A bill opting Kentucky into a tax credit program promoted by the Trump administration to fund scholarships for K-12 students is winging its way through Kentucky’s Republican-controlled legislature.
The Senate Education Committee gave its approval to House Bill 1 Thursday morning, the day after the measure arrived in the Senate. Eleven Republicans voted in favor of the bill while the two Democrats on the committee voted against it.
HB 1 passed through the House on Tuesday largely along party lines with a vote of 79-17 after it was filed last week by Republicans Rep. Kim Moser, of Taylor Mill; TJ Roberts, of Burlington; and House Speaker David Osborne, of Prospect. The Senate gave the bill a first reading Wednesday, which paves the way for a Friday floor vote.
Some critics of the bill, particularly Democrats, have argued HB 1 is a way to support “school choice” options at the expense of public schools despite rejections of earlier proposals by Kentucky voters and the state Supreme Court. However, Republicans say the bill would allow K-12 students and their families to benefit from education assistance grants funded by a federal tax credit — at no cost to the state and without the use of tax dollars.
Moser, the primary sponsor, told the Senate Education Committee that Kentucky students could miss out on benefits if the state fails to opt into the program which was part of the One Big Beautiful Bill Act that Congress approved last year.
“We are already paying this money in federal taxes, so it’s really our choice,” she said. “We either pay the federal government this money or we redirect those funds back to Kentucky families.”
If HB 1 passes through the General Assembly this year, it would allow Kentucky K-12 students to receive scholarships for private school tuition and other education assistance funded by donations from people receiving the federal tax credit that will become available in 2027. In addition to tuition, the scholarships may be used for tutoring services, books, internet access and more.
Under the bill, Kentucky may identify eligible scholarship granting organizations (SGO) for students. An SGO can benefit not only private school students, but public school students as well.
The federal tax credit is up to $1,700 per year for people who donate to SGOs, which would then give the money to eligible students through scholarships.
Kentucky’s program would be overseen by the secretary of state, who is currently Republican Michael Adams. His office would report to the U.S. Treasury about the state’s participation in the federal tax credit.
During the Senate Education Committee meeting, Democratic Caucus Chair Reggie Thomas, of Lexington, asked about the “haves and have nots.” In his district, Fayette County has some private schools that may benefit from students having access to these scholarships, but public schools in neighboring counties may not.
Moser said that public schools may choose to set up an SGO for their students. She has heard of local hospitals working with local schools to help students go into the health care industry.
“I think that there are all kinds of opportunities it does not have to support a private school,” she said. “I think that the public schools stand to benefit as much as anyone
The committee’s chairman, Sen. Steve West, R-Paris, highlighted that the income for families of students who can benefit from scholarships must be below 300% of their area median income.
“To be clear, this tax credit does not affect any current school funding by doing the tax credit. It in no way will take away funding from any other education funding,” West said. “This is money that the state would not receive if it were not for this program, so if we don’t take advantage of this, the money can go somewhere else.”
Senate President Pro Tem David Givens, R-Greensberg, urged Kentuckians to support the legislation and consider donating to an SGO before filing their taxes in the future.
“This is an opportunity for all students across Kentucky. Largely in my part of the world, rural part of the state, my public schools are going to benefit tremendously from this, and my public school students and families are going to benefit tremendously,” he said.
While explaining his vote against the bill, Senate Democratic Floor Leader Gerald Neal, of Louisville, said,
“I need more information. This is sort of new to me, and I what I hear sounds like it could be beneficial, but I just don’t know how the grit works, and I don’t want to do anything that undermines public education in any way, particularly due to the fact that I think there’s strong argument that we’re underfunding it anyway and we’ve been doing that for a while.”
While voting in favor, Senate Republican Floor Leader Max Wise, of Campbellsville, said he feels like sometimes he is in “a bizarro world” when hearing Democrats explain their votes.
“We’re going to pass this bill. We’ll pass it off the Senate floor. The governor may veto it. We’ll be right there to override it,” Wise said.” But I will tell you those that are voting no and those that are sharing misinformation about this bill — this could be something that can be a game changer for your school district.”
Both the Kentucky House and Senate have Republican supermajorities. Even if Democratic Gov. Andy Beshear vetoes the bill, GOP lawmakers could override him. The governor has opposed past efforts to open charter schools in the state.
Asked about the bill during his weekly press conference, Beshear said he has “been really clear that public dollars should only go to public schools.”
“I don’t comment on whether I’m going to veto or not veto bills until they get to my desk, but I’m 100% pro-public education governor that believes that public dollars should only go to public schools,” he added.
The U.S. Treasury and Department of Education said last month that 23 states had opted-in to the federal tax credit, including Kentucky neighbors Indiana, Missouri, Ohio, Tennessee, Virginia and West Virginia.