Kentucky state capitol

LOUISVILLE, Ky. (WDRB) -- A scholarship tax credit bill has been filed in Kentucky’s state Senate days before the start of National School Choice Week.

Sen. Ralph Alvarado, R-Winchester, filed Senate Bill 110 on Friday.

The legislation calls for donors to scholarship-granting organizations to recoup most of their contributions through tax credits, which would be worth 95% of their donations for up to $1 million in tax breaks. Multi-year pledges would net donors tax credits worth 97% of their contributions or $1 million, whichever is lower.

Those scholarships would help families offset tuition at private schools.

Alvarado told WDRB News that SB 110 aims to provide youth who come from low-income households, have disabilities or live in foster care "the same opportunities as wealthy children in our state."

"Public schools do a great job for many kids," Alvarado said in a phone interview. "... But it's not for everybody, and there are some out there who are hoping to have another option but financially can't afford it."

SB 110, like other scholarship tax credit bills, would set aside a $25 million pool for the program starting July 1. That limit would increase by 25% if at least 90% of the credits are doled out, according to the bill.

Eligible students include those who are in households with incomes of up to 200% of the eligibility threshold for reduced-price lunch, in foster care, have been recipients of such scholarships or have siblings who have received the scholarships.

Most first-time recipients must be in foster care, have special education needs or qualify for reduced-price lunch, according to SB 110.

Unlike a similar scholarship tax credit bill last year, this year's offering does not include an end date. That legislation, House Bill 205, would have sunset the program by Jan. 1, 2024.

A fiscal note on HB 205 indicated that if the program's cap had gone up to meet demand, it would have cost the state $209 million.

Scholarship tax credit legislation has drawn sharp criticism from public education advocates, who argue that the budgets of school districts would be affected if enrollments drop. Kentucky schools are funded by the state on a per-pupil basis, and groups like the Kentucky School Boards Association have said that school districts will still have the same fixed costs to worry about, such as building maintenance and utilities.

Supporters of scholarship tax credits, however, contend that schools would ultimately save money because they would have fewer students to educate and, thus, lower expenses.

"For me, it's not about people that want more money for their particular budget," Alvarado said. "It's about giving kids that are in our inner cities that are lower socioeconomic status, kids in foster homes, kids with disabilities the same opportunities as wealthy children in our state."

Alvarado said he'd been told that a companion scholarship tax credit bill had been filed by House Majority Whip Chad McCoy, R-Bardstown, on Friday, but none had been posted to the Legislative Research Commission's website.

While the bill has "very good support" in the Senate, Alvarado isn't so sure about its standing in the House. A similar scholarship tax credit bill was heard in the House Appropriations and Revenue Committee last year, but no vote was taken.

"I think the preference will be for it to start (in the House), particularly in a budget year because you want make sure that if there's going to be an allotment for this, it probably needs to be matched up in the budget," he said.

Sunday marks the beginning of National School Choice Week, with advocates planning to rally at the Capitol on Monday.

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