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Tax credits for private school scholarships clears House Education

Brent Duerre

The House Education committee advanced a bill on Wednesday continuing a program allowing tax credits to businesses supporting sending students to private schools.

At the core of the issue is a philosophical question – would the tax credits offered to insurance companies for participation in the Partners in Education program be general fund dollars otherwise?

Proponents of SB 72, including sponsor Sen. Jim Stalzer, R-Sioux Falls, say no.

“An insurance company can put the money into the fund, and then the fund is distributed," Stalzer said. "Per the Supreme Court, this is not state money, so I would have some objection to saying it needs to go to appropriations."

Historically, this program has never been in front the Appropriations Committee since passage in 2015.

Opponents of the bill, including state Education Association government relations director Sandra Waltman, disagree.

“You can have a discussion about whether these tax credits are actually state general fund dollars, but if they’re not going to the scholarship granting entity, they’re going to the state general fund," Waltman said. "So, we would argue that even if you want to say they’re not state dollars, it reduces the dollars available in the state general fund.”

If the bill passes, the pool for these credits will increase to $5 million for an undisclosed group of South Dakota insurance companies. For Large School Group lobbyist Diana Miller, that number needs more discussion.

“We’re not arguing the legislature does or doesn’t have the right," Miller said. "I want you to think about this is a veiled voucher program, and the fact of the matter is the best place it belongs is a discussion in the appropriations committee.”

Ultimately, the bill was referred to the Committee on Appropriations via the house floor

C.J. Keene is a Rapid City-based journalist covering the legal system, education, and culture