PIERRE | Parents looking for help sending their children to private school may be able to tap a state-backed scholarship program as soon as this fall under South Dakota's new school choice law, the measure's legislative sponsor said Thursday.
Going into effect next month, the plan mimics other states' programs by offering tax credits in exchange for donations to private-school scholarships. Advocates are laying the groundwork for South Dakota's program, which targets insurance companies with the tax incentive.
Lawmakers approved the plan this year over the protests of public education advocates.
Under the law, insurance companies can get an 80 percent tax credit for total contributions to a grant organization that provides the scholarships. The total amount of credits is capped at $2 million each budget year.
Supporters last month established a nonprofit called South Dakota Partners in Education to dole out scholarships as funding becomes available. Advocates have been contacting insurance companies and learning from other states that have similar programs, said retiring Republican Sen. Phyllis Heineman, the measure's legislative sponsor.
The organization aims to award at least some scholarships for the fall, said Heineman, who is also a board member of the new nonprofit. Her work is "purely a volunteer effort," and she won't see any financial gain from the unpaid position, Heineman said.
Some insurance companies have already shown interest in the program, and larger national insurers are familiar with the tax credit concept from other states, said board member Katie Mellor, president of the South Dakota Christian Schools Association.
Boosters say the tax credits target businesses that pay an insurance company tax in South Dakota because it is a stable source of revenue that shows consistent growth.
"We'd love to be able to hit our $2 million tax credit limit," Heineman said. "That would be our ultimate goal, and with that we could award many hundreds of scholarships."
Students under the South Dakota program will be eligible for the scholarships if their families the year before made up to 150 percent of the income standard used to qualify for free or reduced-price lunch, among other conditions.
Critics argue the state has an obligation to provide public education and that the measure could unconstitutionally direct public funds to religious schools. They worry it could lay the groundwork for a larger program that would siphon a significant number of students and support from public schools in the future.
"We've seen tax credits be the beginning of vouchers in other states, and it's a concern when we begin to talk about diverting revenues from our public schools," said Mary McCorkle, president of the South Dakota Education Association, a teacher's union. "Our public schools are the great equalizer, the provider of opportunity for all our students."