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Oklahoma to shoulder nearly $4 million price tag for Parental Choice Tax Credit

Oklahoma Gov. Kevin Stitt delivers a press conference surrounded by House and Senate leaders. The administration unveiled an education funding package worth $785 million and includes a Parental Choice Tax Credit program.
Beth Wallis
/
StateImpact Oklahoma
Oklahoma Gov. Kevin Stitt delivers a press conference surrounded by House and Senate leaders. The administration unveiled an education funding package worth $785 million and includes a Parental Choice Tax Credit program.

The state’s new Parental Choice Tax Credit program is turning out to have a much heftier price tag than expected.

When the Parental Choice Tax Credit program was passed this spring, the tax commission estimated it would cost $1 million this fiscal year to set it up.

As it turns out, it’s going to cost nearly four times that. The commission chose third-party vendor Merit for $3.95 million.

Based on income levels, the program credits families with $5,000-$7,500 per student to cover private school expenses and up to $1,000 for homeschool expenses. The legislature capped the amount available for the credits at $150 million for FY 2024, $200 million for FY 2025 and $250 million for FY 2026.

So, what are Oklahomans getting for their money? According to the agency, Merit will:

  • Train OTC personnel on its software
  • Provide an application process for the credit using its platform
  • Assist in verifying schools’ accreditation statuses
  • Assist OTC in “seamlessly” integrating its software with the agency’s tax software system
  • Set up a contact center for taxpayers and schools to ask questions
  • Develop and distribute marketing and education materials to taxpayers and schools

Because the Legislature only allotted $1 million to the OTC originally, the agency says the remaining $2.95 million is coming from its own funds. An OTC spokesperson said in an email it’s yet to be determined if the agency will be reimbursed.
The OTC says it picked Merit because the company manages similar programs in Ohio and Kansas.

The agency said school registration began Tuesday, and the taxpayer application window opens at 8 a.m. Dec. 1. Families with household incomes of $150,000 or less should receive priority consideration if they submit their applications before Feb. 1, 2024.

After processing applications submitted in time from families with household incomes of $150,000 or less, the OTC will process remaining applications in the order it received them until it reaches the annual cap.

The OTC approved emergency rules to govern the program in October, with some requested changes. However, public commenters and lawmakers complained the tax year doesn’t match the school year. The OTC said that request is out of its purview and would require a legislative solution.

Beth reports on education topics for StateImpact Oklahoma.
StateImpact Oklahoma reports on education, health, environment, and the intersection of government and everyday Oklahomans. It's a reporting project and collaboration of KGOU, KOSU, KWGS and KCCU, with broadcasts heard on NPR Member stations.
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