Montana aims to expand education choice via tax credit scholarships for students
Montana Senator John Fuller has introduced a new bill that would expand the amount of money available for student tax credit scholarships.
Tax credit scholarships are a popular education choice model that assists in expanding the opportunity to more students. Scholarship tax credit programs create new pools of funding so that children can receive scholarships to attend the private schools of their parents’ choice. Corporations and individuals make private donations to nonprofit organizations that provide scholarships to eligible children. In return, the corporations and individuals receive a state income tax credit. There are 21 scholarship tax credit programs operating across the country, and research has demonstrated that these programs are positive for student achievement and save money for state and local governments.
SB 118 would allow the aggregate amount of tax credits allowed be increased from $1 million to $2 million per year in 2023, $10 million in tax year 2024, and $12 million per year in tax year 2025.
Montana originally passed its tax credit scholarship program in 2015. All students statewide are eligible to participate, but the funding has been limited because of state law.
In 2022, the $1 million cap was hit 19 days into the year, with 60 donations from individuals and another nine donations from businesses wanting to take advantage of the credit.
This bill would dramatically increase the funds that could be available for students.