Kentucky House GOP fast-tracks bill enrolling state in federal tax credit scholarship program

Kentucky House Republicans are fast-tracking a bill that would incentivize donations to school scholarship programs in exchange for tax credits.

House Bill 1, which would allow the state to enroll in the federal Education Freedom Tax Credit Scholarship program, passed the House on a 79-17-1 vote. All 17 “no” votes were from Democrats, and Rep. Kim Banta, R-Fort Mitchell, abstained.

HB 1 was filed Feb. 19 — the same day the Kentucky Supreme Court ruled that 2022’s House Bill 9, which created a funding mechanism for charter schools, was unconstitutional.

Critics of HB 1, meanwhile, say the bill will only benefit the wealthy.

The federal program allows up to a $1,700 deduction for people who make contributions to scholarship-granting organizations and was part of school choice expansion included in President Donald Trump’s One Big Beautiful Bill Act.

SGOs are nonprofits that accept contributions and use that money to provide scholarships for education-related services at private or public schools. That can include tuition, fees, tutoring and classroom supplies.

Rep. Kim Moser, R-Taylor Mill, the bill’s primary sponsor, said HB 1 will help improve student outcomes, including test scores.

“This measure would provide a significant tool for public schools to harness a federal tax credit to assist families and children’s access school resources,” Moser said. “It affirms our commitment to expanding educational opportunities and improving student outcomes.”

States must opt in to the tax credit program. The legislation shifts that power from Democratic Gov. Andy Beshear to Republican Secretary of State Michael Adams.

Rep. TJ Roberts, R-Burlington, a co-sponsor of the bill, said the power was shifted because he doesn’t believe Beshear will enroll Kentucky in the program.

“Why are we not giving this authority to the governor is because, simply put, due to his magnificent case of ‘Trump Derangement Syndrome’...whatever you want to call it, he won’t do it,” Roberts said.

Beshear has previously spoken against a similar bill filed by Roberts, House Bill 88, which also would allow Kentucky to enroll into the same federal tax scholarship program. He called Roberts’ bill unconstitutional; Kentucky’s constitution says tax dollars can only go to public, or common, schools.

The bill had passed the House Appropriations and Revenue Committee earlier Tuesday afternoon with 16 “yes” votes, while Reps. Tina Bojanowski, D-Louisville, Lindsey Burke, D-Lexington, and George Brown Jr., D-Lexington passed. Rep. Pamela Stevenson, D-Louisville, voted “no.”

While supporters see the legislation as expanding educational opportunities in Kentucky, critics see it as an assault on public education and criticized the bill’s legislative process. With a committee hearing and floor passage on the same day, many Democrats brought up concerns that the public was shut out of the process.

The committee substitute that passed on the floor was not publicly available at the time of the vote.

Rep. Sarah Stalker, D-Louisville, motioned to lay the bill on the table because she believed the public didn’t get the opportunity to comment; it failed. Rep. Rachel Roarx, D-Louisville, said there was no need to fast-track the bill and would vote “no” because of the process.

Other Democrats brought up concerns the legislation could open the door for school vouchers and said it will only benefit the rich.

“I understand that it’s about giving $1,700, which is basically a bill for the wealthy people, because poor people aren’t going to be able to afford $1,700 to go to a scholarship fund and then to get a tax credit back,” Rep. Mary Lou Marzian, D-Louisville said.

The Kentucky Democratic Party raised concern about the bill Wednesday as well.

“Yesterday, House Republicans passed HB 1 and sent it to the Senate. They fast-tracked it so quickly that the public never got to see the final version before the vote. This fight is not over,” the organization said in an email.

Speaker David Osborne, R-Prospect, disagreed with Democrats’ arguments.

“Everybody in here knew what that bill did, and so any insinuation that it was used to cover up or anything like that is political theater,” Osborne told reporters.

Republicans, meanwhile, argued HB 1 would help public schools. Not enrolling in the federal program, they said, would send Kentucky taxpayer dollars out of the state.

Rep. J.T. Payne, R-Uniontown, said as a public educator in Henderson County, his district already competes with Evansville, Indiana, on workforce development and other areas. Indiana is one of 27 states to have opted into the program, which begins in January 2027.

“I can’t bear the thought that Henderson taxpayer dollars might be able to cross the bridge and cross the river over to Indiana and benefit students there, when it could be staying in our community and benefiting students in workforce development.”

Rep. James Tipton, R-Taylorsville, called the bill an opportunity available to all Kentucky citizens.

“I get so frustrated that when it comes to issues like this. They become so partisan,” Tipton said. “My heart is about our children and their future, and I want every child in Kentucky to have the best opportunity they can, whether they attend public school, private school, or where their parents choose to home school.”

The bill now heads to the Senate for consideration.

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(Reporter Valarie Honeycutt Spears contributed to this story.)