In 2011, the Legislature passed the Oklahoma Equal Opportunity Education Scholarship Act, which authorized the creation of scholarship granting organizations (SGOs) and educational improvement grant organizations (EIGOs). SGOs issue scholarships for students who meet certain requirements to attend private schools, and EIGOs issue grants to public schools. Students benefiting from tuition scholarships may receive a maximum of $8,000 or 80 percent of the statewide annual average per pupil expenditures, whichever is greater. A family of four with income up to $166,500 is eligible for a full scholarship under the program.
Under the Act, individuals and businesses can make a donation to either an SGO or EIGO and receive a tax credit of 50 percent for a one-time donation or 75 percent for a two-year donation, along with the standard charitable deduction (donations to EIGOs for school districts with enrollment of less than 2,000 students are eligible for a 100 percent tax credit). The maximum tax credit is $2,800 for an individual, $5,600 for a married couple, and $100,000 for a business. In 2021, the Legislature increased the total amount of tax credits that can be issued each year from $5 million to $50 million, with $25 million allocated for SGOs and $25 million for EIGOs.
Proponents of the tax credits argue that they expand parental school choice by helping cover the cost for low-income students to attend private schools. Opponents express concern that public tax dollars are used for religious education and that the program’s eligibility guidelines allow middle-income families to benefit. The tax credits are also faulted for allowing some upper-income taxpayers a risk-free profit on contributions they make to fund private school scholarships.