When Oklahoma policymakers approved the Oklahoma Parental Choice Tax Credit program in 2023, it made Oklahoma a national leader in education by providing all families with a wide range of options, including private-school education.

But other states are now closing the gap, and the race is on to see which states will provide the most robust opportunities to families.

On May 3, neighboring Texas joined the growing list of states that have a school-choice program open to all families. Texas Gov. Greg Abbott signed legislation creating Education Savings Accounts (ESAs) that let parents use tax funds to pay for private-school tuition.

“When I ran for re-election in 2022, I promised Texans that we will bring education freedom to every Texas family,” Abbott said. “Today, Texas delivers on that promise. I am signing this law that will ensure Texas families, whose children can no longer be served by the public school assigned to them, have the choice to take their money and find the school that is right for them.”

The governor was joined at the bill signing by U.S. Sen. John Cornyn, Texas Lieutenant Governor Dan Patrick, Texas House Speaker Dustin Burrows, and hundreds of state and local officials, school choice advocates, and families from across the state.

“This session, the Texas Legislature worked together to deliver what parents have long been asking for—more opportunities for our students to reach their full potential,” Burrows said. “School choice, paired with the House’s additional proposal to initiate the largest increase in public education funding in Texas history, will elevate the overall quality of our educational system and make a generational impact on our state.”

The Texas program provides up to $1 billion initially for Education Savings Accounts that can be used by any Texas family to pay for private school tuition, instructional materials, and educational therapies. The program will launch in the 2026-2027 school year.

The Texas program provides an ESA of $10,330 per child in fiscal year 2027 and then increases that amount to $10,899 by fiscal year 2030.

Because the amount of money going to ESAs is less than what would be allocated for the same child to attend a public school in Texas, officials predict the program will save more than $805 million per year by 2030, based on an assumption that 24,500 Texas students will leave public schools for private schools in fiscal year 2027, increasing to 98,000 students by fiscal year 2030.

With the addition of Texas to the roster of school choice states, 55.1 percent of K-12 students in the United States are now eligible to participate in a school choice program.

Texas is not the only state bordering Oklahoma to provide robust school choice. Officials in neighboring Arkansas have also enacted a universal school-choice program that provides an average benefit of $6,672 per student.

While the maximum benefit provided to families through the Oklahoma Parental Choice Tax Credit program, $7,500 per child, remains higher than the benefit in Arkansas, it is significantly less than the maximum now provided to families in Texas, increasing competitive pressure for Oklahoma to keep up.

The Oklahoma Parental Choice Tax Credit program provides refundable tax credits of $5,000 to $7,500 per child to cover the cost of private school tuition, with the largest credits going to those with the lowest income.

The program has five income brackets: Families earning up to $75,000 can receive a $7,500 per-child refundable tax credit; those earning $75,001 to $150,000 get a credit of $7,000 per child; families with income between $150,001 to $225,000 qualify for a $6,500 credit; those earning $225,001 to $250,000 receive a $6,000 credit; and those earning $250,001 and up qualify for a credit of $5,000 per child.

Preference is given to families in the two lowest income brackets.

A report released by the Oklahoma Tax Commission showed that in its first year, the Oklahoma Parental Choice Tax Credit program benefited far more children from the lowest income category than children whose families were in the highest income bracket.

Overall, 60 percent of children were from families in the two lowest-income brackets (those with incomes below $150,000), and nearly 80 percent came from families outside the top bracket of $250,000 or more.

The program has proven wildly popular, and parents recently rallied at the Oklahoma state Capitol to thank policymakers for supporting the program. Several speakers noted that the Oklahoma Parental Choice Tax Credit program made private school financially viable for their children.

However, in its first year of operation, demand for school-choice tax credits exceeded the supply in Oklahoma due to a $150 million cap on the program. The cap is $250 million for the 2025-2026 school year.

In an August 2024 report, “What the Education Choice Movement Can Do Next: Personal-Use Tax Credits for K–12 Education,” Matthew Ladner, senior advisor for education policy implementation in the Center for Education Policy at The Heritage Foundation, declared that Oklahoma’s tax-credit program was the “most robust personal-use education tax credit to date.”

But he warned that new private schools may be slow to enter the Oklahoma market because of the financial uncertainty associated with the program’s cap, which could prevent some students from attending a private school because their tax-credit application was denied due to insufficient funds.

Ladner recommended that Oklahoma policymakers either eliminate the program cap or create an automatic “escalator” that raises the cap limit by a set amount when parental demand is poised to exceed available tax credits.

Ladner noted that Florida has an escalator clause for a similar program. Under that law, whenever demand consumes 90 percent of available credits, the program cap is automatically increased by 25 percent.

Providing a similar safeguard in Oklahoma would generate market stability that encourages new providers to enter the field, he noted.

“An uncapped credit or a credit with a larger cap with a robust, demand-driven escalator would also provide greater certainty to those wishing to either create new private schools or to expand existing facilities,” Ladner wrote.