ACTE has previously reported on congressional efforts to pass a tax reform bill, first by covering a House proposal, then by recapping a Senate proposal, and finally by previewing the issues that a conference committee was tasked with reconciling between the two versions. Throughout the process, ACTE shared our concerns with lawmakers. On Wednesday, the House adopted a version of the bill that the Senate had passed hours earlier. The bill is now headed to the President Trump’s desk, and he has said that he intends to sign the measure.
Some of the provisions that ACTE originally identified as troublesome for the CTE community were not included in the final version. This includes the elimination of the deduction for educators’ classroom expenses, which was left untouched and will still allow an annual deduction of up to $250. However, two large items remain that could have a significant impact on the CTE ecosystem.
First, the bill caps deductions for state and local property and income or sales taxes at $10,000. Such a cap will put pressure on many states and localities to reduce their taxes, which in turn could decrease funding for public education, including CTE. In fact, estimates predict similar changes to deductions for state and local taxes could cost public schools hundreds of billions of dollars and put hundreds of thousands of education jobs at risk.
Additionally, the bill is estimated to cost up to $2.2 trillion over 10 years. Such a cost will likely compel funding cuts to other areas, including in non-defense discretionary spending, which includes education. Perkins funding has already been slashed by 13 percent over the past decade, without accounting for inflation. At a time when CTE funding has flatlined, ACTE opposed the tax bill which could further threaten funding.
If the president signs the bill before the New Year, the law would take effect on January 1, 2018.
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