Enhanced education savings bills passed out of Senate Education Committee
LANSING, Mich. — Legislation being advanced by State Sen. Patrick Colbeck was voted out of the Senate Education Committee last week that would offer a means of providing additional funding for education in Michigan without raising taxes.
Currently, students can participate in the Michigan Education Savings Program (MESP), which allows for limited tax-free contributions to savings accounts that can only be used for college. The new Enhanced MESP (E-MESP) accounts provided by the bills would extend the eligible uses beyond college to include K-12 school expenses and professional development.
“Current tax-advantaged education savings programs don’t go far enough because they can only be used for college,” said Sen. Colbeck, R-Canton. “The Enhanced MESP accounts are designed to help make education a lifelong pursuit in this ever-changing world. Eligible education services could include special education services, extracurricular activities currently not funded by schools, skilled trades preparation, and later-in-life professional development.”
Sen. Colbeck said he was surprised that Senate Bills 544-549 were opposed by the American Federation of Teachers-MI and several other educational organizations because they have traditionally wanted to see more money made available for education.
“I was disappointed by the testimony by AFT-MI in opposition to additional funding for education on the grounds that these additional funds would be controlled by parents rather than what they termed as ‘public direction,’” Sen. Colbeck said. “To make matters worse, they also took issue with cost transparency provisions within the bills saying that they were concerned with putting a ‘price tag on individual services.’”
In addition to the American Federation of Teachers-MI, the Michigan Association of Intermediate School Administrators, Wayne RESA, Oakland Schools, Michigan Association of School Administrators, Middle Cities, Michigan League for Public Policy, and the Barry, Branch, Calhoun, Jackson, Lenawee, and Monroe Intermediate School Districts opposed the legislation.
Participation in the Enhanced MESP program would be entirely voluntary for parents and public schools. Under the proposed legislation, the educational categories eligible for payments would not include what are defined as “core services.”
Core services are already provided free of charge to public school students under the Michigan Constitution. The list of eligible services would ultimately be defined by the Michigan Department of Education in accordance with the constraints of the Constitution. The Michigan Constitution prohibits the use of tax-advantaged funds to pay for tuition at private schools.
Under the law, funds from private sources such as businesses, charities, family or friends could be deposited into E-MESP accounts. These contributions would be exempt from taxation by the state of Michigan. Sen. Colbeck is also pursuing exemption from federal taxation with officials in Washington.
One of the private sources highlighted during the committee testimony pertains to businesses that contribute as much as $7,000 per year to the education of students participating in work-study programs. In addition to these funds, students earn valuable work experience and insight regarding where they may wish to focus future studies.
Michael Khoury, President of Detroit Cristo Rey High School, testified before the Senate Education Committee on how their work-study program works. As a parochial school, Detroit Cristo Rey would not be affected by the legislation, but Mr. Khoury testified as a means of demonstrating how the program might benefit public schools. Committee testimony describing a work-study program example can be viewed by clicking here.
SB 544-549 now head to the Senate floor for further consideration.