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More tax breaks possible for Kentucky private school scholarship fund donors under proposed bills

The program helps provide scholarships for students to attend private schools and pay for other educational expenses.

FRANKFORT, Ky. — Republican lawmakers in Kentucky filed legislation Thursday to expand the state's school choice program, which, when implemented, would provide scholarships for students to attend private schools and pay for other educational expenses.

The Kentucky General Assembly approved the legislation last year after overriding Democratic Gov. Andy Beshear's veto.

Under the law, private donors who back the Educational Opportunity Accounts fund are eligible for tax credits. There currently is a $25 million cap on the tax credits allowed each year. 

Right now, only students in Kentucky's eight most populous counties are eligible for the program. Lawmakers are looking to expand the program this year to include the entire state.

RELATED: Judge blocks public tax credits for Kentucky private schools

One bill, filed in the Senate, would increase that cap to $50 million. Another bill, filed in the House, would increase the cap to $100 million. 

Those opposed to the legislation said offering donors tax credits takes money away from the state that could be used for public school education. 

Supporters say the program offers more equitable choices to students in Kentucky by providing private school education, tutors and other educational services to families who may not otherwise be able to afford it.

"What we know in Kentucky is that families already have school choice if they're wealthy or upper middle income," EdChoice President Andrew Vandiver said. "This is about bringing those same opportunities to families who need a little help."

RELATED: Lawsuit challenges key part of new Kentucky education law

While lawmakers are pushing to expand the 2021 law, it never actually took effect. 

After it was enacted, a lawsuit was filed challenging the legality of using tax credits to incentivize donations that would be used for private school tuition. 

In October 2021, a circuit court judge ruled Kentucky’s constitution requires voters to weigh in before money collected for educational purposes can be used on anything but public schools.

The matter has been appealed to the Kentucky Supreme Court. 

Vandiver said they expect the Supreme Court to announce if they will or will not hear the matter any day now.

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