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Bill

SB 123

TAX/TAXATION: Authorizes an income tax credit for donations to certain public schools. (1/1/26) (EN -$1,000,000 GF RV See Note)

2025 Regular Session Introduced by Wilford Carter and 9 co-sponsors

Louisiana creates income tax credit for public school donations, reducing state revenue by ~$1M annually effective Jan. 1, 2026.

Signed by the Governor. Becomes Act No. 423.
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Bill Summary · SB 123

Legislative bill overview

SB 123 creates a state income tax credit for individuals and entities who donate money to public schools in Louisiana. The credit becomes effective January 1, 2026, and is now law after being signed by the Governor. The bill is estimated to reduce state general fund revenue by approximately $1 million annually.

Why is this important

This tax incentive directly affects school funding by encouraging private charitable donations to public schools while reducing state tax collections. Schools in lower-income areas may benefit significantly if donors target them, but funding could become dependent on donor preferences rather than need-based allocation. The revenue loss also reduces general fund resources available for other state priorities.

Potential points of contention

  • Equity concerns: Donations tend to flow toward schools in wealthier areas or with higher community engagement, potentially widening disparities between well-funded and under-resourced schools
  • Revenue trade-off: The $1 million annual revenue loss must be made up through other budget cuts or reduced services unless offset by increased donations exceeding that amount
  • Tax expenditure efficiency: Credits for charitable giving benefit higher-income taxpayers more, as they're more likely to itemize donations and have sufficient tax liability to use the credit
  • Accountability: Public funds (via tax forgone) may support school projects without the same oversight as directly-appropriated state dollars

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

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