By Della B. Cronin

Before leaving Washington, DC, for the holidays last month, Members of Congress gave President Donald Trump the Christmas gift he wanted—the passage of a tax reform bill. The bill, its development, debate and content received lots of coverage in the media, but educators were particularly concerned about several provisions.  

First, the tax bill changes how deductions for state and local tax work. It imposes a new, $10,000 cap on those deductions—taxpayers can choose to deduct that amount in either property or sales taxes they pay, or property and income taxes. Critics of the provision—including education groups--say decreasing these federal deductions could ultimately lead to depressed state and local funding for K-12. 

Second, after much high-profile debate, the $250 deduction teachers and others can take for spending their own money on classroom resources is in the final bill.

The bill would also allow parents to use 529 college savings plans for K-12 expenses, including private school choice, as well as postsecondary costs. The bill does impose a $10,000 limit on the funds people can set aside for K-12 expenses in these plans.   

Regarding school construction, the new law ends what are known as qualified school construction bonds and Qualified Zone Academy Bonds, which are tax-advantaged tools that can help reduce total capital costs for schools—the latter are particularly important to charter schools. Also, the bill would end advance refunding bonds, which are used to pay down long-term debt at reduced costs. 

As for other provisions of the bill, the STEM and research communities were pleased that the final package retained a number of tax benefits for student loan borrowers and rejected a proposal to tax tuition benefits paid to graduate students and others. Given the speed with which the bill was developed and passed, and the fact that its provisions are effective January 1, 2018, many will be watching implementation of the bill very closely. 

As for resolving federal spending for FY 2018, Congress just wasn’t up to the task before leaving town for the holidays.  They passed yet another temporary spending bill that will expire January 19th.  The education community hopes that a final bill increases spending caps on domestic spending—a demand that Democrats are insisting on if Republicans want to see any defense spending growth.

In December, the House did take the first step toward reauthorizing the Higher Education Act as well.  It was last reauthorized in 2008, with the passage of the Higher Education Opportunity Act, which was actually a budget reconciliation package that also included most of what has become to be known as Obamacare. The statute’s revision is overdue. On December 1, 2017, House Education and the Workforce Republicans, led by Chairwoman Virginia Foxx (R-NC), unveiled the first comprehensive reauthorization proposal in what is sure to be a very lengthy process. The 524-page Promoting Real Opportunity, Success, and Prosperity through Education Reform Act, known as the PROSPER Act, is a partisan bill that embraces many Republican principles. It largely streamlines and simplifies federal higher education programs, and reinforces the assertion that not all students are best served by the pursuit of a four-year degree by proposing a significant new investment in apprenticeships. The bill also is a reaction to what Republicans view as aggressive regulation of higher education programs and institutions and clearly takes aim at some Obama-era regulatory proposals. 

The K-12 education community is particularly troubled by the plan to eliminate the Title II Teacher Quality Partnership grant program. The bill effectively repeals and replaces Title II, turning it into an apprenticeship program. The new Title II, Expanding Access to In-Demand Apprenticeships, contains a $183 million grant program under which the Secretary of Education may award 1-4 year grants of up to $1.5 million to eligible entities for “earn-and-learn” work. This theme can be found throughout the new higher education bill, which also dramatically expands the federal work study program as part of the “One grant, one loan, one work study” mantra. A potential justification for the practical elimination of the program dedicated explicitly to teacher preparation is that teaching could qualify as an in-demand sector under the new Title II. That is a decided shift. To wit, there are 367 mentions of the word “teacher” in current law; it is mentioned only 6 times in the PROSPER Act. It is worth nothing, however, that some aspects of an initiative included in the last HEA reauthorization and specifically aimed at establishing or enhancing programs of teacher education and teacher quality has been moved to Title III, the section of the law focused on minority-serving institutions (MSIs).  

The bill was passed by the Committee after a 13-hour markup on a partisan vote.  Supporters hope to see the bill on the House floor in 2018, but it’s unlikely that the President will see an HEA bill before 2019—at the earliest.

At the end of January, NCTM and the education advocacy community will get an idea of what lies ahead when President Trump delivers his second State of the Union address on January 30, 2018.  That speech will presumably provide insight into the FY 2019 budget request that will come in February.  Here’s hoping that the FY 2018 budget is done by then.