Missouri News

Missouri Congressman proposes new federal child tax credit

Some good news out of Washington, DC this week as Missouri Congressman Jason Smith, Chairman of the US House Ways & Means Committee, and Oregon Sen. Ron Wyden, Chairman of the US Senate Finance Committee, jointly announced an agreement on a $78 billion plan to implement a new child tax credit and extend business tax breaks through 2025.

So what’s in the proposed bill?

· For Corporations and Businesses: The proposal includes $33 billion in corporate tax breaks (which can also be taken retroactively) related to costs for payments of interest and research and development.

· For Families With Children: The bill proposes to help lower-income families increase the amount of eligibility to claim the child tax credit, even if it exceeds their tax bill. Presently, most families aren’t able to claim the existing max of $2,000 per child because of their income. 

· And for both: The proposals would be paid for by phasing out the pandemic-era Employee Retention Credit (ERC), which has been accused of fraudulent claims and abuse.

Education reform bills were on the move this week in committee

Committee work continued this week with some notable movement on a handful of school choice bills.

Open Enrollment

The House Committee on Elementary and Secondary Education convened Thursday morning to consider the passage of HB 1989, sponsored by Representative Brad Pollitt (R-Sedalia). The bill outlines the procedures and policies necessary to allow students to transfer between nonresident school districts. Once modified, the bill was passed by an 11-6 vote. 

Aligned, the Quality Schools Coalition, YES Every Kid, the American Federation for Children, and the Missouri Century Foundation provided supporting testimony, and several school districts, individuals, and teacher's unions opposed the bill. 

Tax Credits for Educational Expenses

The Senate Committee on Education and Workforce Development convened Wednesday afternoon to consider the passage of SB 729, sponsored by Senator Andrew Koenig (R-Manchester). The bill establishes a tax credit for educational expenses incurred by families whose qualified children attend school outside of a traditional resident school district, such as a homeschool, virtual or private school, up to an amount equivalent to the state adequacy target. After a brief discussion, the committee passed the bill by a 5-4 vote. 

Empowerment Scholarship Account Program

The Senate Committee on Education and Workforce Development convened Wednesday afternoon to consider the passage of SB 727, sponsored by Senator Andrew Koenig (R-Manchester). The bill modifies several provisions relating to the Missouri Empowerment Scholarship Account Program. Under the proposed legislation, the existing maximum of $50 million in credits for the program would be increased to $75 million and includes an additional increase based on appropriations to the school transportation formula exceeding 90% of the projected amount necessary to fully fund the school transportation formula every year.

Additionally, the legislation proposes to authorize one additional educational assistance organization to serve as an administrative body for the program's funds, for a total of seven organizations, if the total amount of contributions to a single organization exceeds $25 million in a year. Finally, the proposal modifies the definition of "qualified student" to include any resident of Missouri, rather than only those students who live in a charter county or a city with at least 30,000 residents and any student who is a member of a household whose total annual income is below 400% of the income standard used to qualify for free and reduced-price lunch. During the discussion, substitute language was adopted which expands the counties eligible for a charter school to operate to include St. Louis County, St. Charles County, and Boone County. Once modified, the committee passed the bill by a 5-3 vote.  

School Accreditation and Assessment 

The Senate Committee on Education and Workforce Development convened on Wednesday afternoon to discuss SB 814, sponsored by Senator Jill Carter (R-Granby). The bill establishes the "Education Freedom Act," modifies provisions relating to the statewide school assessment system, creates certain school accountability report cards, and modifies the powers and duties of the State Board of Education. The "Education Freedom Act" repeals provisions of current law that authorize the State Board of Education to develop a statewide assessment system and a standardized assessment to measure academic performance standards of state elementary and secondary schools and instead requires the State Board to develop a summative assessment system that satisfies the requirements of federal law but is not used for the calculation of state aid or classification of a school for achievement standards. Additionally, the bill requires the Department of Elementary and Secondary Education to produce a school accountability report card for each public school district, public school building, and charter school in the state based on the academic performance of the school as compared to the prior year and requires the State Board to approve at least two national accrediting agencies or organizations from which school districts in the state can choose to utilize to comply with federal accreditation standards. The Missouri Council of School Administrators, Missouri National Education Association and several parents provided supporting testimony stating they support alternative means for accreditation and reducing standardized testing. Dr. Margie Vandeven, Commissioner of the Missouri Department of Elementary and Secondary Education provided informational testimony regarding the autonomy of local districts to choose standards of accountability and how it would potentially impact the measurement of students transferring between districts. No opposing testimony was presented to the committee.

Charter School Expansion 

The House Special Committee on Education Reform convened Wednesday afternoon and dedicated over two hours discussing three bills that seek to expand charter schools in the St Louis, St. Charles, and Columbia school districts. Specifically, HB 1485, HB 1764, and HB 1941, were sponsored by Representatives Brad Christ (R-St. Louis), Justin Hicks (R-Lake St. Louis), and Cheri Toalson Reisch (R-Hallsville), respectively. Citing the decline in school districts, the sponsor's intent with the legislation is to provide parents and students more choices, whether that be in the shape of a voucher or more open enrollment. During the bill presentation, committee members questioned what accountability measures charter schools have and questioned how charter schools differ from public schools in alleviating poverty and violence in communities. Numerous citizen advocates, along with parents and teachers provided supporting and opposing testimony. Supporting testimony highlighted charter schools have developed into a viable and necessary alternative to traditional schools and they are saving the kids that would normally be left behind. Whereas opposing testimony centered on concerns around resource allocations, as the expansion may divert essential funds away from traditional public schools. 

Child Care Cost-Sharing

On Thursday, the Senate Committee on Government Accountability heard SB881, sponsored by Senator Greg Razer (D-Kansas City). Subject to appropriation, the bill proposes to establish a pilot program administered by the Office of Childhood and the Department of Economic Development to facilitate access to childcare for Missouri employees. Under the proposal, a cost-sharing arrangement between participating employers, employees, and the state would equally share the cost of childcare services for full-time employees making between 201% and 325% of the federal poverty level (FPL). During the bill's presentation, Sen. Razer said he modeled the approach on Michigan's program known as "MI Tri-Care," which incentivizes employers and employees to work with the state to provide high-quality childcare options to families.

Campaign Life Missouri, Missouri Chamber of Commerce and Industry, City of Kansas City, Greater Kansas City Chamber of Commerce, Civic Council of Kansas City, United WE, Greater St. Louis Inc., Missouri Grocers Association, Missouri Retailers Association, and Missouri Catholic Conference provided supporting testimony. No opposing testimony was presented to the committee. 

Budget News

The House Sub-Committee on Appropriations-General Administration convened this week to complete the department presentations for FY2024 Supplemental requests and FY2025 Budget requests. The Governor’s Executive Budget will presented next week during the State of the State Address. Once this has been released, the various sub-committees will decide whether additional information is needed from the various departments or if the sub-committee recommendation process may begin. After the sub-committee recommendations have been completed, the full Budget Committee will begin to meet.  

Of particular interest this week, the Senate Committee on Appropriations convened to discuss SB 748, sponsored by Senator Lincoln Hough (R-Springfield). Currently, there is a two-year sunset on the Ground Ambulance, Nursing Facility, Medicaid Managed Care Organization, Hospital, Pharmacy, and Intermediate Care Facility for the Intellectually Disabled federal reimbursement allowances. The bill removes the sunset entirely. The sponsor stated he removed the sunset as this is a critical program and having to revisit it every year or two can impact the Medicaid program. The Missouri Hospital Association, Associated Industries of Missouri, Missouri Retailers Association, Missouri Grocers Association, Missouri Pharmacy Association, College of Emergency Physicians, Freeman Hospital, Fire Service Alliance, Missouri Assisted Living Facility Association, Preferred Family Health, Missouri Healthcare Association, Missouri Society of Anesthesiologists, Missouri College of Obstetricians and Gynecologists, Health Forward Foundation, BJC Healthcare, Ambulance District Association, Cox Health, Missouri Association of Rural Health Clinics, Rankin Jordan Pediatric Hospital, SSM Health, Mercy Hospital, Missouri Chamber of Commerce and Industry, Missouri Budget Project, Children’s Mercy Kansas City, provided supporting testimony stating this tax helps to create matching federal funds which generate over $4.3 billion and concerns were raised that pro-life language would result in lawsuits and cause delays in funding for critical programs. Missouri Right to Life provided opposing testimony stating the pro-life language is essential to protect life and no taxpayer dollars should go towards Planned Parenthood. Thursday morning the committee re-convened to consider passage of the bill. After a brief discussion regarding the lack of addition of pro-life language the bill passed by a 12-1 vote.  

Read the full legislative report

See all tracked legislation

Governor Parson to Deliver State of the State January 24th

As a reminder, Governor Mike Parson (R) will deliver his annual State of the State Address to a Joint Session of the Missouri House of Representatives and Missouri Senate at 3 pm on Wednesday, January 24^th. The State of the State Address is the time when a Governor’s priorities for the legislative session are outlined, including highlights of what budget recommendations the Governor is asking the legislature to consider. The State of the State Address will be live-streamed on Governor Parson’s Facebook page and the House of Representatives website at House Media Feeds.

In other news

· The stress of finding childcare is harming parents' health

· The debt associated with a college degree is causing graduates with special needs to re-think a 4 year degree

· How switch to homeschooling and drop in birth rates is affecting enrollment in Missouri and Kansas schools 

· Kansas City seeking to become hub for healthcare innovation and technology

· Missouri's education system scrutinized in hearing on expanding charter schools

Aligned Priority Bills Report for Missouri

Teacher Recruitment and Retention

This week the House Committee on Government Efficiency and Downsizing passed HB1648, sponsored by Rep. John Black (R-Webster Co.), which allows state agencies and political subdivisions to provide yearly pre-approved pay incentives of up to 20% of the base salary to retain employees and includes Aligned's priority legislation codifying the differentiated pay scale in public schools to allow school district boards to approve salaries outside of the regular scale for hard to staff or hard to fill positions on an annual basis.

Early Childhood Education and Childcare

The House Workforce Development and Infrastructure Committee passed another Aligned priority - HB1488, sponsored by Rep. Brenda Shields (R-St. Joseph), which creates 3 separate tax credit programs to increase access to childcare providers. 

• Separately, on Thursday the Senate Government Accountability Committee heard SB742, sponsored by Sen. Lauren Arthur (D-Clay Co), the companion legislation

Other education testimony

On Thursday the House Elementary and Secondary Education Committee passed yet another Aligned priority - HB1989, sponsored by Rep. Brad Pollitt (R-Sedalia), which creates procedures and policies to allow students to transfer between nonresident school districts.

The Legislature began their second week of work on Tuesday after the Martin Luther King holiday. Bitter cold temperatures and more snow, however, kept some legislators at home another day, making this another short week. While a few committee meetings were canceled on Tuesday, it was mostly business as usual as lawmakers were eager to fast-track a tax bill to the Governor’s desk by the end of the week.

Governor Promises to Veto School Choice Legislation

In her recent State of the State address, Kansas Governor Laura Kelly made a strong commitment to veto any legislation aimed at redirecting tax dollars from public education to private schooling. However, the likelihood of such legislation even reaching her desk this year appears uncertain, given past failures and the reluctance of legislative leaders to take up this divisive issue in an election year.

House Speaker Dan Hawkins (R-Wichita) expressed reservations about revisiting the school choice debate this year, stating, "I'm probably not interested in having a vote on school choice again this year." Despite previous votes on the matter, Hawkins emphasized the need for broader discussions and more stakeholders at the table before taking any action.

Hawkins highlighted the importance of continuing conversations on the topic during the upcoming legislative session but suggested that actual legislation might not be on the horizon. "It's not something I anticipate is going to happen in this next session," he added.

Last year, the Kansas Legislature explored various approaches to allocate public tax dollars to private schools. These measures aimed to provide parents and students with more educational choices. However, none of them gained sufficient support to become law.

One proposal suggested granting $1,000 awards to public school students and $5,000 to private school students from families with incomes below 250% of the federal poverty level. Another bill aimed to deposit a student's state base aid, approximately $5,000 per year, into education savings accounts for use at private schools. A third bill, targeting the state's ten largest counties, never advanced in either chamber.

Governor Kelly staunchly opposed any voucher proposal diverting public money to private schools, arguing that it would harm rural Kansas schools. She emphasized the importance of local schools as integral to the fabric of small-town life.

Senate President Ty Masterson (R-Andover) acknowledged that school choice remains a priority but conceded the difficulty of achieving a veto override. "The governor is clearly against parental choice. I'm not going to waste our people's time," Masterson stated.

Leah Fliter, from the Kansas Association of School Boards, believes that a veto override is unlikely based on last year's votes but anticipates a continued debate on the issue.

Republican state Rep. Kristey Williams (R-Augusta), chair of the K-12 Education Budget Committee, mentioned that school choice competes with other legislative priorities such as tax cuts and special education funding.

While school choice legislation may not be at the forefront this session, Fliter noted that a bill providing a tax credit for home school or private school students is under consideration.

Despite the uncertainty, Dinah Sykes (D-Lenexa), the Senate's top Democrat, believes that there is a faction within the Republican Party determined to advance school choice, suggesting that Masterson may not stand in their way.

In conclusion, the future of school choice legislation in Kansas remains uncertain, with political considerations, competing priorities, and Governor Kelly's veto threat shaping the debate. However, the issue continues to spark discussions among legislators and advocates on both sides.

Republican Tax Plan Approved

After Governor Laura Kelly presented her tax plan on the first day of the legislative session, Republican leadership began crafting a counter proposal for her consideration. Negotiators from both the House and Senate Tax Committees finalized their conference committee report on House Bill 2284 on Wednesday, sending it to the House and Senate floors for votes.

The Senate debated the bill on Wednesday afternoon before passing it by a vote of 25-11. One Republican Senator was absent, still leaving them one vote shy of overriding Governor Kelly’s already-promised veto. The measure moved to the House on Thursday morning and passed by a vote of 81-37. With the few Republican House members gone for the vote, most are expecting a successful override in the House. The Senate is still uncertain.

If Kelly’s veto is sustained, it’s back to the drawing board for legislative leaders to come up with a plan B. One thing is certain, lawmakers from both the executive and legislative branches and on both sides of the aisle, are determined to pass tax cuts this year before they go home and start campaigning for their reelections.

The seven provisions contained in the Republican’s tax proposal would do the following:

• Move to a single income tax rate of 5.25% starting in tax year 2025. The first $6,150 for individuals and $12,300 for married filers would be exempt.

• Exempt all Social Security income starting in tax year 2024.

• Exempt the first $100,000 from the state’s 20-mill property tax levy for schools starting in tax year 2024.

• Raise the standard deduction based on inflation increases starting in tax year 2024.

• Increase by $50 the personal tax exemption of $2,250 starting in tax year 2024. The exemption would increase annually based on inflation starting in tax year 2025.

• Fully eliminate the sales tax on groceries starting on April 1, 2024.

• Reduce the privilege tax rate for banks from 4.37% to 3.75%, and for trusts and savings and loans from 4.5% to 3.85%. Since banks don’t pay corporate taxes, they could not take advantage of the corporate tax rate reduction passed in 2023.

Read more on this week in the capitol here.

Governor Kelly's Budget details here.

In other news

• Education set to be a prime focus of state lawmakers this year
• Senators question KS Regents nominee over DEI
• Why Americans have lost faith in the value of college
• Working to teach: Some local teachers must work outside jobs to stay in the classroom

Edunomics Lab is a Georgetown University research center that explores and models complex education finance decisions to inform policymakers. In their last regular update, Edunomics described the state's role in school funding as "Pay and Pray" meaning that it's the state's job to dole out the dollars, but the districts get to make the spending decisions. However, they argue the state has levers they can pull to inject more budgetary control.

Here are five ideas:

1. Have leaders weigh student outcomes in budget decisions.
2. Require finance training so district leaders are equipped to spend money well.
3. Keep benefits costs in check.
4. Ensure districts look multiple years ahead.
5. Support and intervene in fiscally mismanaged districts.

They warn that with the fiscal cliff on the horizon, legislatures should take a more significant role in ensuring districts are doing right by their students regarding spending decisions.

Good advice!

Have a great weekend and all our best,

Torree Pederson

President

Aligned

Torree@WeAreAligned.org

(913) 484-4202

Linda Rallo

Vice President

Aligned

Linda@WeAreAligned.org

(314) 330-8442