Senate passes $50 million refundable tax-credit program for parental school choice after divided floor debate

BOISE, Feb. 19, 2025 — The Idaho Senate passed House Bill 93 on Wednesday, approving a refundable income-tax-credit program that would allow eligible parents to claim up to $5,000 per child (or up to $7,500 for children with disabilities) for qualified education expenses paid to nonpublic schools, micro-schools, learning pods and similar providers. The program is capped at $50 million statewide.

Senator Dan Hartog, sponsor of the bill, said the credit is refundable, is intended to expand parental choice, and is structured so the Idaho State Tax Commission administers applications during a 60-day window. The bill prioritizes families at or below 300% of the federal poverty level for both approval and access to a one-time advance payment option. Hartog said parents must incur actual qualified expenses to qualify and must retain documentation: the Tax Commission will be authorized to audit and the Legislative Services Office will run a parent satisfaction and engagement survey.

Hartog described the measure as an effort to increase opportunity and to preserve parental accountability while including guardrails such as auditability, recapture of credits in case of misuse and criminal penalties for tax fraud. He cited U.S. Supreme Court precedent related to school-choice programs and argued that other states’ choice programs have not caused public-education funding to decline.

Opponents warned the bill lacks sufficient transparency and accountability and could enable discrimination and fraud. Senators Ward Engelking, Guthrie, and others argued the program places administration with the Tax Commission (which audits a small share of taxpayers) and provides limited public reporting, raising concerns about whether taxpayers could track how money is used. Multiple senators raised concerns about special-education funding shortfalls and about private schools’ right to set admissions policies; one senator read a constituent letter reporting an instance of religious-based admissions discrimination.

Other objections included the program’s fiscal structure: opponents said tax-credit programs are taken outside the ordinary budget process, reducing visibility for appropriators and potentially diverting funds from public needs. Proponents said the program returns money to parents who already pay taxes supporting public schools and argued competition would spur innovation and better outcomes for some students.

After extended debate and multiple members’ speeches for and against the bill, the Senate recorded a roll call vote of 20 ayes and 15 nays. The bill passed the Senate and will be transmitted back to the House.

Key mechanics in the text: refundable credit up to $5,000 per child ($7,500 for children with disabilities); program cap $50,000,000; 60-day application window; prioritization of families at or below 300% of FPL; tax-commission administration with audit authority; parental retention of records and civil/criminal penalties for misuse; Legislative Services Office parent survey and required reporting to the legislature.

Why it matters: Proponents said the program expands parental options and can assist families seeking alternatives to public schools; opponents said the cap and administration model still pose transparency and equity concerns, especially for rural communities and students with disabilities.