Louisiana Senate Bill SB83

Louisiana 2019 Regular Session

• Introduced: 3/27/19
• Refer: 3/27/19

Caption

Provides for the individual income tax credit for donations to school tuition organizations. (1/1/20)

Impact

The changes introduced by SB83 reflect a significant shift in how donations to school tuition organizations are managed and the benefits derived by taxpayers. By allowing a slightly lower tax credit without reductions for administrative expenses, the bill aims to make more funds available for actual scholarships rather than processing costs. This could potentially lead to increased donations as donors would see a more favorable return on their contributions. However, reducing the frequency of payments may affect students' access to needed funds over the course of the academic year, raising concerns about the timing of financial support for families relying on these grants.

Summary

Senate Bill 83 (SB83) proposes amendments to Louisiana's tax code concerning the tax credits available for donations made to school tuition organizations (STOs) that provide scholarships to qualified students. The bill reduces the credit percentage for donations from 100% to 95% of the amount donated to the organization for scholarship funding. Importantly, it also removes the requirement that the credit be diminished by a portion that covers the STO's administrative costs. In addition, SB83 changes the frequency of scholarship disbursements from four times a year to just two, impacting the financial flow to students attending qualified schools.

Sentiment

Overall sentiment surrounding SB83 has been a mix of cautious support and concern among lawmakers and educational advocates. Proponents argue that adjusting the tax credit will encourage more donations to STODs, thus increasing funding for educational scholarships. On the other hand, critics are wary of the reduced scholarship payment frequency and the potential implications for student financial stability, fearing that it may disadvantage low-income families who depend on continuous financial support throughout the school year.

Contention

A notable point of contention is the balance between providing tax benefits to donors and ensuring that students receive timely and adequate financial assistance. By altering both the percentage of tax credit and the timing of scholarship payments, SB83 raises questions about the prioritization of donor incentives over the immediate needs of students. The discussion around this bill reflects broader debates regarding educational funding policy, the role of private donations in public education, and the impact of tax policy on equitable access to quality educational opportunities.