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Archive for Tuesday, April 27, 1999

SUPPORTERS AWAIT SENATE OK OF PLAN FOR COLLEGE SAVINGS

April 27, 1999

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— The proposed legislation is an acknowledgment by policy-makers here and nationally that higher-education costs for families have been climbing steeply the past few years.

Time is running out. But if the Legislature gets with it, many Kansans soon could earn significant federal and state income tax breaks by saving money for college.

Already passed by the House but stuck on the Senate action calendar is a bill creating the Kansas Postsecondary Education Savings Program.

The program would allow Kansans to create college savings accounts and earn tax-deferred interest on them while deducting up to $2,000 a year per designated beneficiary from their adjusted gross income, a sort of double-whammy tax break.

"It's true we're holding (the bill) up," said Carolyn Tillotson, a spokesperson for Senate majority leader and calendar boss Tim Emert, R-Independence. "Best he can say is it's a tax bill," which means it is a possible vehicle for other late-breaking changes in the tax code that lawmakers might like to insert in the waning moments of the wrap-up session that starts Wednesday.

Meanwhile, no one is offering assurances the bill ultimately will fly, even though 1997 changes in federal tax law have made the state legislation a possibility for almost two years.

The proposed legislation is an acknowledgment by policy-makers here and nationally that higher-education costs for families have been climbing steeply the past few years.

Between 1980 and 1997, according to Kansas Board of Regents, tuition costs at public universities rose 234 percent versus 82 percent growth in household income during the same period.

It costs the median Kansas family of four 12 percent of family income annually to pay the costs of sending one student to college, according to regents data. Also, nearly half of students at Kansas four-year schools will work between 15 and 33 hours per week to help make ends meet.

Federal student aid has been decreasing the past decade while the use of student loans has increased.

"A prime goal of a Kansas college savings plan must be to encourage savings thereby reducing the future debt load on students and their families," concluded last year's Kansas College Savings Plan Task Force, whose members included Kansas University Chancellor Robert Hemenway and Baker University President Dan Lambert.

The bill would put State Treasurer Tim Shallenburger in charge of administering the program. Shallenburger, who's pushing the bill, said he already is getting calls from Kansans who are putting money in college accounts elsewhere in states that already have them.

-- Mike Shields' phone message number is 832-7144. His e-mail address is mshields@ljworld.com.

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