Gov. Mills to decide on Maine school choice tax credit program

PORTLAND (WGME) — Maine Governor Janet Mills has not yet decided whether the state will opt into a new federal tax credit program that would help fund private school tuition, tutoring and other educational services.

The program, called the Educational Choice for Children Act, would start next year. In states that opt in, individuals can receive up to $1,700 in tax credits for donations they make to scholarship-granting organizations, also known as SGOs. Those SGOs would then award grants to students to cover private school tuition, tutoring and other educational services.

Families earning up to 300 percent of the area median income can qualify for the scholarships in states that opt in.

Under the current framework, donors contribute to SGOs and receive federal tax credits, and SGOs use the funds to award scholarships for qualifying educational expenses, including tuition, fees, tutoring, curriculum materials and educational therapy for K-12 students. SGOs can also use donated money to award scholarships for educational expenses, including everything from private school tuition to special needs services and educational therapy.

Each state’s governor must opt in by filing IRS Form 15714. Once opted in, the state designates SGOs to operate within its borders and distribute EFTC scholarships to eligible families.

Republican State Senator James Libby of Cumberland, a member of the Education and Cultural Affairs Committee, says he is interested in bringing the program to Maine.

“What it really does is it takes dollars that would normally go to pay for taxes and put them directly into education,” Libby said. “The program itself allows for expenditures for other things besides school choice, so the states can set it up the nonprofit to have goals for whatever they want. There’s a lot of good parts to this legislation and I truly hope Maine will get involved.”

Democratic Rep. Kelly Murphy, who chairs the state’s education committee, says she believes the program would hurt Maine students.

“The Education Freedom Tax Credit favors families that already have the ability to pay for private schools at the expense of families with students enrolled in public schools,” Murphy said. “A decline in public school enrollment would result in a loss of state funding for local SAUs, as the costs for running schools continue to increase, putting additional pressure on property taxpayers to make up the gap. This program and others like it would hurt the majority of Maine students, especially those in small, rural schools across our state.”

The U.S. Department of the Treasury is in the process of finalizing rulemaking for the program. Currently, 30 states have opted into the program, and four states have opted out. In New England, New Hampshire is the only state that has opted in so far.

It is unclear if there is a hard deadline for states to opt in, but Mills is facing pressure to sign off this year so the Department of the Treasury can approve scholarship organizations before scholarships become available in January.