Georgia House votes to raise private school tax credit contribution limit

Georgia’s State Capitol.

Combined ShapeCaption
Georgia’s State Capitol.

The proposal increases the tax credit limit without lifting the overall program cap

Note: this article has been updated to reflect that an increase in the total program cap was not proposed

The Georgia House of Representatives voted Monday to raise the limit on contributions to the state tax credit program for K-12 private school tuition but declined to lift the overall cap.

House Bill 517, which now goes to the Senate, proposes to increase the amount individuals and couples can get in credits against their state taxes owed by contributing to the program.

Critics liken the program to a school voucher, in which government funds private schools, and say it reduces what is left in the budget to pay for already-underfunded public schools. But the Georgia Supreme Court ruled in 2017 that “no public funds are used in the program” since the credits divert taxpayer dollars into private hands before they reach state coffers. So in Georgia, the program is considered legally distinct from a traditional voucher.

(Georgia already has one voucher program, but it is limited to special needs students, though lawmakers are proposing to expand access to it.)

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The money that otherwise would go into the state tax base instead passes through nonprofit organizations that award scholarships to students to help pay for tuition.

The legislation passed 98-71. The primary author, Rep. John Carson, R-Marietta, said the bill doubles the contribution limit for couples to $5,000 and raises the cap for individuals to $2,500, up from $1,000. It also raises the limit for “S” corporations to $25,000, up from $10,000. And it includes new oversight measures, such as an accounting of interest earned on scholarship funds, Carson said, adding that this came in reaction to a recent state audit of the program that called for more transparency.