School-choice tax-credits bill on the move in NC legislature

A significant expansion of school choice in North Carolina is one step closer to becoming a reality after the state Senate voted July 29 to pass House Bill 87, the Educational Choice for Children Act.

The measure would enable North Carolina to take part in a federal tax-credit program authorized under the Big Beautiful Bill Act recently enacted by Congress. The program would be associated with contributions made by individuals to designated Scholarship Granting Organizations (SSOs), which in turn issue stipends to students for private school expenses, including tuition and other allowable costs.

A key feature is that donors receive a dollar-for-dollar reduction in their income taxes, effectively making the donation cost-free. Taxpayers could donate up to $1,700 per year.

The program, set to begin in 2027, allows families earning up to three times the median income for their area to qualify for scholarships. While the legislation provides significant funding — estimated to cost nearly $26 billion through 2034 — its implementation largely depends on whether individual states and their governors opt into the program.

“North Carolina has been at the forefront of school choice and educational freedom for more than a decade, and this bill will make North Carolina the first state in the nation to opt in to a new form of school choice,” said Senate leader Phil Berger, R-Rockingham.

The measure assigns responsibility for maintaining an updated list of SGOs to the State Education Assistance Authority, the same entity responsible for implementing the state’s voucher program, the Opportunity Scholarship Program.

Democrats in the Senate attempted to run seven amendments that were either replaced or laid aside by the Republican majority. The amendments largely focused on setting spending priorities for public schools before the tax credits for school choice could kick in. One amendment, from Democratic Sen. Jay Chaudhuri of Wake County, would have created a tax deduction worth up to $1,000 for donations to a public school unit.

“This bill may make North Carolina the first state in the nation allowing for such tax credits, but it’ll only move our state closer to being last when it comes to teacher pay and per student pupil spending, because it gives a tax benefit to the wealthy,” said Chaudhuri.

HB 87 passed the Senate in a party-line 30-19 vote and now heads to the state House.

North Carolina remains a strongly pro-school choice state. A Carolina Journal poll of likely voters from January put support for the Opportunity Scholarship Program at 61%. A similar 61% of voters believe that school funding should be tied to students’ individual educational needs.

The post School-choice tax-credits bill on the move in NC legislature first appeared on Carolina Journal.

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