Oregon House approves tax credit for substitute teacher licensing fees

On January 17, 2025, the Oregon State Legislature introduced House Bill 2579, aimed at addressing the ongoing shortage of substitute teachers in the state by providing a financial incentive for individuals seeking to obtain their substitute teaching licenses. The bill proposes a new income tax credit that would cover the licensing fees required for substitute teachers, effective for tax years beginning January 1, 2026, through December 31, 2031.

The key provision of House Bill 2579 allows both resident and nonresident individuals to claim a tax credit equal to the amount paid for licensing fees to the Teacher Standards and Practices Commission or a comparable regulatory body. This credit is designed to alleviate the financial burden on prospective substitute teachers, thereby encouraging more individuals to enter the profession. However, the credit cannot exceed the taxpayer's total tax liability and cannot be carried forward to subsequent tax years.

The introduction of this bill comes amid growing concerns about the declining number of substitute teachers, a situation exacerbated by the COVID-19 pandemic and ongoing educational challenges. Proponents argue that the tax credit could help attract new substitutes, thereby improving the overall quality of education in Oregon schools.

Debate surrounding the bill has focused on its potential effectiveness and fiscal implications. Supporters emphasize the need for immediate action to address staffing shortages, while critics question whether the tax credit will significantly impact the number of individuals willing to pursue substitute teaching. Some lawmakers have suggested amendments to broaden the scope of the bill to include additional incentives for long-term educators.

If passed, House Bill 2579 could have notable social implications by enhancing educational stability in Oregon, particularly in underserved areas where substitute teachers are critically needed. The bill is set to take effect 91 days after the adjournment of the 2025 regular session, pending further legislative discussions and potential amendments. As the bill progresses, its impact on the educational landscape and the state's budget will be closely monitored by stakeholders across Oregon.