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Public Education, Children’s Health Funding in Harm’s Way With Current Federal Legislation

Stacy Bogard

By Stacy Bogard, CAE, MASB Assistant Director of Communications, PR & Marketing

DashBoard, Nov. 29, 2017

As MASB reported on earlier this month, Congressional Republicans are poised to move ahead with a tax reform proposal that includes, among other major changes, the elimination of state and local tax deductions on federal income taxes. This would have a trickle-down negative impact on public education, and has resulted in a call to action from the National School Boards Association as Congress returns from its Thanksgiving recess this week.

The NSBA action alert specifically notes that Senators should oppose any legislation that:

  • Limits full deductibility of state and local taxes used for education investments: State and local property, sales and income taxes support students, their families and communities. Retain full deductibility of state and local taxes and reject efforts to prevent taxpayers from fully deducting these payments on their federal income tax returns.
  • Eliminates School Bond Programs and Advance Funding: As an important investment in school infrastructure for safe, healthy and innovative learning environments, ensure that municipal bond programs (such as Qualified Zone Academy Bonds and Qualified Energy Conservation Bonds used for school building repairs and modernization) are included in final tax reform legislation. In addition, retaining the current federal tax statute for advance refunding of bonds that provides local school districts and communities the ability to refinance municipal bonds at lower interest rates as this ability saves taxpayer funds.
  • Excludes Teacher Tax Credits: Many of our teachers use their personal funds to augment resources for classroom instruction that benefit student achievement. Support the inclusion of the $500 above-the-line tax deduction proposed in the Senate bill.

The Senate tax bill version was advanced out of the Budget Committee yesterday. Ending the deduction of state and local taxes would likely mean the loss of $370 billion in tax revenue over 10 years with direct impact at the local level coming into play by the 2019-2020 school year.1 Take action today by contacting Sens. Gary Peters and Debbie Stabenow with your concerns, and sharing this information with friends and family in other states.

In other news at the federal level, funding has been halted since Oct. 1 for the Children’s Health Insurance Program, which serves more than 8 million low-income children. Michigan is predicted to have more time than other states before its program runs out of funds in April to as late as June 2018.2

Additionally, a temporary government spending bill expires next Friday, Dec. 8, with agreement needed to avoid a government shutdown.

Again, we encourage you to contact your federal representatives and senators to urge them to act in the best interest of public education and our nation’s children as they consider legislation.

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1 Education Issues at Stake as Senate Takes Up Tax Reform: State and Local Deductions, Teacher Supplies, Choice. Retrieved from www.the74million.org/article/education-issues-at-stake-as-senate-takes-up-tax-reform-state-and-local-deductions-teacher-supplies-choice/, Nov. 28, 2017.

2 States may roll back children’s health coverage without money from Congress. Retrieved from www.politico.com/interactives/2017/medicaid-chip-children-insurance-funding/, Nov. 28, 2017.