Kansas Passes Senate Bill 16

If there’s one thing ACE Scholarships has learned from being involved in tax credit scholarship programs, it’s that enactment is just the beginning. Implementation brings its own set of challenges that will need to be addressed. And sometimes those challenges are tough to predict. That’s exactly the case in Kansas, where a new bill has made a minor technical change with big implications for its scholarship program.

2017 – SB 19

The Kansas scholarship program requires that students meet two eligibility requirements. First, that they qualify for free lunch under the National School Lunch Program by having a family income of 130 percent of federal poverty guidelines or lower. And second, by attending an underperforming public school named on a list created by the state.

Under the old law, the list of eligible public schools was determined using criteria for certain federal funding programs. In 2017, however, the Kansas State Legislature passed SB 19, which included a number of changes to the Kansas program. Among these changes was a change to the list of public schools from which scholarship students must come. Under the bill, this list would now consist of the 100 lowest-performing public schools in the state.

That change didn’t draw much attention until it came into effect in July 2018. At which point, it became clear that the new list excluded a large number of elementary schools. The new, elementary-light list of qualifying public schools posed a significant problem for scholarship organizations. Why? Because students become less likely to transfer as they enter middle and high school. As a result, new scholarship students tend to come primarily from early grades. Thus, excluding elementary schools had the effect of decreasing the number of students who could enter the scholarship program.

2019 – SB 16

Enter SB 16, which changes the list of schools to the 100 lowest-performing elementary schools. This legal change actually began life as part of HB 2395, a K-12 school finance bill. During the process of moving HB 2395, legislators in the House stripped the language related to the scholarship program, along with many other provisions, and added them to a separate bill under consideration: SB 16.

SB 16 went on to pass 63-61 in the House and was subsequently sent to conference committee, where small groups of legislators work to iron out differences between versions of a bill passed by the House and the Senate. The House’s changes were ultimately accepted by both chambers, and the governor signed the bill on April 6, 2019.

What now?

The shift to the new list of low-performing elementary schools takes effect as soon as the bill’s contents are officially published into state law. ACE and other scholarship-granting organizations are waiting for the Kansas Department of Education to publish the list so they can begin recruiting new students.

As with all policy changes, SB 16’s modification to the scholarship program aren’t perfect. Yes, scholarship-granting organizations will now have an easier time recruiting new scholarship students. But the comparatively lower numbers of disadvantaged students in bad middle school or high school environments will now have few places to turn for help—they have effectively missed their chance to receive a scholarship.

ACE hopes to revisit the Kansas program in greater depth at some point in the future so more students can receive the benefits of a high-quality education. For now, though, SB 16 is the law of the land.


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2018 Election Day Impacts (Part 2)


Last week, we covered the likely federal impacts of the 2018 elections. As promised, we’ll now turn our attention to state-level impacts in a few key ACE states.

ACE Scholarships currently serves about 7,000 students across eight states. We don’t expect the elections to have a major impact on parental choice policy in some states, but others have seen some pretty significant shifts that are worth watching. Below you will find a brief overview of the highlights. Wherever you live, it’s always a good time for your elected officials to hear from you. If you’re a parent, student, or educator, take a few minutes to tell your legislators what school choice means to you using the button below.


Colorado has turned from purple to dark blue. The Colorado State Senate changed partisan hands and will now be controlled by Democrats, and Democrats held a strong majority in the already-blue State House of Representatives. With Democrat Jared Polis as governor and every statewide office won by Democrats, conversations about expanded parental choice may be more difficult. That said, the issue of educational opportunity does not and should not fall neatly along partisan battle lines. Support for parental choice policy, and especially for scholarship tax credit programs like those ACE facilitates in two states, remains strong across both political parties nationwide.

Colorado has a very strong public charter sector as well as extensive public school open enrollment, but tens of thousands of students still find themselves unable to access the schools they need. Choice supporters will need to work hard to educate elected officials about why access to private options matters to their communities. A great place to start would be getting familiar with the amazing ACE partner schools in each state legislative district.


The defeat of Republican gubernatorial candidate Kris Kobach by Democrat Laura Kelly could complicate conversations about expansions to the Kansas scholarship tax credit program, which ACE helps facilitate. Kobach was a strong supporter of the program, but Kelly’s position remains to be seen. The program is one of the most restrictive in the nation when it comes to student eligibility: Scholarship students must be eligible for free lunch (household income of 130 percent of federal poverty guidelines or less) and attend one of the state’s lowest-performing 100 public schools. Partially as a result of these restrictions, the program served just 292 students as of January 2018.

Revisiting student eligibility requirements to bring the program more in line with other programs nationwide could vastly improve its ability to serve Kansas families. In the meantime, ACE will continue working to serve its hundreds of scholarship families who do not participate in the scholarship tax credit program.


Texas saw no major partisan shifts statewide or in either state legislative chamber. However, the margins in a number of key races—including the U.S. Senate race between Ted Cruz (R) and Beto O’Rourke (D)—were much closer than many had anticipated. Whether those margins are evidence of a coming political shift or the result of a temporary surge is not immediately clear. In either case, narrower-than-usual margins could cause some Texas Republicans to avoid political risks despite maintaining strong grasps on all areas of the state government. Then again, some Republicans may be feeling confident about having survived the “blue wave” of 2018. We will have to wait and see how these tighter margins will impact efforts to expand parental choice for the state’s roughly 4.7 million public school students heading into the 2019 legislative session.


Wyoming has historically been one of the most politically stable states in the country in terms of state legislative control, and 2018 was no exception. Republicans maintained control of both state legislative chambers this year. The state does, however, have tendency to swap partisan control of the governor’s office regularly. It seems to have broken that pattern this time, electing Republican Mark Gordon to replace term-limited Republican incumbent Matt Mead. Continued Republican control of the governor’s office could factor significantly into future policy conversations in the state.


Thousands Voice Opinions on IRS Proposed Rule

Back in August, the IRS issued a proposed rule on federal charitable contribution deductions under state tax credit programs. For a refresher on this rule and its implications, see our previous post on the topic. For those just tuning in, the short version is that the IRS is considering a regulatory change that would forbid donors from receiving both a state tax credit and a federal charitable contribution deduction for the same gift.

The federal rulemaking process is a complicated one, as you can see below. The process for this rule has been slightly different because of a special agreement reached between the White House Office of Management and Budget and the Department of the Treasury regarding the implementation of the Tax Cuts and Jobs Act.

The public comment period (about halfway down the chart) on the proposed rule officially ended earlier this month. All told, nearly 8,000 individuals and organizations submitted comments on the rule. Unfortunately, many of these comments were submitted by opponents of parental choice in education—opponents who are thrilled at the prospect that the proposed rule could damage longstanding scholarship tax credit programs.

The negative comments tended to follow a template that offered little in the way of practical input. Instead, they thanked the IRS for the “ending of a tax shelter that allows taxpayers to turn a profit when they fund private schools through state tuition tax credit programs.” While there is a valid argument to be made that donors should not be able to “profit” from charitable contributions, these folks fail to mention that the scholarship programs they are targeting serve nearly 300,000 students nationwide.

Opponents were not the only ones who showed up to make their voices heard. Dozens of organizations and hundreds of individuals who support or benefit from scholarship programs submitted their own comments. Many of these comments criticized the IRS for failing to distinguish private charities from government-run workaround entities. Others offered substantive suggestions on how to avoid harming disadvantaged scholarship students as the rule moves forward.

ACE worked with its partner schools and scholarship families in Kansas and Louisiana to submit hundreds of comments asking the agency to consider ways to mitigate negative impacts on scholarship students. ACE also submitted a more detailed comment to the IRS making the following points:

  • Because the problem the IRS is seeking to address were created by federal legislation, allowing Congress to address the issue may be more appropriate (and effective) than a blanket regulatory solution.
  • The IRS should consider a phased implementation that would minimize shocks to existing scholarship programs.
  • If a phased implementation is not possible, the IRS should at the very least delay the rule’s effective date.

The IRS is currently reviewing comments on the rule, and will hear direct testimony on the issue at a Nov. 5 hearing in Washington, D.C.  After that, the agency will begin revising the rule into its final form before another round of review. ACE will continue watching the process closely as the rule moves toward finalization.