New Nebraska Bill on ‘Opportunity Scholarships’ Passes First-Round Debate

Proponents say low-income kids need an option; opponents say bill denies voters a chance to decide if they support school choice.

Nebraska Gov. Jim Pillen speaks at a “school choice” rally in the Rotunda at the Nebraska Capitol on Jan. 24, 2023. (Aaron Sanderford/Nebraska Examiner)

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LINCOLN — After an emotional, four-hour debate that extended into Tuesday night, Nebraska lawmakers gave initial approval to a new plan to deliver state-funded scholarships to attend private schools.

The vote was 31-12 to advance Legislative Bill 1402 from first-round debate, which came after the bare minimum, 33 senators, voted to halt a filibuster against the bill.

Two senators, Myron Dorn of Adams and Teresa Ibach of Sumner, voted for cloture but were “present and not voting” on advancing the actual bill.

While opponents of the bill called it unconstitutional and a way to block a public vote on school choice, advocates said students who struggle in public schools, especially those in low-income families, deserve the option of a private or parochial school through what amounts to a school voucher.

“Every child should have access to a high-quality education, not by chance, not by privilege, but by right,” said State Sen. Justin Wayne of Omaha, a former member of the Omaha Public Schools Board.

The main sponsor of LB 1402, Elkhorn Sen. Lou Ann Linehan, said students from low-income families, who get priority for the Opportunity Scholarships, don’t have the same choice of switching to a private or parochial school as do children in a more affluent family.

“Why is it that we in the Legislature don’t feel that kids should have a choice?” Linehan said, pointing out that the $10 million cost of the bill is a tiny fraction of what’s spent on public schools.

‘Blatantly’ unconstitutional

LB 1402 comes up for second-round debate on Wednesday. If it passes, it is expected to be challenged, either by a referendum to put it on the fall ballot or by a legal challenge that it violates the State Constitution’s ban on the “appropriation” of public funds to non-public schools.

Lincoln Sen. George Dungan said LB 1402 is more constitutionally suspect than the Opportunity Scholarship Act passed by the Legislature a year ago.

Last year’s law allowed taxpayers to earmark up to half of their state income tax liability to “scholarship granting organizations” that then handed out grants to children to attend private or parochial schools, thus likely not a direct appropriation.

“This is blatantly a (state) appropriation,” Dungan, an attorney, said of the new bill.

Linehan disputed that, citing a 1984 ruling by the Nebraska Supreme Court that upheld a state program that granted scholarships to students who could then choose to attend a public or private college.

‘Straw man’ argument

“The straw man argument that this is unconstitutional doesn’t hold water,” said Dunbar Sen. Julie Slama, who is also a lawyer.

But Dungan, as well as Omaha Sen. Wendy DeBoer, disagreed, saying the money doled out by LB 1402 — unlike the scholarship funds of 1984 — can only be used for private education.

Passage of LB 1402 would nullify a referendum petition drive led by the state teachers’ union that gathered more than 117,000 signatures to place last year’s bill on this year’s November ballot. Just how passage of this year’s bill would play out — whether it would lead to the removal of the referendum from the ballot, for instance — has not yet been determined.

The head of the Nebraska State Education Association called Tuesday’s vote “a slap in the face” to those who signed the petition so that voters would have the final say on school choice.

“It is deeply troubling that Sen. Lou Ann Linehan and her out-of-state billionaires continue to try to deny Nebraskans’ right to vote on this issue,” said Jenni Benson, president of the NSEA and a leader in Support Our Schools, which organized the referendum.

The petition drive was hotly contested, with competing claims of improper tactics to collect signatures and block people from signing. More than $2 million was spent to collect signatures and employ “blockers” to discourage signers.

A group financially backed by charter school proponent Betsy DeVos, a former official in the Trump administration and member of a billionaire family, was a major funder of the school choice forces.

A year ago, the State Legislature’s passage of the Opportunity Scholarship Act ended Nebraska’s status as one of only two states that didn’t offer some type of school choice. North Dakota is the other state.

1,000 scholarships expected

Under that law, more than 1,000 students are expected to receive Opportunity Scholarships averaging $5,000 each to attend a private or parochial school.

This year, however, Linehan introduced a new version, LB 1402, in large part to avoid an expensive campaign battle over the referendum placed on the November ballot to nullify last year’s law.

The new bill also eliminated the income tax break on donations to scholarship granting organizations, which Linehan said was wrongly portrayed as helping the wealthy.

Under the new bill, the state treasurer would set up a program to provide scholarships to eligible students to attend “qualified” schools. That would eliminate the middle man, the scholarship granting organizations, and aim the money directly to students.

Cost dropped to $10 million a year

On Tuesday, the senator offered more amendments intended to expand support for LB 1402. The fiscal impact of the bill was reduced to $10 million a year, instead of $25 million, and an “escalator” clause was dropped that would have allowed spending on private schooling to rise to $100 million a year.

One supporter of LB 1402, Omaha Sen. Christy Armendariz, argued that with math and reading scores suffering in public schools in her district, something needs to be done.

“We’re tripping over ourselves about what school building they’re in? We should be doing everything we can,” Armendariz said.

But opponents of LB 1402 said there were no guarantees students would do better in private schools or avoid bullying there.

Omaha Sen. Megan Hunt said private and parochial schools can discriminate, unlike public schools, by denying entrance or expelling LGBTQ students.

Bellevue Sen. Carol Blood argued that Nebraskans are asking to decide the issue of school choice at the voting booth, just as they decided the issues of capital punishment and Medicaid expansion.

“Then it’s resolved once and for all,” Blood said.

But Wayne said he considers LB 1402 a “pilot project,” that can be rescinded by future legislatures if it doesn’t work out.

Linehan agreed, adding that in other states, the battle over school choice is a “continual fight.”

“It’s not a one and done deal,” she said.

Nebraska Examiner is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Cate Folsom for questions: info@nebraskaexaminer.com. Follow Nebraska Examiner on Facebook and Twitter.

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