FRANKFORT, Ky. (LEX 18) — Kentucky lawmakers could opt Kentucky into a federal education tax credit program, reigniting a long-running debate over school choice and public education funding.
House Bill 1 would opt Kentucky into the federal program established by the One Big Beautiful Bill in Washington, D.C., allowing K-12 students to receive tuition and other educational assistance through scholarships funded by private donations.
Donors who contribute to Scholarship Granting Organizations, known as SGOs, can receive a federal tax credit of up to $1,700 per year. Those SGOs then distribute the money to eligible students through scholarships. The scholarships can fund a range of educational needs, including transportation, tuition, tutoring and technology.
Rep. Kim Moser, the lawmaker behind House Bill 1, emphasized that public school districts can establish their own SGOs, arguing the program benefits all Kentucky schools, not just private ones.
"It does not have to support a private school. I think that the public schools stand to benefit as much as anyone," Moser said.
Critics, however, argue the bill is another attempt to support school choice options at the expense of public schools, a concern rooted in years of school choice battles in Kentucky. Lawmakers have previously attempted to create funding mechanisms that would send Kentucky dollars to non-traditional public schools, including a state tax credit program for scholarships that public education advocates opposed as a diversion of public school funding.
Sen. Reggie Thomas said he sees House Bill 1 as a similar attempt.
"These kinds of programs negatively impact and are harmful to our public schools," Thomas said.
The U.S. Treasury and Department of Education said 23 states have already opted into the federal tax credits. Supporters warn that if Kentucky does not opt in, the state is leaving money on the table.
