our public schools, colleges and universities."

You can read the full letter here.

AASA Files Comments in Response to Proposed Changes to E-Rate

Last month, AASA issued a call to action to superintendents, urging them to respond to a set of proposed changes to the E-Rate program by the FCC. The FCC is considering a policy change which would deeply cut--if not eliminate--it support for Category 2 (internal connections) within the E-Rate program. Adopted as part of the 2014 modernization, this is a premature policy consider that would undermine the intent of the 2014 vote and threaten the ability of schools and libraries to access and afford high speed connectivity in their classrooms. To that end, AASA provided a template response, and more than 400 educators from schools and libraries across the country. 

You can read AASA's formal comments here.

AASA Applauds Introduction of Public Funds for Public Schools Act

Last spring, AASA and the Institute on Taxation and Economic Policy released a scathing report called Public Loss, Private Gain: How School Voucher Tax Shelters Undermine Public Education where we described how taxpayers in nine states are able to profit from their donations to private school voucher programs. In our report, we recommended Congress introduce legislation to close this voucher tax shelter that diverts millions of dollars away from federal coffers and back into voucher proponents’ pockets.

We are excited to share that Rep. Terri Sewell (D-AL) has introduced legislation to close the voucher tax shelter. AASA, along with 33 national education, civil rights, religious and disability organizations sent a letter in support her bill called the Public Funds for Public Schools Act (H.R. 4269). Already it has garnered three additional co-sponsors. Alabama is one of the nine states where wealthy taxpayers have a financial incentive to support private school voucher programs because they are able to take a federal deduction on a donation for which they also received a dollar-for-dollar tax credit. This enables them to avoid paying federal taxes on a “charitable contribution” that costs them nothing thereby allowing them to pay less in taxes.  

Sewell sits on the powerful House Ways and Means Committee and she spoke about her bill during the Committee’s mark-up of the tax bill. Her staff also put together a great one-pager on the bill that you can read here.  

AASA Opposes Tax Cuts & Jobs Act, Recommends Improvements

In advance of today's markup of the Tax Cuts and Jobs Act, AASA sent a letter to the House Ways & Means committee to express our opposition to the bill as currently drafted and to recommend improvement. We are deeply committed to ensuring students get the best possible education and support, and the elements of the plan being considered today fall far short of this basic expectation. Specific to the proposal, our concerns fall in three categories: state and local tax deduction (SALT-D), specific education tax provisions (529 accounts) and how pay-fors in the deal will impact education funding. Additional detail can be found in the attached letter. 

 

• State and Local Tax Deduction (SALT-D): As one of the six original deductions allowed under the original tax code, SALT-D has a long history and is a critical support for investments in infrastructure, public safety, homeownership and, specific to our work, our nation's public schools. SALT-D prevents double taxation for local residents and reduced the pressure tax payers feel/face when it comes to paying state and local taxes, which represent the lion's share of public education funding. Elimination of this deduction--even the partial elimination in the proposal--would increase tax rates for certain tax payers, reduce disposable income, limit ability and support for local taxes, and damage local, state and national economies. State and local funding accounts for approximately 90% of funding for K12 schools. Reduction of state and local revenues--an all but certain reality under this tax plan--would mean certain cuts to public education. We remain opposed to any changes to the original SALT deduction and urge the Committee to ensure that any comprehensive tax reform must preserve the SALT deduction as a matter of national priority.
• Privatization and Vouchers: The bill expands 529 accounts to be used for private K-12 educational expenses of up to $10,000. This is a major change from current tax policy where Coverdell accounts, which are income-restricted, were the only tax-free account available to parents for private school expenses. The new bill will enable very wealthy Americans to set aside money for private school expenses furthering the appeal for them to educate their children in private schools. This is a foot-in-the-door approach to vouchers and the revenues that stand to be lost under this 'benefit' would be far more efficiently and effectively invested to support public schools, via federal formula programs like Title I and IDEA, programs driven by equity and working to support teachers and education personnel, to reduce class size, to support instruction and more. AASA is opposed to this expansion of 529 policy and urges the Committee to strike the revision. 
• Tax Plan Pay For: AASA urges the Committee to ensure that any tax reform act prudently to ensure that tax reform is paid for--not adding to the federal debt--and that in looking for pay-fors, work to preserve parity between defense and non-defense discretionary funding. AASA is concerned that should a tax plan that is deficit-financed move forward, Congress will feel pressure to make cuts elsewhere, and that those cuts will fall to education and non-defense discretionary spending. Congress already struggles to avoid deep cuts to important education programs as they work to comply with existing federal funding caps and constraints; a debt-financed tax reform would only exacerbate this tension and the depth of cuts to important education programs.

We reiterate the importance of Congress ensuring the process of tax reform is deliberate and transparent, and not rushed through for the sake of compliance with arbitrary timelines. We will continue to monitor the broader tax reform effort for its myriad impacts on public education--both long and short term--and we are concerned that the proposal released today ties the hands of state and local governments to support their communities, promotes the privatization of education funding, and attacks, rather than supports, public education in our nation.

 

AASA Signs Amicus Brief in South Dakota vs Wayfair

While AASA does not maintain counsel, we do from time to time engage in the Supreme Court process when a pending case has implications for public schools. Last term, we filed in the Endrew Case, related to special education. We just recently signed onto an amicus brief (from 'amicus curiae', which means 'friend of the court'), a process by which someone who is not a party to the case can provide information or context that bears on the case. A summary of the most recent amicus brief is below, written by Lisa Soronen, of the State & Local Legal Center. Her organization led the effort, which was also supported by the National School Boards Association and the National Association of Elementary School Principals, among others.

State and Local Legal Center Asks Supreme Court to Accept Sales Tax Case 

The State and Local Legal Center (SLLC) has filed an amicus brief asking the Supreme Court to agree to hear South Dakota’s petition in South Dakota v. Wayfair. In this case South Dakota is asking the Supreme Court to hold that states may require out-of-state retailers to collect sales tax. 

In Quill Corp. v. North Dakota (1992), the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax.

In March 2015 Justice Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this Court to reexamine Quill.” Justice Kennedy criticized Quill in Direct Marketing Association v. Brohl for many of the same reasons the SLLC stated in its amicus brief in that case. Specifically, internet sales have risen astronomically since 1992 and states and local governments are unable to collect most taxes due on sales from out-of-state vendors. 

Following the Kennedy opinion a number of state legislatures passed laws requiring remote vendors to collect sales tax. South Dakota’s law is the first to be ready for review by the Supreme Court. In September South Dakota’s highest state court ruled that the South Dakota law is unconstitutional because it clearly violates Quill and it is up to the Supreme Court to overrule it. In October South Dakota filed a certiorari petition asking the Supreme Court to hear its case and overrule Quill.   

The SLLC amicus brief makes two main points. First, it explains why this is the right case for the Court to take. In recent years numerous cases (and state laws) have challenged Quill at the margins. This case directly asks the Court to decide whether to overturn Quill without any distractions like factual issues. Second, now is the right time for the Court to consider overturning Quill because states and local governments are failing to collect billions of dollars in tax revenue annually at an increasing rate due to rising online sales.

The brief cites a study by the National Conference of State Legislatures and the International Council of Shopping Centers which estimated that in 2015, uncollected sales taxes from remote sales were almost $26 billion. Of this $26 billion, over $17 billion uncollected taxes were projected to be from electronic sales.    

At this point all South Dakota and its amici, including the SLLC, are asking the Supreme Court to do is agree to hear this case. Supreme Court review is discretionary; four of the nine Supreme Court Justices must agree to hear any case. If the Supreme Court refuses to do so, the South Dakota Supreme Court ruling that South Dakota’s law is unconstitutional will stay in place.  possible the Court could hear this case this term meaning it would issue an opinion by the end of June 2018.    

Save SALTD: Support Public Education

Tomorrow, the House is expected to unveil the details of the anticipated tax reform package. As mentioned previously in the blog (and in an AASA press release), it is likely the proposal will include the elimination of the state and local tax deduction (SALT-D). Last week, AASAs joined 4 other national organizations in a joint statement expressing our continued opposition to any elimination of SALT-D. 

AASA is opposed to the elimination of SALT-D, and it is our single biggest item of engagement in the overall tax reform package. We believe any comprehensive tax reform legislation must preserve this deduction. As one of the six original deductions allowed under the original tax code, SALT-D has a long history and is a critical support for investments in infrastructure, public safety, homeownership and, specific to our work, our nation’s public schools. SALT-D prevents double taxation for local residents and reduced the pressure tax payers feel/face when it comes to paying state and local taxes, which represent the lion’s share of public education funding. Elimination of this deduction would increase tax rates for certain tax payers, reduce disposable income, limit ability and support for local taxes, and damage local, state and national economies. 

What can you do? Make sure your delegation understands what SALT-D means to your community. Here is a pretty comprehensive set of resources for you to draw on:

AASA Talking Points (from the call to action)  

• We stand firmly for the preservation of the full deduction for state and local taxes, and urge you speak out in favor of SALT and vote against any tax reform plan that eliminates, restricts or modifies this deduction.
• SALT has been a fixture of the federal tax code and our nation’s fiscal federalism for more than 100 years to guard against double taxation of households and protect the fiscal integrity of state and local governments, and it should remain in the tax code without limitation.  
• Any limitations, restrictions or changes to SALT would undermine these fundamental principles of our federalism and create a slippery slope that would subject SALT to continued erosion whenever Washington needs more money – at the expense of 44 million middle class households and homeowners who now claim this deduction. 
• The elimination of SALT is one of the largest sources of revenue in the “Big Six” tax plan, estimated at $1.3 trillion dollars taken from 44 million households.  Thus, any compromise and anything less than preserving the full deduction, is sure to cause millions of taxpayers to pay higher taxes, undermine funding for state and local government and the services they support, and possibly cause home values to decline as well.  
• Targets: Calls to any Members of Congress are helpful. Please don’t be shy; more calls are better than fewer. We can’t overdo it. We need to mobilize. The phone number for the Congressional switchboard is (202) 224-3121. If you need contact information for your Congressional delegation, let us know. Thanks so much.

AASA Memo: Education and Tax Reform  

• Over the summer, I worked with a colleague form AFT to better understand the myriad ways that tax reform--SALT-D and other areas--could impact schools. That learning/research is summarized in this memo.

Americans Against Double Taxation: This is the coalition we are active in. They have rich resources. 

• Calculator: How would the elimination of SALT-D impact the average homeowner in YOUR zip code and zip codes in your school district? THIS calculator will tell you. 
• Congressional District Impact: What does it mean for tax payers in your Congressional district? This report has the numbers