The U.S. Senate this month did what the conservative Texas Legislature couldn’t do earlier this year: pass legislation expanding what proponents call private school choice.
U.S. Sen. Ted Cruz, R-Texas, tacked on to the Senate’s version of the tax overhaul bill a provision that would allow parents to use college savings accounts called 529 plans, which aren’t taxed, to pay for expenses for kindergarten through 12th grade, including private school tuition and home school costs. The House version has a similar provision, but it allows an account to be opened before a child is born and doesn’t include home schooling expenses.
Texans have opened about 231,000 529 accounts, according to the state comptroller’s office, which oversees the accounts. That figure does not include Texans that have enrolled in other states’ 529 plans.
House and Senate negotiators will hash out differences in the bills before sending a compromise to President Donald Trump’s desk.
While critics have called Cruz’s amendment a private school voucher for rich families, Cruz has lauded it as the “most far-reaching federal school choice legislation.”
“Expanding 529s ensures that each child receives an education that meets their individual needs, instead of being forced into a one-size-fits-all approach to education, or limited to their ZIP code,” Cruz said in a statement shortly after the vote on his amendment.
Cruz’s effort comes months after his counterparts in the Republican-dominated Texas Legislature rejected school choice legislation — one version would have directed public money to private school tuition — one of a handful of hot-button issues that divided the state House and Senate during the regular legislative session that ended in May.
The Rev. Charles Foster Johnson, executive director of the Fort Worth-based Pastors for Texas Children and opponent of private school vouchers, said the government shouldn’t be involved in private religious schools.
“They have been sold a lie that public education has failed which couldn’t be further from the truth. We’re doing a better job than we ever have with dramatically reduced funding,” Johnson said.
Under Cruz’s amendment, families can use up to $10,000 a year from the 529 plans toward K-12 expenses that also include online schooling, textbooks and therapies for children with disabilities. Established 20 years ago, the 529 plans are used by families able to afford to sock away money for college. The returns on investments earned under the plans are not subject to taxes.
Texas offers three tax-advantaged 529 plans, and accounts are capped at $370,000.
It’s not clear how many Texas families would use 529 plans toward K-12 expenses.
But an analysis by the Center for Public Policy Priorities, an Austin-based liberal think tank, earlier this year found that if 5 percent of Texas students were to leave public schools, Central Texas school districts would lose $86 million in per-student funding in one year, and statewide, districts would lose a cumulative $2 billion.
School choice advocates called the figures overblown and said a study by EdChoice, an Indianapolis-based school choice organization, had shown that some states saved money through voucher systems by tapping into private school resources and creating competition in the education marketplace.
Although school choice advocates see Cruz’s amendment as a victory, they said it doesn’t do enough to expand choice to families of all income levels.
“Sen. Cruz is a longtime advocate for parental freedom in education, and it is no surprise that he championed this effort,” said Randan Steinhauser, the Texas adviser for EdChoice. “It is important to understand that this change would primarily affect families who have the financial means to put funds into a 529 account to begin with.”
Steinhauser, an influential voice for school choice at the Texas Capitol, said that so-called education savings accounts — accounts with public money for private school expenses — are better suited to moderate- and low-income families. Senate Bill 3 by state Sen. Larry Taylor, R-Friendswood, would have allowed students leaving public schools to open such an account.
However, the proposal received pushback from public school leaders and advocates because it would have redirected the per-student state money school districts receive to the savings accounts. House Democrats joined mostly rural Republicans to kill school choice legislation.
Public school advocates fear the tax cuts in the federal bills would exacerbate funding woes that Texas schools already shoulder. Teacher groups also oppose a provision in the House version that would repeal a $250 deduction for teachers who buy school supplies for their classrooms. The Senate doubles the deduction.
The average Texas teacher pays almost $700 a year for out-of-pocket purchases of classroom supplies, according to a survey by the Texas State Teachers Association last year.
“Overall, both bills are bad for educators, most parents and other middle-income wage earners because they are designed to provide more tax relief for the wealthiest Americans and corporations,” said Clay Robison with the teacher association.