National School Choice Week Highlights Fight for Scholarship Tax Credits

FRANKFORT, Ky. — A push for scholarship tax credits at the state capitol Monday.

EdChoice Kentucky held a rally Monday morning to kick off National School Choice Week. 

Several schools from Kentucky attended the rally to push for scholarship tax credits in the commonwealth. 

A measure has been filed to create the program in Kentucky. Sen. Ralph Alvarado, R-Winchester, has filed Senate Bill 110 while Rep. Chad McCoy, R-Bardstown, is expected to file a companion bill in the House.

Senate Bill 110 caps the annual tax credit amount at $25 million for the first fiscal year, however that cap could increase in the following year by 25 percent if the value of credits awarded is at least 90 percent of the annual credit available that year. Each individual or scholarship-granting organization acting on a taxpayer can get a credit for up $1 million of donations annually. The scholarships are then used to help pay tuition at private schools. 

Proponents say since scholarship tax credits are donations from corporations or individuals it does not take any money away from public schools. 

“Scholarship tax credits don’t rely on any public funding but are scholarships granted to students through charitable donations,” Alvarado said. “Corporations or individuals that contribute to a scholarship granting organization would receive a partial tax credit.”

Opponents including the Kentucky Education Association say scholarship tax credits do take away from public school funding because less money is being put into the General Revenue Fund because organizations or individuals are paying fewer taxes.

“Anytime that you allocate money from the general funds that’s one less dollars that’s going to be allocated for some other project,” said Eddie Campbell, President of KEA. “For our public schools that’s one more dollar that’s not being invested in our public schools.”

Supporters also say allowing scholarship tax credits will enable low-income students or those with disabilities to have a chance for better education.

“For the sake of our children we must all embrace that regardless of background, belief, wealth or race Kentucky children should have access to an education that meets their needs,” said Attorney General Daniel Cameron. “We must not allow a family’s socioeconomic status to prohibit a child from receiving the education that is best for him or her.”

For families to be awarded the scholarship they would need to apply through one of the scholarships granting organizations who provide the scholarships based on need. 

“They have to meet some qualifying standards, so kids in foster homes, kids with disabilities, children that are below 200 percent of the poverty level are the ones who would qualify for this,” said Sen. Alvarado. “If you have someone who is wealthy they are not going to qualify for this.”

KEA says further investment in public schools should be looked into to ensure all schools no matter the location is providing the best education they can instead of providing more tax breaks to corporations.

“A scholarship tax credit is basically just a voucher, and it’s a voucher program that offers corporate welfare for large corporations,” Campbell said. “Anybody can donate to a private school directly now so we don’t need a special bill for that.”

Legislation has been proposed the past several sessions including the 2019 session.