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Bill

HB 1331

School scholarship tax credits.

2026 Regular Session

HB 1331 creates an Indiana tax credit for donations to scholarship organizations funding private school tuition, reducing state education revenue to subsidize private school choice.

First reading: referred to Committee on Ways and Means
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Bill Summary · HB 1331

Legislative bill overview

HB 1331 establishes a tax credit program allowing Indiana taxpayers to receive credits against their state income tax liability for donations made to scholarship organizations. These scholarship organizations would then distribute funds to students, primarily for private school tuition. The bill creates a mechanism to incentivize private charitable giving toward education through direct tax relief.

Why is this important

This policy would redirect public tax revenue to support private school attendance, effectively reducing state education funding capacity while expanding school choice options for families who can access participating scholarship programs. The approach represents a significant shift in how Indiana funds K-12 education and could substantially impact both public school revenues and private school enrollment patterns.

Potential points of contention

  • Public school funding impact: Every dollar in tax credits reduces general revenue available for public schools, which educate roughly 90% of Indiana students and already face funding pressures
  • Equity and access concerns: Tax credit scholarships may primarily benefit middle-income and higher-income families with existing private school options, potentially widening educational access gaps for lower-income students
  • Accountability and oversight: Private schools receiving scholarship funds typically face fewer regulatory requirements and transparency standards than public schools regarding curriculum, special education services, and teacher qualifications
  • Cost and revenue loss: The program's fiscal impact on the state budget depends on participation rates and credit amounts, which could be substantial if widely utilized

Compiled from official sources — confirm details with the bill’s official record.

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