Republicans in the Kentucky General Assembly have tried for years to divert public funds toward private or charter schools in the state — including individual bills and a ballot referendum for a constitutional amendment — but none have been successful, either in the courts or the ballot box.
Now, the federal government has opened a window by allowing states to opt into a dollar-for-dollar federal tax credit for donations to “scholarship granting organizations” up to $1,700. Congress created the first-of-its-kind incentive under President Donald Trump’s massive policy package, the One Big Beautiful Bill.
A Kentucky bill seeking to take advantage of that credit has speedily moved through the legislature, going through a committee vote and passing through the full House on Tuesday mostly on party lines.
Rep. Kim Moser, a Republican from Taylor Mill, sponsors House Bill 1, which would authorize the program and skirts Democratic Gov. Andy Beshear to instead give the GOP secretary of state the authority to implement it.
Moser said failing to take up the program would be “leaving money on the table.”
“House Bill 1 and the Educational Freedom Tax Credit would not cost Kentucky taxpayers a dime, but it would allow Kentucky students to take advantage of scholarships granted by scholarship granting organizations,” Moser said in the Tuesday hearing.
House Bill 1 requires the state to create a list of organizations that people can donate to in order to qualify for the credit. Moser filed the bill, which quickly amassed more than a dozen GOP co-sponsors, late last week, the same day that the Kentucky Supreme Court unanimously struck down the legislature’s 2022 attempt to create a charter school funding mechanism.
“You're going to pay the money anyway,” Moser said later Tuesday on the House floor. “So it's your choice, either pay the federal government or bring the money home to Kentucky students.”
GOP lawmakers have made repeated attempts to implement “school choice” initiatives to divert public funds outside of the public school system, which is expressly prohibited in the state constitution unless the question is put before voters. In 2021, lawmakers passed a school tax credit program that the courts ruled unconstitutional the next year. In 2022, they passed the funding mechanism for charter schools, which the courts struck down this month. And in 2024, Republicans put a measure on the ballot to change the constitution to allow them to spend tax dollars on private and charter education, but voters definitively rejected it.
In a statement, Beshear’s spokesperson Scottie Ellis said Kentuckians had already spoken on whether they want to spend public funds on private education.
“Last week, the Kentucky Supreme Court agreed in a landmark ruling. Filing House Bill 1 hours after the ruling shows that Republican legislators refuse to listen to Kentuckians as they try to find a workaround to push their own agenda,” Ellis said.
Republican Rep. Timmy Truett, a public elementary school principal in McKee, confirmed in committee that public schools too could set up a scholarship fund in order to pay for additional needs and services in their community. Expenses allowed under the bill could be tuition, but the funds could also cover supplies, internet, computers, transportation and more as long as they’re connected to attending a private, public or religious school.
The federal program puts some restrictions on which students may benefit from scholarships through the tax credit — students’ household income can’t be more than 300% of the area’s median gross income to qualify.
Nearly every Democrat voted against the bill, some saying they have frustrations with the process. Democratic Rep. Tina Bojanowski of Louisville voted in favor of the bill, as did one other Democrat.
Because the final version of the bill was entered into the record the same day it passed, lawmakers weren’t able to file amendments on the final version in time to follow the chamber’s rules. Bojanowski filed a couple, as did several other Democrats, but none were voted on because of the rules.
One of Bojanowski’s amendments would have required the scholarship organizations to have a “physical office or facility” in Kentucky, which Bojanowski said she hoped would increase transparency. The other would have specified that organizations can’t give scholarships to schools that discriminate based on race, ethnicity, nationality, disability, age, sexual orientation, etc.
“I understand this is going to have public federal tax dollars, in part, go to private education. I think that any institution that accepts those … public tax dollars should comply with the same nondiscrimination that our public schools do,” Bojanowski said.
Rep. Adrielle Camuel, a Democrat from Lexington, said it was inappropriate to remove authority to authorize the tax credit from the governor and worried it does not include accountability measures for the schools receiving scholarship funds.
“There's very little accountability and oversight for how money will be spent under this bill. The secretary of state collects a fee and publishes a list, and that's the extent of the oversight,” Camuel said. “There are no requirements for academic performance required reporting in this bill, no civil rights compliant mandates, no transparency requirements for how scholarship funds are spent, or which students are accepted or rejected.”
By the time that the legislation passed a floor vote Tuesday afternoon, substituted language introduced in committee still had not been uploaded for public review. It reflects the speed by which HB 1 moved through the House. Democratic Rep. Sarah Stalker called to table the bill — a motion that failed — saying the bill was inappropriately sped through the process.
“There is no need to rush this bill. We can take a vote on this at a later date,” Stalker said. “While we are not able to table it, I would encourage the members to think about the way that you vote today and make sure that you're not eroding that public trust with the constituents that you represent.”
