After Whitmer vows veto, group plans school tax break scholarship initiative

Beth LeBlanc
The Detroit News

A ballot committee plans to collect signatures for an initiative allowing people to get a tax break if they contribute to a statewide student scholarship that could be used for private school education — an idea Gov. Gretchen Whitmer has promised to veto as a bill.  

The Let MI Kids Learn ballot committee formed Monday will collect signatures to enact legislation creating the Student Opportunity Scholarship — one of a few pending proposals primed for a court fight over Michigan's so-called Blaine Amendment, a ban on public funding for private schools. 

The petitions — one to change school code and another changing the Income Tax Act — were submitted to the Bureau of Elections Monday with a request for the bureau to prepare the 100-word descriptions that will accompany each of the petitions as circulators gather signatures.

The GOP-led Legislature gave their final stamp of approval to bills creating the scholarship program last week, but Whitmer said the plan is too close to a voucher-style handout to pass her muster. 

By pushing the measure through a signature gathering effort, the ballot committee can avoid Whitmer's veto and send the question to voters in 2022 or, more likely, to the Republican-controlled Legislature for adoption before it heads to the ballot. 

“This exciting legislation gives new opportunities to learn to children, and new choices to tens of thousands of Michigan parents,” said Fred Wszolek, spokesman for Let MI Kids Learn. “But Gov. Whitmer stands in the schoolhouse door with her veto pen, determined to strip families of any choice, and deny children the money they deserve for educational opportunities. We’re just as determined to veto Whitmer’s veto with our petition.”

Should organizers collect the more than 340,000 signatures needed, the measure is likely to head back to the Legislature for approval, Wszolek said. 

Michigan's Blaine Amendment, approved by voters in 1970, prohibits public dollars from being used for nonpublic schools. Legal and petition initiative efforts seeking to undo the amendment in the decades since its passage have been unsuccessful, even those that received millions of dollars in support from West Michigan's DeVos family.

Voters last rejected a proposed constitutional amendment initiative for school vouchers in 2000. 

Wszolek maintained the measure does not conflict with the state's ban on "tax benefits" being used as a type of state funding for private school education. 

"You can’t give someone a tax credit on what they spend on private school tuition," Wszolek said. "But that’s not what this does. ...It’s well separated from any sort of direct aid from the state to private entities.”

Still, he expects the DeVoses and "tens of thousands" of other donors will be supporting the effort moving forward. 

"I’m sure they’re going to be strongly supportive of this," Wszolek said. "They’ve been committed to this for a very long time.”

Under the legislation, individuals could contribute money toward scholarship-granting organizations under the Student Opportunity Scholarship program for which they would receive a tax credit. The program would be capped at $500 million in contributions each year. 

To receive a scholarship from the fund, a student would have to be in a household with an income under 200% of the financial eligibility for free or reduced lunch, have some sort of disability, be in the foster care system or have someone else in their household receiving funds through the Student Opportunity Scholarship program. 

The money could be used on tuition or fees for public or nonpublic education or online learning programs, tutoring, extracurricular programs, textbooks or instructional materials, computer hardware, uniforms, standardized test fees, summer school, after-school programs or child care, dual enrollment, transportation, sports fees or career or technical programs.

For a public school student, the funding would be capped at $500 or, for a public school student with a disability, at $1,100. 

For nonpublic school students, the funding would be capped at 90% of the minimum foundation allowance spent on public school students, minus three-eights of the percentage that the household income exceeds free or reduced lunch eligibility criteria. For a nonpublic school student with a disability, scholarship amounts would be capped at 90% of the minimum foundation allowance without consideration of household income.

Nonprofits wishing to participate in the program would apply to the Michigan Department of Treasury for certification and renewal as a scholarship-granting organization. The application would need to include proof of their nonprofit status and descriptions of how they would determine eligible students, the application process used for interested students and the process the nonprofit would use to approve education service providers for the program. 

To receive certification or renew certification for a scholarship-granting organization, the Treasury Department would need to ensure the nonprofit could or did allocate 90% of the scholarship funds it received, maintain separate accounts for the scholarship funds and operating budgets, and used two or more education service providers in administering scholarship funds.

The nonprofits could keep no more than 10% of the scholarship funds for administrative expenses.

The tax credits would mean up to $500 million a year less in the state general fund and some losses from the school aid fund, as well as the possibility that more students and funding leave public schools for nonpublic institutions.

Separate from the ballot initiative effort announced Monday, the Midland-based Mackinac Center for Public Policy filed a lawsuit in September against the state over prohibitions on the use of  the tax-incentivized Michigan Education Savings Plan for nonpublic school tuition. 

The suit asks the court to declare Michigan's Blaine Amendment unconstitutional and stop the state from demanding a tax cut refund from people who use their education savings for private K-12 education.

The announcement of Monday's ballot initiative marks the fourth GOP-supported ballot initiative launched since the start of the pandemic. 

The first, Unlock Michigan, successfully repealed an emergency law Whitmer had used during the pandemic to issue dozens of executive orders. 

The second, Unlock Michigan II, currently is collecting signatures to put a 28-day time limit on state epidemic orders.

Another, Secure MI Vote, also is collecting signatures and would change some of the state's voter ID and absentee voting rules.