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Committee advances plan to let taxpayers direct federal tax credits to scholarships for public schools
Summary
A bill implementing the federal 26 USC §25F change would allow Tennessee taxpayers to direct about $1,700 per person to scholarship-granting organizations usable for public or private school education expenses; sponsor said full implementation could yield as much as $120 million annually for local education programs.
Leader Lambert explained HB 2187, which implements a federal change to Internal Revenue Code section 25F to permit a portion of federal tax dollars (roughly $1,700 per individual in the sponsor’s description) to be designated to scholarship-granting organizations that can award funds for education-related expenses. Lambert said the program could benefit public schools, not just private-school payers, and estimated the policy could produce as much as $120 million a year for Tennessee if widely used.
Representative McKenzie and others asked how the funds would be distributed and whether public schools could access the funds through scholarship-granting organizations; the sponsor said the money flows to scholarship-granting organizations (SGOs) that then award scholarships for authorized uses such as after-school programs, tutoring, instructional materials and certain technology. Lambert said the fiscal note projects little state-level impact while local schools could see meaningful gains.
The committee moved the bill to Government Operations (18 yes, 0 no, 1 present-not-voting). Questions for later stages include rules for SGO administration and auditing, and whether allocations could be targeted to an LEA or individual school.
