Feds could consider school vouchers taxable income

Gov. Bill Lee speaks at the state Capitol on Sept. 16, 2019. (Erik Schelzig, Tennessee Journal)

Education Commissioner Penny Schwinn told lawmakers Monday that the federal government may consider money families receive under the Gov. Bill Lee’s school voucher program as taxable income.

(Update: There may be some backtracking going on.)

That may come as a surprise to lawmakers who voted for the bill that includes a provision stating that: “Funds received pursuant to this part …. do not constitute income of a parent of a participating student under title 67, chapter 2 or any other state law.”

As enacted, families in the Metro Nashville and Shelby County school districts earning up to 2.6 times the federal poverty level will be eligible for the program offering debit cards worth $7,376 — the equivalent of the average amount provided per student under the state’s school funding formula — to spend on expenses related to private school education. For a family of five, the income limit would be set at $76,500.

Schwinn told reporters after a House budget hearing that the tax determination was reached in consultation with the state Attorney General’s office.

18 Responses to Feds could consider school vouchers taxable income

  • Ralph Bristol says:

    THIS IS WRONG

    If “voucher money” spent to educate children at a private school is considered taxable income for the parent, then so should the money spend to educate their children at a public school. It should be both or neither.

    Are Pell grants and Hope Scholarship grants taxable income? Answer: No.

    • James White says:

      Yes it IS wrong. We are Taxed Enough.

      • Lenny says:

        A $7,000 check to people in Nashville is unfair to people in rural Tennessee. People in Nashville can send their kids to public school if they don’t want to pay taxes on their $7,000 check. It’s elective income. And it’s taxable

        • MARLE says:

          There is no such line item in the Fed tax code called “elective income”, Lenny.

          Other states have been using vouchers for years. Have the Feds taxed that money as income?

    • Karen Bracken says:

      We pay for public education we aren’t getting money sent to us like with vouchers. For those of us that tried to warn folks about this scam are not surprised. Eventually voucher kids will also be in the data pipeline and being taught the same crap as in Charters and traditional public schools. It is all a scam and the public is ince again being lied too.

    • James White says:

      The United States Supreme Court decided that Congress may regulate whatever it subsidizes, Wickard v. Filburn, 87 L. ed. 122, 1942; and since it is impossible for either a state or a taxpayer to question the constitutionality of a congressional appropriation, Congress may bring any subject within its regulatory jurisdiction by the simple expedient of voting a subsidy for it, Frothingham v. Mellon, 67 L. ed. 1078, 1923. – “The Conservative American” – Clarence Manion, 1964.

  • Beatrice Shaw says:

    School should be free at every level. We should have an incentive program to pay parents for their kid’s good attendance if they are under the poverty level.

    • Perry Aubric says:

      From the Constitution of the State of Tennessee:

      “The General Assembly shall provide for the maintenance, support and eligibility standards of a system of free public schools.”

      The same Constitution empowers the General Assembly to “establish and support” post-secondary institutions “as it determines.” So this state constitutionally requires free public schools through high school, but support at a higher level is permitted, but discretionary.

      But I disagree with you, Beatrice. Good attendance should be expected (as part of those “eligibility standards”), and no bribe should be paid to a parent to ensure it.

  • Martin S. Harris jr. says:

    This looks very much like the result of an under-cover strategy by the teachers’ union ( opposed nation-wide to charters because they are serious competition) to make charter enrollment less attractive to families considering them because of dismal achievement test scores results in conventional public schools.
    MH

    • Karen Bracken says:

      Charter schools are not included in the voucher program. They are already free publicly funded school. I wish people were better informed before making comments. Charters are required to teach the same crap as traditional schools so to think they are any better is a false sense of choice. But again they are not included in the voucher program.

    • MARLE says:

      While not affecting charters it certainly would be an effective deterrent to Poor families use of vouchers. Where are you going to come up with the money to pay the taxes IF the value of vouchers for your 3 children is included in your income. Could very well push you beyond the threshold for taxable income as well as make you in-eligible for other programs.

      Now all of that will make you think twice about your enthusiasm for vouchers. Way to go, teachers union!

  • Cannoneer2 says:

    I wonder if a large percentage of state level corporate welfare schemes could/would be declared “taxable”. Wouldn’t that be something…

    • MARLE says:

      Right now, in TN, I believe Professors and college administrators can send their children to state university (or possibly other state or private schools who are in a consortium of colleges) tuition free and That “monetary value” is NOT considered Income in Kind. It should be, of course. But this is a Special Carve out loophole for College staff and faculty. Sweet, right?

      This loophole was considered for the chopping block under the Trump ’17 tax bill BUT it remained in.

      • MARLE says:

        Right now, in TN, I believe Professors and college administrators can send their children to state university (or possibly other state or private schools who are in a consortium of colleges) tuition free and That “monetary value” is NOT considered Income in Kind. It should be, of course. But this is a Special Carve out loophole for College staff and faculty. Sweet, right?

        This loophole was considered for the chopping block under the Trump ’17 tax bill BUT it remained in.

        Way to prove you are a champion of continued loopholes (something you campaigned against).

  • Phil Lassiter says:

    Pig in a poke This Was passed in an ill conceived way. People only wanted a victory-they did not care what the outcome was

    • Lenny says:

      You’ve got that right. House Republicans didn’t turn on Casada because of Party Fowl Chicken. Casada stuck his chicken neck out for Bill Lee and literally tried to sell House Republicans (and Mark Windle) out for vouchers -even when the most conservative groups in the state were against them because, guess what, the ACLU is going to sue until illegals get a Bill Lee voucher.

    • Cannoneer2 says:

      I guess we have a Pyrrhic victory then.

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