19 States Offer Tax Credits for Private School Scholarship Donations

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According to the National Conference of State Legislatures, most states began offering tax credits for donating to scholarship granting organizations (SGOs) that provide tuition scholarships to students, primarily benefiting private school families, since the turn of the century. Ohio has lost over $80 million in state revenue since launching its tax credit program in 2021, which adds another layer of public support for private schools on top of vouchers.

Why it matters

The tax credit programs are seen by supporters as a way to expand access to private education, but opponents argue they divert money from public schools that serve over 80% of students and primarily benefit families already in private schools.

The details

Eighteen states offer tax credits similar to what Ohio offers for donations to SGOs. The Ohio General Assembly established income tax credits for donations to SGOs in 2021. Since then, the number of SGOs operating statewide has grown from 7 to 74, with the Angel Scholarship Fund alone raising $19.6 million since 2022 for Catholic schools in Northeast Ohio. The credits are projected to reduce state income tax collections by $24.3 million this year and $25.5 million by 2027, on top of the $1 billion Ohio already spends annually on vouchers.

• Ohio established income tax credits for donations to SGOs in 2021.
• The number of SGOs operating statewide has grown from 7 in 2021 to 74 now.
• The Angel Scholarship Fund has raised $19.6 million since 2022 for Catholic schools in Northeast Ohio.
• The tax credits are projected to reduce state income tax collections by $24.3 million this year and $25.5 million by 2027.

What’s next

More than 300 districts in Ohio are suing the state, claiming the voucher program is unconstitutional.