A bill that increases funding for private school scholarships is making its way through the legislature.
In 2016 state lawmakers approved a scholarship program that gives money to low-income students who want to attend a private k-12 school in the state. The scholarships are funded through tax credits given to insurance companies.
Insurance companies must pay an insurance premium tax to the state. Instead of paying that tax, they can choose to give all or part of it to the not-for-profit South Dakota Partners in Education. The organization then distributes those dollars as scholarships and the insurance companies are given a tax credit.
Currently, the tax credit is capped at $2 million. Senate Bill 71 would raise that cap to $3.5 million.
Proponents say the program gives low-income families the freedom to decide what type of education is best for their children. Representative Jon Hansen is a republican from Dell Rapids. He says the demand for scholarships has outgrown the $2 million cap.
“What that means practically is that there are a number of children who could benefit from this program who are unable to do so.”
Opponents of Senate Bill 71 say the program takes away from state general funds, and if an increase is needed it should go through the same appropriations process as other funding measures.
Representative Erin Healey is a democrat from Sioux Falls.
“I’m also worried that by increasing the amount of money, that we are going to start funding two systems – public and private.”
Senate Bill 71 has passed the Senate and the House Education Committee. It now moves to the House floor.