Tax credits for scholarships could expand

Georgia’s use of tax credits to pay for private school tuition for some Georgia students could expand under legislation advancing through the General Assembly.

House Bill 217 still must get through the Georgia Senate, but its approval by a 111-62 bipartisan vote in the House on Tuesday was a major milestone for the 9-year-old program, which has been capped at $58 million since 2013.

Since 2015, that cap has been met on the first day of availability, leading proponents to call for an increase. HB 217 lifts the cap gradually, reaching a maximum $100 million in as few as six years. It would rise to $65 million next year, then by 10 percent each year thereafter, assuming enough demand.

The tax credit program works like this: Taxpayers pledge money — up to $1,000 for an individual, $2,500 per married couple and $10,000 for shareholders or owners of businesses (except those “C” corporations) — to specific private schools and get a tax credit for the amount. The money passes through nonprofit scholarship organizations, which assign it to students. Taxpayers can select which school gets the money but not which student.

The legislation by Rep. John Carson, R-Marietta, also limits to 25 percent the proportion of the credits available to “C” corporations and trusts, which can contribute up to three-quarters of their tax debt. That’s far more than individuals, and Carson was concerned about corporations squeezing them out.

The tax credits have helped pay for thousands of children to attend private schools, but critics say they reduce state funding available for other government programs, such as subsidies to local school districts. Some also criticize the level of transparency with the program and even its legality. Georgia taxpayers sued in Fulton County Superior Court in 2014, alleging it is unconstitutional because some schools that receive the money are religious.