Emails obtained by Complete Colorado suggest a new bill to tinker with college savings accounts faces problems, not the least of which may be the bill sponsor’s understanding of the situation he’s attempting to remedy.
Sen. Mike Merrifield (D – Colorado Springs) is putting forth a bill that would boost the tax deduction a lower income family can claim for every dollar they put into a 529-style savings account. Usually just known by the shorthand name “529s,” the investment vehicles are savings accounts with tax incentives to encourage fiscal planning for higher ed expenses like tuition and books.
The emails say Merrifield is unaware of the cost of college, and that his bill would produce a meagre savings of $4 a year for some 529 savers.
CollegeInvest is the 529 investment vehicle run by the state of Colorado. In a January 20 email to her colleagues, CollegeInvest CEO Angela Baier described a meeting in which she was dropping off information to Merrifield.
…overall I think it was a positive conversation. He was unaware of the cost of college, how much student loan debt the 100K+ families are accumulating, our Matching Grant program, and that his proposal would only put an additional $4+/- in those families’ pockets, etc. He said he wished he had this information earlier.
“[U]naware of the cost of college,” can hardly be seen as a compliment when your bill is focused on college finance.
Merrifield’s office did not return calls and emails requesting comment.
The entire discussion thread, obtained under a Colorado Open Records Act request, was started when Baier emailed Lt. Governor Joe Garcia about potential problems of President Obama’s recent idea to tax withdrawals on 529s. The President’s plan has since been withdrawn.
When discussing the Obama plan, Baier mentions the possibility of “unintended consequences of Merrifield’s proposal of removing the state tax deduction for 529s for the lower-middle class.” Removing the deductions for the lower-middle class, however, doesn’t appear to harmonize with the first bill posted on the General Assembly’s website. While officials at CollegeInvest answered an initial set of questions we posed to them, when we pressed for clarification on this issue, they stopped their communications. Democrats have adopted a message that their 2015 efforts in the General Assembly will be largely aimed at trying to help middle class families.
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