Washington Monthly - September/October 2021 - 28

board from 2013 until 2016, when he successfully ran to become
a state senator.
Vargas attributes his interest in service and education
to his parents, who immigrated from Peru to New York City,
where Vargas was born. He recalls growing up as a " free and
[reduced-price] lunch kid " in elementary through high school.
He was a Pell Grant recipient, and only the second person in his
family to go to college.
" My parents sacrificed a lot for us and always taught us
that education was really important, but also that it was important
to give back to communities like ours, " Vargas told me.
Service leaders and higher education leaders in Nebraska
are excited about the change, which they say is both right on the
merits and good for the state's economy. " AmeriCorps members
do so many great things for our country, and in thanks for
their service, we hope to help make higher education more affordable
in any way we can, " says Cathleen Plager, executive director
of ServeNebraska, a commission on volunteer service in
charge of coordinating federal grants for AmeriCorps projects
in the state. Plager told me that since 1994, when AmeriCorps
began operating, Nebraska has had 11,765 members serve in
the state, and all of them have received a Segal AmeriCorps
Education Award-a Pell Grant-sized cash gift they can use
for classes, student loans, and other additional expenses. (In
2021, a Segal award was worth $6,495.) Citing information from
the AmeriCorps federal agency, she said $37 million of all Segal
awards have been paid to Nebraska colleges or loan institutions.
Vargas and others hope the law will encourage even more
AmeriCorps members to study in the state, bringing in fresh
talent and dollars.
Ted Carter, president of the University of Nebraska system,
is also excited about the new law. " The University of Nebraska
system was proud to support state legislation recognizing
the service of AmeriCorps alumni and expanding access
for them to attend our university's campuses, " Carter
says. " With this legislation, we have new opportunities to
attract talented, service-oriented students to Nebraska-a
game changer for our workforce and the economic competitiveness
of our state. "
It isn't the only legislation Vargas has introduced to help
AmeriCorps recipients. In August 2020, the governor signed
into law a bill crafted by the state senator that excludes Segal
awards from state income taxes. In doing so, Nebraska joins
Iowa, which already exempts the awards. Many federal lawmakers
want the national government to do the same. To that end,
in June 2021, a bipartisan group of congressional representatives
introduced the Segal AmeriCorps Education Award Tax
Relief Act.
Shirley Sagawa, who drafted the legislation that created
AmeriCorps during the Clinton administration, supports
the change. She says making the Segal awards tax-exempt is a
commonsense policy goal that would alleviate an unnecessary
hardship for AmeriCorps volunteers. " Imagine that you have
spent the year scraping by on [a] poverty-level stipend in order
to serve your community and earn money for college, " Sagawa
28 September/October 2021
told me. " You use your education award for tuition. Then you
get hit with a tax bill of hundreds or even a thousand dollars. "
She argued that the resulting financial burden " undermines the
ability of individuals to participate in AmeriCorps if they don't
have family money. "
It's not just the tax bill that has advocates upset. As Sagawa
explained, AmeriCorps volunteers cannot have their taxes
deducted from the award itself. " You have to come up with
cash, " she said. " How is that fair? "
There's plenty of precedent for making federal education
gifts tax-exempt. The GI Bill, for example, didn't require recipients
to pay any taxes on what they received. But Congress has a
long track record of trying and failing to do the same for Segal
grants. Sagawa told me that when first drafting the legislation
to create the program, the goal was to make the award tax-free.
But doing so would have complicated the legislation's passage
by sending it to a knotty array of congressional committees. " It
was not included for jurisdictional reasons, " she said.
Representatives didn't give up. " To my knowledge, the
first time federal legislation was introduced to exclude the
AmeriCorps Education Award from federal income tax was in
2001, " says Jennifer Ney, the vice president for public policy at
City Year and the managing director of Voices for National Service,
a coalition that advocates for national service organizations.
The Call to Service Act, which would have exempted Segal
awards, was repeatedly introduced from 2008 to 2019 by a wide
collection of representatives. Over the years, Representative
John Lewis and Senators Orrin Hatch, Ted Kennedy, and Chris
Dodd have all taken up the cause. Ney says she is at a loss as to
why the legislation has continuously failed.
Segal recipients, meanwhile, remain frustrated. " When
you're coming out of AmeriCorps, you typically don't get a lot of
money or income, " explains Rebecca Charles, a former AmeriCorps
volunteer at a K-8 school who clocked more than 50
hours a week helping students. " At the end of the year, when
you're filing your taxes, you kind of forget that this is considered
income and so you don't necessarily plan for it when it
comes to paying taxes. "
Congressional legislation would have broad ramifications.
Experts say that making Segal awards federally exempt would
also likely make them exempt at the state level, changing the
playing field. It's part of why advocates are so keen on getting
Congress to act.
But until it does, and until other states make their universities
more financially accessible to AmeriCorps alums, Nebraskan
policy makers appear happy to welcome more serviceminded
residents.
" I brought these bills because I want to make it easier
for people to serve in AmeriCorps, " Vargas said. " But I also
want to make it easier to get these amazing leaders that have
served to then come into the state of Nebraska and see this as a
potential home. "
Jamaal Abdul-Alim is a longtime education journalist-and an avid
chess player-who resides in Washington, D.C.
Washington Monthly - September/October 2021

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