Congress Extends Educator Tax Deduction

Congress adjourned last weekend (December 9, 2006), finishing work on only a few items in the lame duck session and leaving much unfinished work for the 110th Congress, scheduled to begin January 4, 2007.

NEA secured several key victories in the closing days of the 109th Congress, including a two-year extension of the educator tax deduction. In the final days of the session, Congress:

• Approved a two-year extension of the $250 above-the-line tax deduction for educators’ out-of-pocket classroom supply expenses. The deduction, which expired at the end of the 2005 tax year, has now been extended for the 2006 and 2007 tax years. NEA will continue to push in the 110th Congress for an increase in the deduction amount.
• Approved a two-year extension of the NEA-supported Qualified Zone Academy Bond (QZAB) program. QZABs assist school districts in rural and urban communities by providing a financing mechanism to renovate buildings and invest in equipment and technology. Investors receive a federal tax credit equal to the amount of interest payable on the bonds, thereby relieving local taxpayers and municipalities of the interest burden. The program had expired at the end of the 2005 tax year, but has now been extended for 2006 and 2007.
• Failed to complete action on the Labor-HHS-Education appropriations bill for fiscal year 2007, choosing instead to pass a long-term continuing resolution (CR) funding programs at their fiscal year 2006 levels. The CR will be in effect until February 15, 2007. A CR at 2006 levels was perhaps the best outcome for education funding, given that proposed House and Senate bills for fiscal year 2007 both contained significant cuts in funding for key education programs. Funding decisions for 2007 will now be made by the new 110th Congress.
• Passed an NEA-opposed provision raising the income cap for families participating in the voucher program for the District of Columbia. The program currently serves families with incomes up to 185% of the national poverty level (NPL). The change raises the limit to 300% of NPL. Approximately 75 families would be impacted by the increased limit. NEA opposed the provision given its long-standing opposition to the underlying voucher program and the belief that funds would be better spent on strategies proven to maximize student achievement.
• Failed to reauthorize the Secure Rural Schools & Community Act, which provides a guaranteed payment to counties and schools in timber-dependent areas. NEA and its coalition partners had pushed for inclusion of the reauthorization.

Posted December 14, 2006