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Senate Shapes Plan for Private Scholarships

In its quest for school choice legislation, the Senate is backing away from traditional vouchers and heading toward a plan that would use donations to fund scholarships for low-income students trying to get out of weak schools.

Lt. Gov. Dan Patrick listens to debate on SB 8  franchise tax reform measure during Senate action March 25, 2015.

If so-called school choice legislation comes out of the Texas Senate, it is unlikely to call for using taxpayer dollars to fund private school vouchers. 

Instead, Senate Bill 4 — the leadership-backed measure voted out of committee earlier this week — would use tax incentives to coax private donors into funding scholarships for students trying to get out of failing public schools. 

The bill's language, not yet available online, sheds light on how Lt. Gov. Dan Patrick hopes to fulfill his promise to continue a push he began as a state senator and offer more educational options for students trapped in underperforming public schools.

At a recent hearing, members of the chamber's education panel considered wide-ranging proposals that did not contain any limits on student eligibility or accountability requirements on private schools. But SB 4's new language, passed as a committee substitute, is much more narrowly tailored. 

The bill would set up an initial $100 million in state tax credits for businesses that donate money to fund scholarships for special-needs and low-income students. The amount of available tax credits would go up in ensuing years. The scholarship program would exclude sparsely populated areas, a concession perhaps crafted to earn the support of rural lawmakers who have been reluctant to approve such a program in the past.

Distributed through nonprofit foundations approved by the state, the scholarships would be capped at 75 percent of the average state funding per student, which currently comes to just over $6,000. 

Only students who qualify as special needs or whose parents make annual salaries within 250 percent of the federal poverty limit — about $84,000 a year for a household of four — who currently attend a public school with an enrollment of more than 100 in counties of more than 50,000 people would be able to apply.

To enroll a tax credit scholarship student, private schools would have to be accredited and annually administer a national norm-referenced standardized exam.

Those provisions may still not be enough to persuade critics of such programs, who sometimes refer to tax-credit scholarship policies as "backdoor vouchers." They may insist on further accountability measures at participating private schools.

If the measure clears a vote of the full Senate, which is expected to take it up in the next few weeks, it will then head to the House. 

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