SALT LAKE CITY — Qualifying Utah families experiencing intergenerational poverty could access up to $1,500 a year for educational expenses under a bill approved by a Senate committee Friday.
SB262, sponsored by Sen. Aaron Osmond, R-South Jordan, would allow working parents of modest means to apply for income tax reimbursements to be used for approved educational expenses in Utah's public education and higher education systems. Seventy five percent of the funds must be used for children's educational expenses.
The Senate Economic Development and Workforce Services Committee voted to send the bill to the Senate for its consideration.
Former state senator John Valentine, now chairman of the Utah Tax Commission, said the bill had the same "philosophical underpinning" as earned income tax credits extended by the federal government and many states, but not Utah.
According to the Internal Revenue Service, an earned income tax credit is a benefit for working people who have low to moderate income. It reduces the amount of income tax they owe and may also give them a refund.
Valentine said audits of such programs suggest many have been subject to "massive fraud."
Osmond said SB262, which took more than a month to draft because it would impact multiple sections of state code and involve at least four department of state government, has protections to prevent abuse.
Applicants can select qualifying education programs for themselves or their children, although no more than 25 percent could be spent on programs for adults. The Utah State Office of Education would pay for services up to $1,500 per academic year directly to providers.
The bill ties access to the funding to an individual's work effort, Osmond said. SB262 would allow the Department of Workforce Services to issue a certificate that verifies the individual qualifies for the tax reimbursement. The certificate would be filed with the individual's income tax return.
"These are working individuals. The are the working poor," Osmond explained.
The tax commission then provides a validation that can be presented to the Utah State Office of Education, which pays for the selected educational services.
"It's not tied to their (participants') tax liability. It does not diminish it or increase it," Osmond said.
The cost of the initiative has not yet been determined. Osmond said a fiscal note should be ready early next week.
While some, like Sen. Scott Jenkins, R-Plain City, said the administration of the program was complex and could add to costs, Osmond said the bill is structured to help ensure an ongoing means for the income tax reimbursements and to require effort on the part of applicants.
"There will be some personal skin in the game in getting this done," Osmond said.
Sen. Karen Mayne, D-West Valley City, lent her support to the bill, which builds upon the earlier efforts of retired Sen. Stuart Reid, R-Ogden, to break cycles of poverty and dependence on public assistance programs through new, data-driven approaches.
Annual research conducted by the Department of Workforce Services, which was required under Reid's legislation, indicates that more than 52,000 Utah children live in intergenerational poverty.
"I think this is a big deal. I think we need to move it to the floor of the Senate," Mayne said.