A bill authorizing state tax credits for donations to organizations granting scholarships to students attending private schools, LB 753, threatens the sustainability of funding for public education in Nebraska.

The Legislature passed LB 753 on Wednesday. OpenSky has opposed the bill and previous versions of proposed school voucher measures which forfeit state tax revenue to support private schools and benefit wealthy taxpayers.

Under LB 753, tax credits to individuals and corporations in Nebraska would be capped at $25 million for three years but could grow to $100 million, or about one-tenth of the state’s current annual General Fund appropriation to public schools.

The Institute of Taxation and Economic Policy said in Arizona, Louisiana and Virginia, states that have passed similar measures, more than half of all scholarship tax credits are flowing to families with annual incomes over $200,000.

LB 753 gives beneficial treatment to private school scholarship donations compared to gifts to public school foundations, cancer charities and churches. When someone donates $10,000 toward a private school scholarship and receives a $10,000 state tax credit in return, the result is tax dollars being rerouted to private education.

In rural Nebraska, these credits could take from funding that pays the teachers who are an important part of the workforce. Private schools operate in only seven of 38 counties west of Kearney.

OpenSky will join with Support Our Schools Nebraska, a coalition led by the Nebraska State Education Association, in an effort to give voters the chance to weigh in on LB 753 on the 2024 ballot. More information at supportourschoolsnebraska.org.