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Betsy DeVos Watch: New Treasury Department regulations will assist in the efforts to transfer public money to private & charter schools

June 20, 2019

Last week, Secretary of Education Betsy DeVos, announced that the US Treasury Department released final regulations on charitable contributions and state and local tax credits.

In a statement that DeVos released, she said: 

“America’s families need more education freedom, not less. This week’s actions demonstrate that this Administration continues to listen to students and taxpayers. One of the most important aspects of the final rules and additional guidance will be to ensure taxpayers who choose to donate to state tax-credit scholarships are not penalized.

We are deeply grateful to the families, donors, non-profits, and state and federal policymakers who raised their voices about the benefits of education freedom and who articulated the unintended consequences of the proposed rule during the public comment process. The final rules and additional guidance announced this week are fair to students and taxpayers alike.”

As we reported on in March, what DeVos is conveying in this statement is that the new regulations by the US Treasury Department are paving the way for the Education Freedom Scholarships, which will ultimately allow more public money to be directed to private and charter schools. The Freedom Scholarship Programs are similar to the kinds of tax credit scholarship programs that are already used in 18 states to provide students with the opportunity to attend schools other than their nearest public school. These programs allow people and corporations to donate to a designated scholarship granting organization (SGO) and be reimbursed in the form of a tax credit. With the DeVos plan, states would designate the eligible SGOs, but the federal government would fund the tax credit reimbursement, up to $5 billion total.

According to the US Treasury Department, which released a statement about these new regulations on June 11

The regulations provide exceptions for dollar-for-dollar state tax deductions and for tax credits of no more than 15 percent of the amount transferred. Thus, a taxpayer who receives a state tax deduction of $1,000 for a contribution of $1,000 is not required to reduce the federal income tax deduction to take into account the state tax deduction; and a taxpayer who makes a $1,000 contribution is not required to reduce the $1,000 federal income tax deduction if the state or local tax credit received or expected to be received is no more than $150. The final regulations are effective August 11, 2019, but apply to contributions made after August 27, 2018.

So, it appears that the US Treasury Department is working hand in hand with the Department of Education to facilitate a massive transfer of public dollars into the private and charter school system.

These are the kinds of policies that the American Legislative Exchange Council (ALEC), along with the State Policy Network have been working on for the past two decades. You can see from the graphic below that the State Policy Network has a radical agenda to undermine numerous issues at the state level and now they have a federal government that is even more zealous about pushing these kinds of policies like defunding and privatizing public education.

Lastly, it should be noted that these kinds of policies are connected to what is happening at the Grand Rapids Public Schools, as we noted in yesterday’s post.

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