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Ivey’s school choice bill allows for $7,000 tax credit for private school education

MONTGOMERY, Ala. – Alabama families would be allowed to use up to $7,000 per year on private and parochial school expenses and $2,000 for homeschool costs under tax credit legislation drafted by Gov. Kay Ivey’s office and supported by GOP leadership in the State House.

In her annual state of the state address Tuesday night, Ivey called the bill her biggest priority of the session.

Senate Bill 61 was filed in the Legislature Tuesday by Sen. Arthur Orr, R-Decatur. Rep. Danny Garrett, R-Trussville, will carry the bill in the House.

The Creating Hope and Opportunity for Our Students’ Education — CHOOSE — Act Tax Credit program would cover expenses including: Tuition, textbooks, fees for after-school or summer education programs, private tutoring, educational software and applications and education services for students with disabilities. It also covers contracted services at public schools, including classroom instruction.

The new legislation says lawmakers will dedicate at least $100 million per year state spending on the program. And in its first two years, there would be income limits for participating families.

The first 500 ESAs each year would be reserved for students with special education needs.

Private schools must be accredited, or in the process of obtaining accreditation and opt to participate in the tax credit program.

Families schooling at home could receive a credit of $2,000 per student for allowed educational expenses, capped at $4,000 per family. 

If approved by lawmakers, the tax credit would begin in the 2025-2026 school year. Families’ income cannot exceed 300 percent of the federal poverty level in the preceding tax year. This year, that’s $90,000 for a family of four. Starting in 2027, there is no income limit. 

There is also a testing requirement that participating students “take a standardized assessment aligned to the curricula of the participating school, a nationally norm-referenced achievement assessment, or a nationally recognized aptitude assessment of the participating school’s choice.” Students with disabilities are exempt from that requirement if they are not able to participate in testing.

Parents could also use the tax credit to send their children to public schools outside their zoned districts.

The bill does not require any public or non-public school to participate in the program or enroll students under it.

“As additional families choose to participate in the program, and as our revenues increase, we can grow the program responsibly so that it can be fully universal for every Alabama family who wishes to participate,” Ivey said.  “This program will be effective and sustainable, and it will serve as the catalyst for making Alabama the most school choice-friendly state in the nation for years to come.”

Rep. Earnie Yarbrough, R-Trinity, on Tuesday filed a less restrictive education savings account bill that he dubbed the “True School Choice for Alabama Act.” A similar proposal from Yarbrough and Sen. Larry Stutts, R-Tuscumbia, did not pass last year.

Stutts this year is co-sponsoring Ivey’s proposal, telling Alabama Daily News it’s a good start. He plans on bringing amendments, he said, that would allow families who don’t spend the full $7,000 per year to roll it over and use the funds for higher education until the pupil is 21. 

“That would incentivize higher education,” Stutts said.

He also wants the income cap to be removed for military families.

Orr’s bill has 12 other Republican co-sponsors, including Sens. Tim Melson, Florence; Tom Butler, Huntsville, and Senate President Pro Tem Greg Reed of Jasper.

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