State lawmakers pass updated ‘Opportunity Scholarship’ bill

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)

LINCOLN — Nebraska lawmakers gave final approval Thursday to an updated bill that will devote $10 million a year in state funds for scholarships to attend K-12 private or parochial schools.

The 32-15 approval of Legislative Bill 1402 on the final day of the 2024 legislative session would end Nebraska’s distinction as one of only two states that don’t allow some form of school choice.

Gov. Jim Pillen has pledged to sign the bill into law, but the measure faces an almost certain challenge, either in the courts or at the ballot box.

‘An end run’ around referendum

LB 1402 has been described as “an end run” around a planned referendum on the November ballot over a school choice law passed last year, LB 753. That law allows taxpayers to devote up to half of their state income tax liability to “scholarship granting organizations” that hand out scholarships to private and parochial schools. LB 753 allowed up to $25 million a year for that purpose.

Jenni Benson, the president of the Nebraska State Education Association, called the passage of LB 1402 “a slap in the face to voters,” who signed petitions to place the issue of school choice, as designed under LB 753, on the November ballot.

Jenni Benson, president of the Nebraska State Education Association, celebrated in October after gathering more than 117,000 signatures to qualify a referendum on the 2024 ballot to repeal the Opportunity Scholarships Act — a referendum that now may be nullified. (Aaron Sanderford/Nebraska Examiner)

It’s likely that with the passage of LB 1402, the referendum on last year’s bill will be disqualified from the ballot, though Secretary of State Bob Evnen has not announced his intention.

The NSEA, in a press release after Thursday’s vote, pledged to either challenge the new law in court or mount another petition drive to force a referendum on it.

“We will continue the fight to ensure voters’ wishes on this issue are heard and respected,” Benson said.

Lauren Gage, a spokeswoman for Opportunity Scholarships of Nebraska, a scholarship granting organization, said supporters of LB 1402 are expecting it to be challenged.

State Sen. Lou Ann Linehan of Elkhorn. April 18, 2024. (Zach Wendling/Nebraska Examiner)

“This has been an uphill battle to help kiddos, and I don’t expect that battle to end,” Gage said.

State Sen. Lou Ann Linehan of Elkhorn, who has fought throughout her eight-year career for school choice, argued during the final-round debate Thursday that it wasn’t right that kids from low-income families don’t have the same choice to attend a private school, because of the cost, as children from more wealthy families.

“How can that be fair?” Linehan asked. “I’m fighting for school choice because I fight for kids.”

Linehan’s daughter, Katie, is employed by the American Federation for Children, a leading national advocate for school choice.

State Sen. Justin Wayne of Omaha. (Zach Wendling/Nebraska Examiner)

Omaha Sen. Justin Wayne argued that LB 1402 was a “different issue” than last year’s Opportunity Scholarships Act because it was a direct appropriation rather than a tax credit.

Linehan, he said, listened to criticism that last year’s bill was a “tax credit for the rich,” so she brought a different proposal in 2024. LB 1402 was also amended, to attract more support, to a $10 million a year measure rather than $25 million.

Wayne, a former member of the Omaha School Board, said students in low-performing schools in his northeast Omaha district deserve options.

Bellevue Sen. Carol Blood asked, if school choice was so popular, “why are you so scared to take this to a vote?”

“It’s wrong to create barriers to voting,” she said.

Others, including Norfolk Sen. Rob Dover, said providing low-income kids the opportunity to attend a different school could steer some away from gangs, “saving lives and keeping kids out of prison.”

Legal challenge possible

LB 1402 could present some strange legal twists, according to Lincoln Sen. Danielle Conrad, a lawyer and opponent of the bill, because part of the measure repeals last year’s Opportunity Scholarship Act.

If LB 1402 is challenged in court and ruled unconstitutional because it allocates public funds to non-public education, it would render the entire bill void, she said, and thus leave LB 753 in place.

There’s more, Conrad said.

If the secretary of state decides to take the current referendum about LB 753 off the ballot — and that’s very possible because “advisory votes” are not allowed on the ballot — and if LB 1402 is struck down, the senator said it would leave last year’s law in place, without the planned referendum.

A former state lawmaker and lawyer, Paul Schumacher of Columbus, provided a similar legal analysis to the Examiner earlier Thursday.

“It’s a neat chess game, but all the pieces fall together,” said Schumacher, who was term-limited and left the Legislature in 2019.

Gage, of the scholarship granting organization, said she could not speak to those legal opinions. “I’m sure a lot of lawyers will be looking into this,” she said.

So far, she said, 1,143 students have applied for Opportunity Scholarships under last year’s law, and 2,500 applicants are expected by the end of the month, which is the deadline to apply.

Meanwhile, the NSEA has scheduled a rally against LB 1402 for 9 a.m. Saturday at the State Capitol.

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