Big Wins for Students and Teachers in Congressional Spending Bill
December 18, 2015
Teachers advocating together across the country have accomplished three important victories in legislation that passed through Congress last week. These wins, part of a bill to fund the government and make certain parts of the tax code permanent, include additional funding for programs benefiting students and families, permanent status for the educator tax deduction, and a two-year delay of the excise tax on certain employer-provided health care plans.
Education programs aimed at creating more opportunities for children and families most in need have received nearly $2 billion in additional funding. These funding increases include:
- $500 million increase to Title I
- $415 million increase to IDEA / Special Education state grants
- $570 million increase to Head Start and restoration of $250 million in previously-passed cuts to Preschool Development Grants
Other programs receiving increases are 21st Century Community Learning Centers, Impact Aid, Indian Education, TRIO, Rural Education, and Child Care and Development Block Grants.
Every year educators spend sizable sums of their own money on supplies to support teaching and learning. The $250 above-the-line federal tax deduction for classroom supplies lessens that burden on teachers, and now, for the first time, that deduction has been made permanent and indexed to inflation. It will now also cover professional development expenses.
Educators are also receiving relief through a two-year delay to the excise tax on employer-provided health care plans included in the Affordable Care Act—meaning the tax will not take effect until 2020. Educators continue to push for a total repeal of this tax, but the delay at least provides needed short-term relief.
The excise tax is a poorly designed penalty requiring all health insurance benefits above $10,200 for individual coverage and $27,500 for family coverage to be subject to a 40 percent tax. The tax was meant to discourage plans that are high-cost due to overly-generous benefits, but instead punishes people living in high-cost-of-living areas and wrongly equates high premiums with generous health benefits.
Studies have shown that, in reality, the level of benefits in a plan plays less of a role in its cost than do the geography, age, and gender of plan participants. Health plans with a higher concentration of women tend to be higher-cost than plans that have more male participants, and the tax is indexed to general cost of living measures, not to growth in health care costs.