Committee advances overhaul of education tax‑credit program; sponsor says it expands transparency, critics say it cuts scholarships

Representative Rivera introduced House Bill 26 32 to the House Education Committee and framed it as a consolidation and transparency effort for the Commonwealth’s education tax‑credit programs.

"This bill sheds light on for whom, how, and where the EITC dollars are spent and ensures that the money goes toward the seemingly intended audience, our students in low socioeconomic situations," Representative Rivera said, summarizing the measure that would end approvals under the current EITC structure after the 2026‑27 year and, beginning in 2027‑28, replace existing EITC and OSTC programs with a new education options tax credit while maintaining an overall $680,000,000 cap.

Why it matters: The bill redirects unused portions of the current five‑program EITC umbrella into active use, creates reporting requirements for nonpublic schools (tuition, admissions policies, financial aid rules and enrollment data as a condition of participation), and imposes new oversight steps for the Department of Community and Economic Development, the Department of Education, the Auditor General and the Independent Fiscal Office.

Proponents said the change will expand access for younger children and improve accountability. Representative Rivera said the bill will allow contributions to scholarship granting organizations (SGOs) and maintain the $680 million overall cap while carving the pool into targeted subcaps for scholarships, educational improvement programs, early childhood scholarships and economically disadvantaged scholarships.

Opponents raised concrete numbers and timing concerns. Representative D’Arcy said the measure was unveiled on a Friday and that the committee was voting days later; she asserted, "This bill would cut scholarships by $102,000,000 and take away scholarship opportunities for 30,000 students," and said she would vote no.

Several members questioned whether dollars reallocated under the bill could be used for facility renovations or other non‑scholarship purposes. Representative Gleim pointed to specific bill language that, she said, allows reconfiguring or equipping public school facilities and worried the money might not go directly to students. Representative Anderson relayed visits to multiple schools that rely on EITC funds and said some schools told her they would close without current EITC support.

Staff summarized oversight features: the Independent Fiscal Office would publish performance reviews of scholarship programs every five years, and the Auditor General would conduct compliance audits; the tax code (Article 17‑A) already gives the Department of Revenue authority to require independent audits under certain conditions.

Vote and next steps: On a roll call the committee recorded 14 ayes and 12 nays and passed HB 26 32 out of committee. There were no amendments adopted in committee. The bill now proceeds according to the Legislature’s next steps for committee‑reported measures.

Clarifying details: Staff and speakers repeatedly contrasted "unused" EITC dollars with active scholarship disbursements; the bill’s sponsor and staff described the overall cap as $680,000,000 and listed proposed subcaps (examples cited in committee: $273,000,000 for scholarship programs and $200,000,000 for economically disadvantaged scholarships). Representative D’Arcy’s claim about a $102,000,000 reduction and 30,000 students was made on the floor during debate and recorded in the committee transcript; those figures represent her assertion and were not presented by staff as official fiscal estimates in the hearing record.

Ending: The committee passed the bill after debate; committee members highlighted both the need for greater transparency and concerned about potential impacts on specific schools and scholarship availability.