HCS HB 639 -- BETTY L. THOMPSON SCHOLARSHIP PROGRAM AND
EDUCATIONAL TAX CREDITS

SPONSOR:  Hoskins (Cunningham, 86)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Urban Issues by a vote of 8 to 4.

This substitute establishes the Betty L. Thompson Scholarship
Program and authorizes an individual and business tax credit for
tax years beginning January 1, 2005, for contributions to
certified nonprofit educational charitable organizations.  These
charitable organizations will distribute the funds to income
eligible students residing in provisional or unaccredited school
districts on a needs basis as defined in the substitute for
expanded educational opportunities.  These opportunities include
grants to public schools, after-school programs, a second chance
for dropouts to pursue a general education development (GED) or
work program, tutorial assistance for public school students, and
tuition and other educational expense assistance for students to
transfer to a public school for participation in a voluntary
desegregation transfer plan or to a nonpublic school.
Contributions for the educational expenses of the taxpayer's
dependent do not qualify for the credit.

The amount of the credit cannot exceed the tax liability of the
taxpayer, but it can carry forward for up to four years.  The
amount of the tax credit is equal to 80% of the contribution, and
the aggregate credit is capped at $40 million with an annual
adjustment for inflation.  The Director of the Department of
Economic Development is authorized to oversee and administer the
credit, establish rules, and certify participating organizations.

Administrative costs for the certified nonprofit educational
assistance organizations are provided through qualified
contributions on a tiered schedule.

School districts may opt into this program.  The eligible pupil
count must be adjusted if a pupil no longer is enrolled or
transfers to another school because of the receipt of a
scholarship.

The substitute contains an emergency clause.

FISCAL NOTE:  Estimated Effect on General Revenue Fund of a Cost
of $81,186 to an Income of $850,000 in FY 2006, a Cost of $78,536
to an Income of $850,000 in FY 2007, and a Cost of $80,587 to an
Income of $850,000 in FY 2008.  No impact on Other State Funds in
FY 2006, FY 2007, and FY 2008.

PROPONENTS:  Supporters say that the bill will provide incentives
for investment in scholarships for certain children in
provisional or unaccredited school districts and will expand the
educational opportunity and freedom it gives to parents to make
the best decision for their child.

Testifying for the bill were Representative Cunningham (86);
Lieutenant Governor; Urban League of Metropolitan St. Louis; Lisa
Cross-Shelton; Missouri School Coalition; St. Joseph Institute of
the Deaf; King for Educational Freedom Foundation; Missouri
Council for Private Education; Missouri Association for Christian
Schools; Missouri Associated Industries; Missouri Chamber of
Commerce and Industry; Ptah Academy; Mark Bankbridge; Carver
Christian Academy; Citizens for Educational Freedom; Missouri
Catholic Conference; MOCAPE; Leslie Farr; and Betty Conally
Denton.

OPPONENTS:  Those who oppose the bill say that they believe this
is a modified voucher system, and there is no consistent proof
that private schools produce more productive students.  Public
money should not go to support private schools, and this may have
a constitutional problem.

Testifying against the bill were National Education Association;
Cooperating School Districts of Greater Kansas City; Cooperating
School Districts of Greater St. Louis; AFL-CIO; Missouri
Federation of Teachers and School Related Personnel; Missouri
State Teachers Association; School Administrators Coalition; and
Missouri School Boards Association.

Robert Triplett, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:20 pm