Governor Terry Branstad (R-IA) signed HF 625 today, which includes an increase to Iowa’s School Tuition Organization (STO) tax credit program from $8.75 million to $12 million, at Des Moines Christian School. It also expands who can receive the tax credit after donating to include subchapter S corporations and LLCs.
The School Tuition Organization program was created in 2006 after passing the Iowa Legislature with bipartisan support and then was signed into law by former Governor Tom Vilsack. Today’s increase is the largest since the program’s inception. STOs were then created to provide need-based scholarships for students attending one of Iowa’s accredited non-public schools. Those who donate to an STO receives a tax credit of 65% of the amount they donate. According to Trish Wilger of Iowa Advocates for Choice in Education 10,600 students received scholarships from STOs during the 2012-2013 school year. The expansion of the tax credit will enable STOs to offer more scholarships as more donors will be able to receive the tax benefit.
The bill passed unanimously in both the Iowa Senate and Iowa House. It was initiated by State Representative Tom Sands (R-Wapello), and then floor managed by State Representative Chris Hagenow (R-Windsor Heights). Senate Majority Leader Mike Gronstal (D-Council Bluffs) and State Senator Joe Seng (D-Davenport) ushered it through the Iowa Senate.
Governor Branstad, in his remarks prior to signing the bill, noted that it had been a banner year for school choice in Iowa. He said HF 215, which he signed last week, contained some of the most significant school choice provisions ever considered in this state. He specifically mentioned independent accreditation for private schools. He said, “This will allow private schools to bypass the burdensome government accreditation process when they choose another reliable accrediting body. These independent accrediting organizations often have even more rigorous standards than the Iowa Department of Education.”
You can watch his remarks below: