Iowa House education bill could delay state income tax cuts

DES MOINES - The Iowa House approved a sweeping education policy bill Thursday that, if it becomes law, could have a $12 million impact and delay state income tax cuts previously adopted by lawmakers.

House File 847 would expand the Tuition and Textbook Tax Credit by doubling the allowed expense to $2,000 for each qualified student and extending the credit to home-schooled students.

It was approved 62-33 - with five Democrats, including House Minority Leader Todd Prichard, D-Charles City - joining Republicans.

It now goes to the Iowa Senate, which had passed Gov. Kim Reynolds' 'Students First” proposal as Senate File 159. That bill would establish publicly paid scholarships for certain students attending non-public schools, modify charter school programs and open enrollment laws and increase the tuition tax credit, as well as make other provisions.

The House has pulled that bill apart and is passing it in pieces. For example, shortly before 1 a.m. Thursday, the House voted largely along party lines to approve the charter school changes.

Current Iowa law allows taxpayers to claim a non-refundable tax credit equal to 25 percent of up to $1,000 in qualified school expenses paid by a taxpayer for each dependent attending an accredited K-12 public or non-public school.

In addition to doubling the tax credit, HF 847 extends eligibility to include students in home schooling and other non-accredited options.

Those changes would account for $11.1 million of the impact.

The nonpartisan Legislative Services Agency told lawmakers that HF 847 would be a 'significant” change to Iowa's individual income tax system once two general fund revenue 'triggers” the Legislature had included in its 2018 tax cut package are met.

The fiscal year beginning June 1 is the first year the triggers could be met. Once they are met, the individual income tax would be reduced by roughly $300 million a year, the agency said.

Since HF 847 is projected to reduce general fund revenue, 'the bill's changes will significantly reduce the probability of achieving both revenue triggers,” the fiscal analysts said. As a result, those envisioned tax cuts could be delayed.

However, Senate Republicans have proposed changes they say would provide tax relief more quickly - by eliminating those triggers.

Bill manager Rep. Holly Brink, R-Oskaloosa, described the bill as promoting school innovation to enhance learning through STEM - science, technology, engineering and math - and workplace learning.

'Education is a priority,” she said. 'We need to continue to evaluate the processes and the systems to ensure we are doing the best we can.”

The House had several opportunities to do that - make a difference in students' education, the quality of instruction they receive, their learning environment and mental health issues they might have, said Rep. Cindy Winckler, D-Davenport.

'But we haven't done any of those things and this doesn't do it either,” she said.

'A quality education is a gateway to success into adulthood,” she said. 'We are so concerned about changing everything that might be taught in their buildings instead of meeting their needs and directing the education to an opportunity to experience true learning. We fall short.”

The bill also called for the state Department of Education to establish a Flexible Student and School Support program to implement evidence-based practices in innovative ways to enhance student learning, well-being and postsecondary success. The flexibility would grant exemptions to school districts from various regulations, such as the school start date and the requirement they offer 1,080 hours or 180 days of instruction.

It also included a number of sports-related provisions, such as eligibility to participate in extracurricular activities after transferring from one school to another.

The bill also includes changes to open enrollment as it applies to eligibility for participation in extracurricular activities, preschool special education and 'good cause” transfers.

Comments: (319) 398-8375; james.lynch@thegazette.com