Last week, State Rep. Tina Courpas (R-Greenwich) released a statement calling on Gov. Ned Lamont to opt Connecticut into the $1,700 federal scholarship tax credit provision included in Trump’s One Big Beautiful Bill Act (OBBBA).
“The $1,700 Federal Scholarship tax credit is that rarest of policy decisions – a true no brainer,” said Courpas. “Governor Lamont should opt-in for CT and open the gates for private dollars to flow into CT’s education system, costing the state and the taxpayer nothing. Let’s opt in!”
One of OBBBA’s many provisions allows those who donate money to “scholarship-granting organizations” (SGOs), or private organizations that offer private-school scholarships to K-12 students, to claim a federal tax credit for every donation of up to $1,700. OBBBA stipulates that state governors, or a governor-designated state agency, can opt in to this provision by providing the U.S. Treasury with a list of qualified SGOs in their state. States have until Jan 1, 2027, to opt in, as the provision is set to go into effect next year. According to EdWeek, 30 states have indicated their interest in opting in to the provision thus far, while only two states, Minnesota and Wisconsin, have expressly opted out.
The scholarship tax credit marks the first of its kind offered by the federal government, though many states have implemented their own credits in the past. State Republicans in Connecticut have introduced several bills in the past to introduce a state-level scholarship tax credit to Connecticut, most recently in 2024, but none have passed. While proponents of the idea say it offers a meritocratic path to better schooling for overachieving students in underperforming districts, opponents have referred to them as “voucher schemes,” arguing they provide wealthy individuals another way to write off taxes while incentivizing greater funding to private schools, instead of public schools.
Under the federal credit, donations will be deemed tax-credit eligible so long as they are to an SGO that offers scholarships to children in opt-in states, and so long as the recipient families make less than 300% of the median gross income for the area in which they live. Courpas noted that this high threshold ensures that “approximately 90%” of Connecticut’s children would be eligible to receive scholarships from these organizations. According to analysis by officials at the state’s Office of Legislative Research, this means donations made to scholarships given to the children of families making anywhere from $330,000 to $446,700 would be tax-credit eligible. Opponents of such tax credits argue that this high-income threshold shows the true purpose of such credits.
“These programs subsidize wealthy families who can already afford private education,” wrote Kate Dias, President of the Connecticut Education Association, in written testimony submitted in opposition to 2024’s proposed Connecticut credit. “They do not help low-income families who do not have the income to afford to pay additional tuition costs out of pocket or who don’t have tax liability sufficient to benefit from the credit.”
Funding for public schools is based largely on property taxes, meaning municipal residents will pay a portion of their school district’s expenses regardless of whether their child is publicly or privately educated, or whether they have a child at all. But distribution of state-level funding to public schools is determined by the state’s Education Cost Sharing Formula (ECS), which takes several factors into account, one of which is the “foundation amount.” State districts’ foundation amounts are determined via student count, with districts receiving $11,525 per student. This amount was first set in 2013, and public school advocates have decried it as being insufficient to meet rising inflation. Opponents of scholarship tax credits argue that by incentivizing further donations to SGOs, SGOs are able to further incentivize the flight of students from public schools, thus decreasing their ECS reimbursement amounts.
“They drain resources from public schools by reducing the amount of revenue available to fund ECS, special education, and other key programs that support local schools,” said Dias. “Whether called a voucher, tax credit, scholarship, or education savings account, programs like this are handouts to wealthy taxpayers and private schools like Choate, Taft, and Gunn.”
On the other hand, Courpas noted the fact that the OBBBA credit would also apply to donations made to programs that fund assistance to public school students, such as tutoring, school supplies, special needs services, transportation, extended day programs, and educational technology costs. Further, as the credit is federal, even if Connecticut does not opt in, individual donors can still claim the credit by donating to opt-in state SGOs.
“This means that if CT doesn’t opt in, millions of new dollars in CT private donations could go to states that do participate,” said Courpas. “So, unless the Governor takes action, CT taxpayers will simply make the donations to SGOs in other states; taxpayers here will receive the federal tax benefit, but those scholarships will benefit kids in other states.”
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