Legislation tweaking Oklahoma’s parental choice tax-credit program, which provides refundable tax credits to help Oklahoma families pay for private school, has advanced from a Senate committee.

But the bill’s passage occurred over the objections of Democrats, including one Democrat who pointedly questioned why homeless children were being offered the opportunity to benefit from the program alongside their more financially secure peers.

Senate Bill 1477, by Senate President Pro Tempore Greg Treat, makes several minor tweaks to the Oklahoma Parental Choice Tax Credit Act. That program provides refundable tax credits of $5,000 to $7,500 per child to help families pay the cost of private-school tuition with the largest credits going to families with the lowest incomes.

Treat’s bill makes clear that the refundable tax credits may not be counted as taxable income by the state, protecting low-income families from potential hardship if they participate in the program.

If a parent withdraws a child from private school, SB 1477 requires that any unused tax credit then be reallocated to another applicant.

The bill also shifts the program from a calendar-year model to one that aligns with the school year.

Treat, R-Oklahoma City, said that change would ensure that families who plan to shift their child to private school at the start of the school year in the fall have equal opportunity to participate. This year, families had to apply for credits by February to be given priority consideration even if the credit was sought for private-school tuition in the pending school year that starts next August. As a result, some families had to apply for the credits before even knowing if their child had been accepted for enrollment in a private school next August, while many families could not apply at all until later this year due to that challenge.

Also, because the program is capped at $150 million in credits this year (rising to $250 million by the third year of the program) and because the program was launched mid-school-year in January, Treat noted that families looking to make a change next August are effectively placed in line behind those who currently have children enrolled in private school or those who made a mid-year school change.

“The problem that I see and one of the things I’m trying to correct is to make sure that people who are not currently enrolled in private school have an equal opportunity to apply for these,” Treat said. “And that’s the reason I’m trying to adjust it.”

He noted aligning the program with the school year would make the program more accessible for more Oklahoma families.

“The December enrollment period was very successful,” Treat said. “However, I want to make sure that children who are not currently enrolled in private school right now have an equal opportunity to try to go for these credits.”

The Oklahoma Tax Commission began accepting applications for the Oklahoma Parental Choice Tax Credit program on Dec. 6, 2023. By the start of January 2024, the commission reported that applications for more than 30,000 children had been received.

More applications are expected once families determine if their children have been accepted into a private school for the 2024-2025 school year, which begins next August.

Homeless Students Would Benefit

The bill drew several questions from state Sens. Julia Kirt, D-Oklahoma City, and Carri Hicks, D-Oklahoma City. While some of those questions focused on the change to align the program with the school year, many of Kirt’s questions focused on a provision of the bill that aids homeless children.

SB 1477 states that if an “eligible student attends a private school, accredited by the State Board of Education or another accrediting association, that exclusively serves students experiencing homelessness, the credit amount shall be Seven Thousand Five Hundred Dollars ($7,500.00) or the amount of the cost to educate the eligible student at the private school, whichever is less.”

Currently, only one private school in the state exclusively serves homeless children—Positive Tomorrows in Oklahoma City. But Treat noted that other schools could be developed to serve homeless children.

Treat noted Positive Tomorrows does not charge tuition to its students, meaning the tax-credit program does not currently benefit that school’s students.

“This aligns that (tax credit program) with the mission of trying to serve homeless kids as well,” Treat said.

“The current structure of the tax credit, the person using the tax credit has to be a family member or related somehow,” Kirt asked. “So how would that work in this circumstance?”

Treat said the “school itself will get the $7,500 that we’ve set aside to fund the tax credit.”

SB 1477 passed the Senate Finance Committee on an 11-2 vote that broke along party lines with Republicans in support and Democrats opposed. The bill now proceeds to the floor of the Oklahoma Senate.