Families across Missouri are celebrating the passage of HB349 which will create Missouri’s first Empowerment Scholarship Account Program and provide real educational options to thousands of Missouri children.
But while the bill has passed through the Missouri General Assembly, there is still a long way to go before students start receiving scholarships.
While an exact timeline for full implementation is still unclear, here is a breakdown of the steps that have to happen before students are able to use this innovative program to access schools of choice.
The first step for HB349 is for the passed legislation to actually become law.
The bill has been delivered to Gov. Mike Parson who has until July 14 to decide whether to sign the bill, veto the bill, or let it go into law without a signature. (You can encourage him to sign the bill here.)
If he signs the bill or chooses to let it go into law without a signature the bill will still not go into effect until August 28, 2021.
Once HB349 is officially law in Missouri, then the State Treasurer’s Office can start the real work of implementation.
HB349 requires the Treasurer’s Office to do a lot of the heavy lifting for implementing the new program including setting rules and guidelines for how tax credits will be issued, whether to use Education Assistance Organizations (EAO) or a state board to manage scholarships, and how EAOs can operate if they are used.
All of these decisions will be made during a rule-making process that will involve public comment and could take from six to nine months to complete.
Given the contentiousness of school choice it is very likely that some form of lawsuit will be filed against the state to block implementation of HB349.
Following the 2018 Espinoza v. Montana Department of Revenue Supreme Court ruling (learn more here), there is very little chance that any potential lawsuit would prevent HB349 from being fully implemented, but such a lawsuit could delay the implementation process as it works its way through the court system.
Once the rulemaking process is complete and a system is put in place to distribute tax credits in return for donations (either through EAOs or a state board) then funds still need to be raised for scholarships.
Thankfully, the tax-credit program outlined in HB349 is very generous and will hopefully make fundraising easy.
Under the program individuals, businesses and corporations can make a donation to the program and receive a 100 percent tax credit (up to 50 percent of their tax liability) in return for their donation. So, for example, if John Smith has a tax liability of $1,000, He could make a donation of $500 and receive a $500 tax credit in return. John could contribute as much as he wants, but would only receive credits for contributions that are under 50 percent of his tax liability so he could contribute $1,000 but would still only receive $500 in tax credits.
While there is still a lot to work out over the coming year, it seems likely that the first Empowerment Scholarship Account scholarships could be issued to students in time for them to use them at the start of the 2022-23 school year.
Please continue to follow CEAM’s blog for updates on this process over the coming year.
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