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SALT LAKE CITY — Utah Gov. Gary Herbert has vetoed HB332, which would have created a tax credit for individuals and corporations to fund a new program to award scholarships to families that want to seek services at private schools for their children with special needs.
Herbert’s action comes after multiple requests by state education leaders and organizations to veto the legislation.
HB332, sponsored by House Majority Whip Mike Schultz, R-Hooper, passed by five votes in the Utah Senate and was approved by the Utah House of Representatives by a vote of 46-24.
Asked to comment on the veto on Wednesday night, Schultz said the legislation was two years in the making.
“It created a system to allow special needs students and their parents the ability to make choices for their education. I’m saddened that the students who desperately need this as an option will not have the choice because of the decision by the executive branch to veto. I would have appreciated a dialogue with the governor before he made his decision,” Schultz said in a text.
HB332 also would have saved state and local education funding “which is extremely important in these uncertain economic times,” Schultz said.
The program would have been funded by a refundable tax credit so that individuals and corporations, in lieu of paying income taxes, could donate to a scholarship-granting organization that would provide scholarships to students with special needs. Donations would have been capped at $6 million to start.
For students in grades one through 12 who have an Individualized Education Program, the scholarship would have been $7,064, the value of two weighted pupil units in the upcoming fiscal year.
An Individualized Education Program is a legal document that defines how a public school plans to meet the unique educational needs of a child with a disability.
The scholarship program also would have been available to regular education students, although the scholarship amount was one weighted pupil unit or $3,592.
The bill’s fiscal note says the state could have experienced a net savings of $1,871 per student per year for each special education student that exits the public education system. School districts would also experience savings, estimated between $693 to $6,769 per student per year, depending on the amounts of local revenue spent per student.
The legislation would have required the Utah State Board of Education to oversee the program, including selection of a nonprofit scholarship granting organization.
The State School Board, the Utah Education Association, as well as the Utah School Boards Association and Utah School Superintendents Association and Utah PTA, each requested that Herbert veto the bill.
Sen. Lincoln Fillmore, R-South Jordan, carried the legislation in the Utah Senate.
“What we’re really doing is, is creating a more stable program for students with disabilities to be able to access choice when the public school system is not providing the level of education a student with special needs requires,” Fillmore said during Senate debate.
Critics said there was no need for another scholarship program in addition to the Carson Smith Special Needs Scholarship established 15 years ago.
The Carson Smith Special Needs Scholarship Program provides tuition assistance for eligible special needs students enrolled in eligible private schools. The scholarship is for students who would qualify for special education services in public schools, preschool through 12th grade, ages 3-21.
In a letter to Herbert requesting a veto of HB332, UEA President Heidi Matthews said the Carson Smith Scholarship Program has not reached full capacity.
“Rather than duplicating administrative efforts, any effort to increase access to private providers for special needs students should utilize the Carson Smith program,” she wrote.
Supporters of HB332 said Carson Smith scholarships are funded through the state’s General Fund, which relies on state sales tax revenues. According to legislative leaders, lagging sales tax revenues are contributing to a structural imbalance between the education and general funds.
The Libertas Institute, which supported HB332, expressed frustration at the governor’s decision to veto the bill.
“COVID-19 has clearly shown the need for education models that adapt to changing needs and provide flexibility for families in different circumstances. In that regard, HB332 was ahead of the curve. The future of education includes more customization and family empowerment — not less,” said Connor Boyack, president of the Utah-based Libertarian think tank.
Matthews’ letter to the governor described HB332 as “poor policy for public education.”
The legislation “shifts public money to private schools and providers through a voucher-like scholarship program using income tax credits and with little accountability to taxpayers,” Matthews wrote.
The State School Board voted during its recent meeting to ask Herbert to veto the bill.
Board members also voted during the legislative session to oppose the bill. During that meeting on Feb. 27, board chairman Mark Huntsman said HB332 would place “a tremendous burden” on the State School Board.
“The biggest challenge is that we’re starting to get into that voucher space,” he said.
Matthews wrote that the bill was amended to address some of the stakeholders’ concerns but it “did not address the fundamental problem of funding private schools and private providers with public dollars.”
She reminded Herbert that in 2007 Utahns voted 62% to 38% to reject a school voucher referendum. The referendum was defeated in every county in Utah.
“Voters resoundingly defeated vouchers in 2007 and we believe that the bipartisan opposition to HB332 in both the House and the Senate indicate the divisive nature of this program,” Matthews wrote.
