Louisiana’s Journey to a Tax Credit Program

by Kelli Bottger

Despite 16 states having tax credit scholarship programs, Louisiana thought it knew best when the legislature passed a Tuition Donation Rebate Program (TDR) instead of a tax credit program to expand school choice. In all fairness, the TDR program was passed in 2012 after losing the proposed tax credit bill on the House Floor by one vote during the 2011 Regular Session. Since Louisiana can only pass budget bills during odd year sessions, the 2011 bill was changed to a rebate program and passed easily through both chambers in 2012.

Unfortunately, the TDR program did not take off as expected. What was perceived as burdensome reporting requirements by donors, hindered participation and the program expanded to only 1,692 students after five years of implementation. Luckily, the perfect storm occurred during the 2017 Regular Session which allowed the TDR program to be converted to a tax credit program.

In short, it all started when the chairman of the Senate Education Committee carried a bill drafted by the Louisiana Federation for Teachers which was designed to gut the existing TDR program.  Yes, the teacher’s union!

Fortunately, the union lobbied the wrong committee and the Senator carrying the bill quickly realized how harmful it would be to the program. He pulled the bill from its scheduled hearing date and partnered with the bill’s original author, Representative Kirk Talbot, and the Louisiana Federation for Children (LFC). Together, we compromised and drafted a great piece of legislation that addressed the Senator’s concerns while expanding school choice in Louisiana.

Still, there is another twist to this great story. A major ally of school choice and LFC did not see the merits of the bill during the session and vehemently opposed the bill. As a result of this opposition, the teacher’s unions worked closely with LFC to make sure the TDR program was changed to address their concerns and then helped pass it through the legislature. Fortunately, Governor John Bel Edwards signed the bill into law.

Six years after the initial attempt to create a tax credit program, Louisiana’s tax credit program will provide families with greater access to high-quality private schools. The new program will also provide incentives for businesses and individuals to get involved in education reform.

Program Highlights:

The Louisiana Tax Credit Program is a nonrefundable tax credit for taxpayer donations that provide scholarships to students for attendance at a qualified nonpublic school of their parent’s choice. Non-profit School Tuition Organizations receive these donations and award the student scholarships on a first-come, first-served basis.

Students must have a household income that does not exceed 250% of federal poverty guidelines and meet any of the following requirements:

  • Entering kindergarten for the first time.
  • Attended a Louisiana public school during the previous school year.
  • Received a Louisiana Scholarship Program award in the previous year.