2020 Bills

A New Special Needs Scholarship Program

In the past we’ve shown the need to expand or build upon the success of the Carson Smith Special Needs Scholarship. Families have been able to engage in life-changing education services for their children. The evidence is clear that the small amount of funding that has been provided to this program has gone a long way.

The problem was that the Carson Smith Special Needs Scholarship barely serves 1,000 students a year, though upwards of 80,000 public education students are classified as special needs. To add insult to injury, the Carson Smith Scholarship relies on limited line item appropriations and is funded using a dead end revenue source, the general fund.

So a new funding model was needed. Representative Mike Schultz’s House Bill 332 created an individual/corporate tax credit that would be used to fund a new scholarship program for special needs students.

Instead of removing funding from the general fund or education fund, the end result of these tax credits would actually be a net positive for the amount of per-pupil spending for Utah students.

The program would be administered by several scholarship granting organizations that would find taxpayers interested in donating to the program. These same organizations would be tasked with providing funds to families of qualifying special needs students for educational support.

Unfortunately after HB 332 passed both the house and senate, it was vetoed by Governor Herbert. At that point, Rep. Schultz continued to work with the Governor’s Office to find a solution that the Governor would be willing to sign. 

This produced House Bill 4003 and the Legislature was called back into special session to pass the bill, which Rep. Schultz and Senator Lincoln Fillmore sponsored. The program is scheduled to be up and running next year so that students can start taking advantage of these scholarships for the 2021-2022 school year.

You can learn more about this program at libertasutah.org/specialneeds and the answers to some frequently asked questions about HB 4003 can be found below.

Is this tax credit scholarship capped and if so, how will it grow?

This new special needs scholarship caps how much each taxpayer could give at $1 million and caps the overall program at $5,940,000. Built into the program is a growth mechanism that allows that overall cap to increase each year there is sufficient demand for the scholarship program. If a 90% threshold of donations is reached in relation to the cap, then the cap itself will increase 10% next year.

Would this program just be for private school tuition?

No, this new special needs scholarship would operate as a Flexible Education Spending Account. Parents would be able to spend the money on a variety of educational products and services that would best benefit their child.

Who would be eligible for this scholarship?

The same conditions that currently allow a student to qualify for an IEP (Individual Education Plan) are used to determine who would be eligible as outlined by federal law.

What are some examples of what products and services the scholarship could be used for?

The following isn’t an exhaustive list: tutoring, online classes and/or curriculum, private school tuition, educational therapy, mentoring, textbooks, specialized software, and equipment.

What would the amount of the scholarship be?

Students exiting the public school system would be eligible for a maximum scholarship amount depending on household income:

185% of poverty or less: over $9,000 (2.5 WPU)

555% of poverty or less: over $7,000 (2 WPU)

More than 555% of poverty: over $5,000 (1.5 WPU)

Students that are already in a private school or homeschooled would be eligible for scholarships up to around $3,700 (1 WPU). These caps would automatically adjust year to year as the WPU is adjusted.

About how many students will be served by the program initially?

Up to nearly 1,000 students can be served by the program at its current capacity, but that amount can grow over time.

Who would oversee these non-profit organizations that would grant the scholarships?

The State Board of Education and State Tax Commission would oversee the scholarship granting organizations. Yearly reporting as well as periodic audits are required. HB 4003 provides additional funding to the State Board of Education to oversee the program. It also calls for a feasibility study at a future date to determine whether or not this new program can be combined with the Carson Smith Scholarship program in the future.

How would families actually be able to use these funds?

In other states that use these kinds of funding models, there are three primary ways funds are dispersed: debit card, a third-party “marketplace” app, and traditional physical checks.