Legislative Update: Opportunity Scholarships

Marcos Lopez

Join Marcos Lopez as he discusses the Interim Finance Committee’s hearing this week on Opportunity Scholarships.

  • How we got here – a brief recap of why the Interim Finance Committee was hearing Opportunity Scholarships;
  • Why Opportunity Scholarships are important and what could be done to save the program now; and
  • What we learned from the hearing and what we can expect for Opportunity Scholarships in the future.

Read the Transcript

Well, hello, everyone. Welcome to Under the Dome by Nevada Policy. It is August 11th, 2023. I am your host, Marcos Lopez, your Outreach and Coalitions Director. It’s been a little while since we’ve chatted. Since then, there’s been a lot of developments on the Opportunity Scholarship front. A crisis has arisen, and that will be largely what we focus on today’s episode.

The Interim Finance Committee met on August 9th, this past Wednesday. It was the fifth meeting of 2023 and the post the end of the 82nd legislative session.

Here’s a little bit about the Interim Finance Committee for those that aren’t aware. It is a committee that’s made up of the Senate Committee on Finance and the Assembly Committee on Ways and Means from the preceding sessions.

That means that is a 21-member body that basically administers the constituency fund for provisional funds for the states. They approve any grants or gifts that the states accept as well as make tweaks to the budget overall that was approved by the legislature to be able to adjust it as circumstances changes.

It’s important to note that Nevada Policy, as well as former Governor Gibbons, have questioned the constitutionality of IFC, as it’s known, since it likely violates the Constitution due to the fact that it is a 21-member body that does not constitute a legislative majority, adjusting the budgets. This leads to situations where districts not represented on the committee are likely disenfranchised under the interpretation of the Equal Protection Clause of the Constitution.

Of course, the downside if this argument were to succeed in legal court would be that it would likely open the door to a full time legislature or at least more frequent special sessions be able to adjust as budgets move along.

So how do we get here today? The journey to Wednesday. Here’s a quick little timeline is as follows. At the conclusion of the 82nd legislative sessions, Democrats refused to hear two bills seeking to expand the program. One of them was carried by Senate Minority Leader Heidi Gansert up north, and the second was an original format of Assembly Bill 400, which was the Governor’s education proposal.

This caused a drop in funding from the program from last legislative session, sending a signal to the market that the program is in danger. Since the last few sessions, there have been only one-time allocations, and there’s been a move to try to restrict and claw back the program.

As a new fiscal year began in July 2023, a statutory cap of approximately $6 million credits become available to be claimed on a first come, first served basis. One organization, the AAA Scholarship Foundation, arrived on the first day with enough committed donors to claim the full amount available. As a result, the other five SGOs, or scholarship granting organizations, were unable to claim any amount.

This quickly caused a crisis where upwards of 600 students could potentially lose their scholarships. Late last month, Lombardo filed a proposal to IFC to use approximately $3.24 million of unallocated federal COVID-19 federal funds from the American Rescue Plan Act or ARPA to keep help keep these students in their schools.

This all led up to the hearing this past Wednesday, where a party line vote rejected the proposal. In many regards, this is kind of what we expected heading into this meeting. The Democrats have tried everything they could to try to make sure this program does not succeed. It’s in their interest politically because their main donors, CCEA and NSCEA, oppose this program.

And when it comes to the whole concept of education, they’re really tied to an old mentality of what education means. An education of a brick schoolhouse type of mentality where everyone goes in and they just go to the public school system and then they kind of exit.

That is not the education of the 21st century. That is not where we’re heading. And it’s an outdated mental model which they’re still clinging onto.

What we mainly can walk away from this meeting is that Democrats tried everything they could to shift the blame away from themselves. And this is after we know that they refused any single consideration to try to expand and keep funding at this program at the level it is. They in many regards created the conditions that led to this outcome.

Since its inception in 2015, this has been an extremely popular program. Thousands are consistently on wait lists. And session after session, we have gone to the legislature to ask for this program to be expanded to bring on the students on the waiting list.

We know that this is a highly sought after program in part in due because of the success and the opportunity to present students being able to attend a private school of their choice that better fits their needs. But also it is because of the complete and other failure and disaster that CCSD is. And it’s not just CCSD. There are students all across the state that use these opportunity scholarships to be able to go to the school of their choice.

Now, as we kind of look over the past few legislative sessions, it’s not just the attacks. It’s the leverage that they have used this Opportunity Scholarship bill to try to get Republicans to vote for certain tax increases. And usually what this means is that a one-time allocation has been given to this program for the last few different sessions. This means that there are more students joining the program than what is statutorily minimally required for these programs.

What does this signal? Basically, it tells the SGOs that this program is in danger and that they need to line up as soon as possible to get that money. When these market singles are interpreted, you can’t really blame the AAA Scholarship organization for following the law and being successful at securing donations for these tax credits. Here is an organization that has gained the trust of multiple donors that they’re able to collect this money and get it out students within the school of their choice.

What the Democrats were basically suggesting during this hearing is that they were a greedy organization from Florida that was coming in and taking advantage of this system just to keep the money themselves and their reserves. But it’s almost comical because at the same time that they’re doing this and attacking this organization for being good stewards, they were attacking the other SGOs for not being good enough stores and not having enough money in their reserves.

But as I wrote in my commentary that was published on Nevadapolicy.org, this is not the fault of Lombardo. This is not the fault of the AAA Scholarship Foundation. If or when these students lose access to their schools and are forced back into their failing government schools, it will be because the Democratic controlled legislature continues to place politics over policy. They continue to focus on the special interests that donate to their campaigns than over students.

As Senator Dr. Titus correctly pointed out at that hearing, if just one of the two bills would have even gotten a hearing, we could have had a discussion of how to adjust this first come first serve. How can we make the policy of this program even better to make sure that we have more opportunity?

But that brings us to the point that up ahead, we have danger and opportunity. This hearing will make it more likely that the Democrats will be open to a hearing on Opportunity Scholarship’s next legislative session to try to change the first come, first served language.

This does present an opportunity to increase funding for the program, but there is risk that regulations and burdens are added to the SGOs, potentially hampering the success of the program. I don’t expect them to give up any more money for the program without trying to hamper them in some way.

So this is going be a pretty quick briefing today. But before we wrap up, I do want to commend Lombardo’s chief of staff, Ben Kiefer, who was grilled with a barrage of questions, and he handled them with admirable poise. The man was definitely calm, cool and collected, despite the pressure he was under.

It was a long hearing. I mean, he was probably testifying for two hours before the SGOs even came in to get a turn before the committee.

And lastly, we need to give credit to Governor Joe Lombardo for forcing the hearing on this pressing issue. This got the Democrats on the record that they oppose this program. This showed the public how far they’re willing to go to maintain the educational cartel that is currently failing our communities.

So as we move forward, that is the item to keep an eye on. See what bill is introduced next legislative session to tinker with this program and what other funding can we secure to it.

Lastly, I have a few housekeeping items before we let you go. Under the Dome will continue to move forward covering what’s happening in the interim committees. It will likely not be a weekly update since the committees do not meet on a weekly basis, but rather a monthly update following the events of the interim committees.

We do plan to do the occasional webinar to catch up with legislators, lobbyists and other organizations in the legislative and executive branches to kind of make sure you guys are all keeping up to date with what’s occurring in Carson City.

Thank you for listening.

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Marcos Lopez

Marcos Lopez

Policy Fellow

Marcos Lopez serves as a Policy Fellow for Nevada Policy. For over a decade, Marcos has fought to advance free-market principles, limited government, and secure individual rights through electioneering, lobbying, and grassroots mobilization at all levels of government across nine states and Washington D.C.

Originally from Miami, Marcos moved to Nevada in 2015 and has lived in Reno and Las Vegas, where he currently resides. His main areas of focus include economic opportunity, criminal justice reform, and school choice. Marcos’ work and efforts have been recognized and featured in The New York Times, The Las Vegas Review Journal, The Nevada Independent, This is Reno, and The Nevada Current.