The U.S. House Ways and Means Committee is continuing its mark-up of H.R. 1, the Tax Cuts and Jobs Act (TCJA). This legislation is the first draft of a bill for tax reform and is expected to be considered by the committee throughout this week. Overall, several of the bill’s provisions would negatively impact school districts.
Please contact Minnesota’s members of the U.S. House of Representatives and urge them to reject the provisions in the TCJA listed below.
- District 1 — Rep. Tim Walz | 202-225-2472 | https://walzforms.house.gov/contact
- District 2 — Rep. Jason Lewis | 202-225-2472 | https://jasonlewis.house.gov/contact
- District 3 — Rep. Erik Paulsen | 202-225-2871 | https://paulsen.house.gov/contact-me
- District 4 — Rep. Betty McCollum | 202-225-6631 | https://mccollum.house.gov/contact/email
- District 5 — Rep. Keith Ellison | 202-225-4755 | https://ellison.house.gov/contact
- District 6 — Rep. Tom Emmer | 202-225-2331 | https://emmer.house.gov/contact/email
- District 7 — Rep. Collin C. Peterson | 202-225-2331 | https://collinpeterson.house.gov/contact-me/email-me
- District 8 — Rep. Rick Nolan | 202-225-6211 | https://nolan.house.gov/contact/email-me
1. Educational Choice — H.R. 1 proposes the expansion of Coverdell education savings accounts (also called 529 plans) to facilitate up to $10,000 in tuition for private schools. NSBA opposes this provision and urges Congress to reject this proposed expansion of 529 plans. Specifically, NSBA opposes vouchers, tax credits, and tax subsidies for use at non-public K-12 schools.
Talking Point: We urge you to reject the provisions in Section 1202 of the Tax Cuts and Jobs Act that would expand Coverdell accounts (529 plans), as this would drain resources from our public school districts and impact innovate education programs that are helping raise student achievement. Instead, we urge your strong support for the range of choices that are currently offered by our nation’s public school districts, such as magnet schools, charter schools authorized by local school boards and schools with specialized curricula for science, technology, engineering, the arts, and mathematics (STEAM).
2. State and Local Tax Deductibility — H.R. 1 would limit full deductibility of state and local taxes-property, sales and income taxes — that are used for education investments (Section 1303). Under H.R. 1, taxpayers would only be able to deduct up to $10,000 in property taxes. Urge your members of Congress to support our students, their families and communities by maintaining full deductibility of state and local taxes (SALT).
Talking point: We urge your strong support for tax legislation that will strengthen state and local efforts to fund public education, and to reject proposals that would negatively affect those efforts. We urge you to retain full deductibility of state and local taxes and to reject Section 1303 of the Tax Cuts and Jobs Act.
3. School Bond Programs and Advance Refunding — Municipal bond programs that benefit school construction projects and other capital improvements for school districts would be eliminated under H.R. 1, along with advance refunding of bonds. Advance refunding allows a bond issuer to refinance the bond one time for a lower interest rate, which is a cost-savings to taxpayers.
Talking Point: As an important investment in school infrastructure for safe, healthy and innovative learning environments, we urge you to retain the programs that H.R. 1 proposes to eliminate in Sections 3601, 3602 and 3603.
4. Cadillac Tax on Healthcare Plans for Teachers and Other School District Employees — Although H.R. 1 does not address the “Cadillac Tax,” this is an opportunity to urge that Congress address the issue, which would impose a fiscal burden on many school districts that do not have the resources to pay an excise tax on health care plans for teachers and other educators. Under the Affordable Care Act, this tax is scheduled to be collected in the year 2020 and would require employers to pay a 40 percent penalty on health insurance expenditures over $10,200 for individual coverage and $27,500 for family coverage.
Talking Point: While H.R. 1 does not currently include provisions that address the “Cadillac Tax,” we urge you to modify conditions under which penalties may be imposed on school districts as employers for health insurance coverage that exceeds the price benchmark established by the Affordable Care Act (ACA), as there is bipartisan support to address this fiscal burden.
The U.S. Senate also will be taking up their version of the Tax Cuts and Jobs Act this week.