Gianforte signs bill greatly increasing education tax credit

Up to $200K credit to help private-school students
Posted at 11:49 AM, May 13, 2021

HELENA — A bill vastly increasing a state tax credit that funds scholarships for private-school students has been signed into law by Gov. Greg Gianforte.

House Bill 279, which also expands the credit for donations to fund public-school “innovative educational” programs, increases the maximum income-tax credit from $150 a year to $200,000 – an increase of more than 13,000 percent.

Gianforte signed the bill Wednesday at a ceremony at the state Capitol, attended by many supporters of the credit benefiting private schools.

The increase comes two years after the U.S. Supreme Court reinstated the $150 tax credit in a landmark decision, overturning a Montana court ruling that said the credit was unconstitutional because it benefits private, religious schools.

Jeff Laszloffy of the Montana Family Foundation, a group that supports “school choice,” which is some form of state assistance or tax credits that help kids attend private schools, said the bill is the culmination of 13 years of work to create meaningful school choice in Montana.

Jeff Laszloffy of the Montana Family Foundation.

“The importance of this effort cannot be overstated,” he told MTN News. “When HB279 was signed into law, the big winners were parents and their children.

“The funding levels are now high enough that Montana joins 46 other states with meaningful school choice.”

Under HB279, the dollar-for-dollar tax credit can be taken by individuals or corporations up to $200,000 a year – for donations to a “student scholarship organization” that grants scholarships to kids attending private schools in Montana, or to public-school districts to fund certain educational programs.

The expanded credit won’t be allowed until the 2022 tax year. The bill also has a $2 million ceiling on the aggregate amount of tax credits taken that year -- $1 million each for the private and public-school portions of the credit.

That aggregate ceiling doubles the following year, to $4 million.

The bill passed the Legislature on nearly party-line votes, with Republicans in favor. Not a single Democratic lawmaker voted for the bill.

Opponents labeled the tax-credit expansion a huge giveaway to wealthy taxpayers, that ultimately would reduce public funds available to public schools and other public programs and shift the burden to other taxpayers.

Sen. Ellie Boldman, D-Missoula.

“I don’t know about you, but I don’t know many of our fellow Montanans that have $200,000 to shell out on a public or private school,” said Sen. Ellie Boldman, D-Missoula, during debate on the Senate floor late last month. “This is not for students, my friends. This is a tax break for the very wealthy.”

But supporters said the bill is about increasing educational opportunities for students, in both private and public schools.

Sen. Dan Salomon, R-Ronan, who carried the bill on the Senate floor, said he doubted that many, or any, taxpayers would give the full $200,000 to take advantage of the credit.

But that amount of money would help hundreds of students attend private schools, he said, since the average scholarship awarded under the program so far has been $2,100 for students attending elementary or middle-school grades and $3,200 for those attending high school.

“Educational opportunities for students – that’s what this is about,” he said. “There are a lot of kids what can be helped with a $200,000 tax credit. …

“If you want to give $10, you can give $10; if you want to give $1,000, you can give $1,000. If you want to give $200,000 and get that kind of tax break, that’s your opportunity, but this is great for the state of Montana and our students.”